Scamell and Gasztowicz on Land Covenants 9781784515409, 9781784515430, 9781784515423

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Scamell and Gasztowicz on Land Covenants

ii

Scamell and Gasztowicz on Land Covenants Second Edition

Steven Gasztowicz QC

Bloomsbury Professional An imprint of Bloomsbury Publishing Plc Bloomsbury Professional Ltd 41–43 Boltro Road Haywards Heath RH16 1BJ UK

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978 1 78451 540 9 978 1 78451 542 3 978 1 78451 541 6

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PREFACE

The first edition of this book was published 21 years ago. I used it at the Bar from the time it came out because it seemed to me to explain the law in relation to land covenants very well. This was largely because it set out not just the prevailing law, but also the principles behind the various aspects of it and the way they had developed. Lawyers will not often find a case on exactly the same facts as that before them, but if the principles behind a decided case are understood, so is it able to be understood how the law is likely to be applied in another case, and how, indeed, the law may be expected to develop. As a result of the approach taken, the book has continued to be referred to in recent judgments of the higher courts notwithstanding the length of time that has elapsed since the last edition. Everyone involved with this area of law owes a great debt of gratitude to Professor Scamell, not least myself. I have, however, been surprised at how many developments there have been during the past 21 years in an area of law that was developed in a great deal of detail in case law over the previous 148 years since Tulk v Moxhay in 1848. In this edition, I have aimed to maintain a principled approach, but have also sought to keep an eye on the practicalities which the courts also invariably want to take into account. I have done so in particular in considering what the answer in future cases to questions currently left unanswered might be decided to be. As well as general updating, I have also tried to make the text as understandable and modern in style for the present day as possible, and added coverage of new topics of relevance. I have endeavoured to state the law as at 1 August 2017, though I have included reference to cases decided after that time where possible. I feel I ought to end this preface by answering the question of why I (born here of an English mother, and being entirely British in outlook) have never changed, or at least anglicised, my name, to save myself and everyone else a great deal of trouble in terms of pronunciation and spelling. The answer is that if my father could survive a World War II labour camp in his early teens, escape to Switzerland, be given six months to live, and make his way to England, where he had to learn the language by ‘reading’ the newspapers, experiencing unspeakable horrors along the way, it has always seemed to me a relatively small burden by which to honour him, and my mother, who took on that name as well as all his problems. With apologies to any who have to attempt it, the pronunciation of my name which serves for me, though I know it is not the entirely correct Polish one, is ‘Gastovitch’. I hope the second edition achieves its aims. Steven Gasztowicz QC Cornerstone Barristers 2–3, Gray’s Inn Square London January 2018 v

vi

CONTENTS

Prefacev Table of Statutes xxi Table of Statutory Instruments xxxi Table of Cases xxxiii Introduction: Covenants generally The doctrine of privity Modifications of the doctrine of privity I: Benefit II: Burden Covenants relating to land

1 1 1 1 2 3

Part I  Restrictive covenants

7

1. Meaning of ‘restrictive covenant’ (including general consideration of requirements for transmissibility) The quality of transmissibility The development of the rules relating to transmissibility 1 The extension of Spencer’s Case theory 2 The conscience theory 3 Analogy to negative easements theory The current rules in relation to transmissibility 1 The covenant must be negative in substance 2 The covenant must be restrictive of the user of land 3 The covenant must have been entered into for the benefit of land ‘belonging’ to the covenantee 4 The covenant must in fact benefit land in which the claimant has a sufficient interest at the time of enforcement of it 5 The words of covenant must be such as to show that the covenant was not intended to be personal to the original covenantee or to be confined to a category of persons to whom the claimant does not belong 6 The covenant must have been entered into by a competent covenantor having a sufficient interest in the burdened (subjected) land

9 9 10 10 11 11 12 13 16 19 41

43 45

2. The benefit of the restrictive covenant Categories of potential beneficiaries

51 51

3. 1: Original covenantees The identification of original covenantees 1 Parties to the instrument containing the covenant 2 Original covenantees by virtue of s 5 of the Real Property Act 1845 or s 56 of the Law of Property Act 1925 3 Persons who are owners of land comprised within a building scheme at the time when other land within the scheme is sold off and subjected to the scheme of covenants

53 53 53 54 57

vii

Contents

4.

5.

6.

7.

viii

Effect of the loss of the original covenantee’s rights of enforcement against successors in title of the burdened land and remedies of an original covenantee The Contracts (Rights of Third Parties) Act 1999 Remedies under the Contracts (Rights of Third Parties) Act 1999 2: Covenant beneficiaries Origin of trusts of the benefit of restrictive covenants Relationship between trusts of covenants and building schemes Who, as between the trustee and the beneficiary, should be party to the action to enforce the covenants? 3: Subsequent owners and occupiers of land benefited by the restrictive covenant as competent claimants: overview General rule Statutory exception Subsequent owners and occupiers of benefited land: (a) where there is annexation The effect of annexation The requirements for annexation Pre-1926 restrictive covenants Pre-1926 position following the decision in the Federated Homes case Post-1925 restrictive covenants The land to which annexation takes place Case 1 Case 2 Case 3 Case 4 Case 5 Negating pre-existing annexation Negating annexation effected under section 78(1) of the Law of Property Act 1925 Can annexation be effected after the creation of the covenant by the unilateral action of the person entitled to its benefit? On the footing that subsequent annexation can be effected, the means of achieving this Competent claimants: (b) express assignment Assignability of restrictive covenants Express assignability not negatived by qualified annexation The time for making an express assignment Assignment made at the time of the transfer Assignment made after the time of the transfer Formal requirements for an express assignment Common law and equitable assignments – Law of Property Act 1925, section 53(1)(a) Effect of section 62(1) of the Law of Property Act 1925 or (pre 1926) section 6 of the Conveyancing Act 1881 Effect of section 63 of the Law of Property Act 1925 Implied assignment After the first assignment, is an unbroken chain of assignments connecting the first assignee with the claimant required?

58 58 59 61 61 61 63 65 65 66 67 67 68 69 76 76 84 85 86 87 100 101 102 103 104 107 111 111 112 113 113 113 119 119 122 124 126 126

Contents Assignment by operation of law Death of person entitled to the benefit Bankruptcy of person entitled to the benefit

127 127 128

8. Competent claimants: (c) building schemes 131 Introduction131 1 The evolution of building schemes 131 Phase 1 – Deeds of mutual covenant at the forefront 131 Phase 2 – Deeds of mutual covenant as the backcloth 132 Phase 3 – Underlying intention generally as the backcloth 134 Phase 4 – The Development of an equity 136 2 The legal effects of building schemes 139 3 The facts which must be proved to establish the existence of a building scheme 143 Two essential elements of a building scheme 145 The evidence by which the requisite facts may be proved 164 4 Factors which may negative the existence of a building scheme170 1 One or more purchasers from the estate vendor unaware of vendor’s intention to create a building scheme 170 2 Retention of land by the estate vendor 171 3 Power reserved to the estate vendor to release or vary the scheme covenants 171 4 The inclusion of a covenant by the vendor with each purchaser to enforce the covenants entered into by the other purchasers 174 5 The making by the former estate owner of an express assignment to one of the purchasers of the benefit of the covenants entered into by the other purchasers 174 5 Requirements for registration of building scheme obligations under the Land Charges Acts, 1925 and 1972 and, in the case of registered land, under the Land Registration Acts 1925–2002 175 1 Unregistered land 175 2 Registered land 181 9. The running of the burden of restrictive covenants The nature of the burden of a restrictive covenant The running of the burden of restrictive covenants where the title to the land is unregistered 1 Pre-1926 restrictive covenants 2 Post-1925 restrictive covenants: the Land Charges Act 1925 and its successor, the Land Charges Act 1972 The running of the burden of restrictive covenants where the title to the burdened land is registered 1 Registered proprietor with an absolute title 2 Registered proprietor with a possessory or qualified title 3 Leasehold estates Position of squatters who gain title to land Unregistered land Registered land Covenants in leases Unregistered land Registered land Local land charges

185 185 186 186 192 200 200 209 210 210 210 210 211 211 211 211 ix

Contents 10. Restrictive covenants and public law 213 Introduction213 I:  Public bodies becoming covenantees pursuant to special statutory provisions  Public bodies as competent claimants (A) Statutes allowing enforcement by deemed ownership of benefited land Planning matters Other fields Effects of such deeming provisions (B) Statutes allowing enforcement without introducing the mechanism of deeming provisions Local Acts The covenant must be imposed and operated within the scheme of the Act under which it is imposed Burden of public law covenants registrable as local land charges Failure to register covenants as local land charges 1 Restrictive covenants which remain equitable 2 Covenants which have legal status II:  Public bodies acquiring land burdened by restrictive covenants Powers of compulsory acquisition Holding statutory powers to deal with land Effect on restrictive covenants of the compulsory acquisition of the burdened land (or its acquisition by agreement in circumstances where it could have been compulsorily acquired) 1 The continued existence of restrictive covenants 2 The extent of the permitted non-compliance Altering the statutory purposes for which land was acquired Extension of immunity of Local Authorities to private individuals and bodies Position of the original covenantor Position of licensees and lessees of the statutory body Housing and Planning Act 2016, sections 203 and 204 Compensation for injurious affection under section 68 of the Lands Clauses Consolidation Act 1845 or Section 10 of the Compulsory Purchase Act 1965 in respect of non-compliance with restrictive covenants 1 The right to compensation – showing injurious affection 2 The subject matter and measure of compensation Effect on the covenant of the protected non-compliance III:  Relationship between restrictive covenants and planning permission  Various restrictions on the use of land

213 213 215 215 216 219 221 223 224 224 225 225 226 227 227 227 228 228 229 236 237 237 237 238

241 241 242 247 248 248

11. The construction of restrictive covenants 251 General principles 251 Is there a covenant? 251 Implied covenants 252 Estoppel253 General approach to construction 253 x

Contents The contra proferentem rule 258 Implied terms in covenants 258 Specific areas of construction 261 1 Content and certainty of terms 261 2 The persons potentially within the scope of the benefit and burden of a covenant 263 3 The liability of the original covenantor for the acts of subsequent owners and occupiers 268 4 Whether the present owner or occupier of the burdened land is liable in respect of the acts or omissions of an earlier owner or occupier 271 5 Whether references in the body of the covenant to the covenantee or the covenantor include references to other persons who are within the scope of the benefit and burden of the covenant 277 Construction of common phrases 292 The construction of words commonly found in restrictive covenants292 12. Restrictive covenants and competition law 345 General competition law 345 The Competition Act 1998 346 What is covered? 346 Exemptions348 Effects of breach of Chapter I of the Act 350 The Groceries Market Investigation (Controlled Land) Order 2010 351 To whom the Order relates 351 Release of specified existing restrictive covenants 351 Prohibition on entering into restrictive covenants 352 Prohibition on enforcement of ‘exclusivity arrangements’ 353 Prohibition on entering into ‘exclusivity arrangements’ 353 What constitutes a ‘restrictive covenant’ under the Order and what constitutes an ‘exclusivity arrangement’ 353 13. Remedies for breach of a restrictive covenant 355 Introduction355 Special remedies dependent upon terms agreed between the parties to the covenant 355 Right of entry 355 Right of re-entry 356 Arbitration357 General remedies 357 (1) A declaration that the claimant is entitled to enforce the covenant 357 Jurisdiction of the court to grant a declaration 357 Special statutory jurisdiction in relation to restrictive covenants359 Interim declarations 360 Declaration in addition to injunction 360 (2)  A final injunction to restrain or to remedy a breach of the covenant362 I: Claimant with the right to enforce the covenant at law 363 II: Claimant claiming to enforce the covenant in equity 370 xi

Contents (3) An interim (‘interlocutory’) injunction in relation to a legal or equitable right 373 (1) General considerations relating to an interim prohibitory injunction 373 (2) The principles in relation to the grant of an interim injunction375 (3) Added caution in relation to interim mandatory injunctions378 Enforcement differences between a prohibitory and a mandatory injunction 379 (4) Damages in addition to or in lieu of (ie in substitution for) an injunction 380 The jurisdiction to award such damages 380 The court’s discretion 381 The measure of damages under Lord Cairns’ Act in the context of restrictive covenants 390 Defences to remedies generally or alternatively to the equitable remedy of an injunction (or potentially a declaration) 394 Limitation395 Laches (or ‘acquiescence’) 396 Estoppel406 General inequitable conduct 407 Changes in the character of the neighbourhood per se 410 Stay of proceedings under section 84(9) of the Law of Property Act 1925 412 Extent of the subsection 412 The position where section 84(9) does not apply 414 Grounds for granting leave and ordering a stay under section 84(9) 414 (5) Damages at common law 416 14. Freeing the title from unenforceable restrictive covenants 419 Introduction419 Insurance against enforcement 419 Proceedings for a declaration under section 84(2) of the Law of Property Act 1925 420 The court’s powers 420 Scope of section 84(2) 421 Procedure422 The court’s discretion 428 Consequential relief where the covenant is registered or protected 428 Costs430 15. Extinguishment, discharge and modification of restrictive covenants433 The covenant ceasing to be enforceable at law or in equity 433 Clearing the title of unenforceable restrictive covenants 434 Express release 435 The person or persons having power to release 435 Form of release 436 Covenants registered as land charges under the Land Charges Act 1972 or protected on the charges register of a registered title 437 xii

Contents Extinguishment by operation of law 437 Extinguishment by unity of seisin 438 Other Interests 443 Extinguishment by intervening illegality 443 Extinguishment by intervening impossibility 444 Extinguishment by statute 444 Variation by order of the county court under section 610 of the Housing Act 1985 445 The power 445 Matters to be taken into account 445 Compensation446 Differences in use between the section and the Upper Tribunal’s general power in s 84(1) of the Law of Property Act 1925 447 16. The modification and discharge of restrictive covenants and agreements by the Upper Tribunal (Lands Chamber) pursuant to section 84(1) of the Law of Property Act 1925 449 Introduction449 The provisions of section 84(1)–(1C) 450 Contracting out not possible 451 Who may apply 451 Who may oppose 453 What restrictions fall within the scope of the upper Tribunal’s jurisdiction?453 ‘Freehold land’ 453 Restrictions affecting leasehold land 454 Restrictions affecting incorporeal hereditaments 457 ‘Affected’459 ‘Any restriction arising under covenant or otherwise … as to … user … or building’ 462 Identification of the restriction 471 The Upper Tribunal’s powers 472 The Upper Tribunal’s powers are additional to any concurrent powers exercisable by the courts 472 The discretionary nature of the Upper Tribunal’s power 474 The exercise of the discretion 475 The further or ancillary discretion 510 17. The scope of the Upper Tribunal’s powers under section 84(1) of the Law of Property Act 1925 The Upper Tribunal’s powers (i) ‘Wholly … to discharge … any such restriction’ (ii) ‘Partially to discharge … any such restriction’ (iii) ‘Wholly … to … modify … any such restriction’ (iv) ‘Partially to … modify any such restriction’

517 517 517 518 521 521

18. The four alternative grounds giving rise to the Upper Tribunal’s powers529 The grounds 529 Related matters 530 19. The grounds giving rise to the Upper Tribunal’s powers: paragraph (a) Paragraph (a)

531 531 xiii

Contents ‘By reason of changes in the character of the property’ 531 ‘By reason of changes in the character of … the neighbourhood’ 533 Meaning of ‘neighbourhood’ 534 Meaning of ‘obsolete’ 539 ‘By reason of … other circumstances of the case which the upper tribunal may deem material’ 548 The scope of ‘other circumstances’ 548 ‘Other circumstances’ deemed by the Tribunal to have been material549 ‘Other circumstances’ which appear not to be material 554 20. Section 84(1) of the Law of Property Act 1925: paragraph (aa) 559 Introduction559 Question 1: Is the proposed user reasonable (for public or private purposes)?561 Reasonable user 561 ‘For public or private purposes’ 563 Question 2: Would the continued existence [of the restriction] impede the proposed user? 563 Question 3: Does impeding the proposed user not secure practical benefits to the persons entitled to the benefit of it? 564 (1) Who (for the purposes of the provision) are the ‘persons entitled to the benefit of the restriction? 565 (2) In impeding the proposed user, does the restriction not secure ‘practical benefits’ to those persons? 566 Question 4: If the restriction does secure practical benefits to the persons entitled to enforce it, are those practical benefits ‘of substantial value or advantage to them’? 581 ‘Substantial value’ 581 ‘Substantial advantage’ 584 Temporary effects 585 Question 5: Is impeding that user … (b) contrary to the public interest?587 Question 6 (under subsection (1A): If the answer to question 4 is negative (ie the practical benefits to the objector are not of substantial value or advantage) or the answer to question 7 is affirmative (ie the restriction is impeding the proposed user contrary to the public interest), would money be an adequate compensation?596 (1) Whether the amount of money which the Tribunal has power to award as compensation will be adequate compensation596 (2) The question of whether money per se would not be an adequate substitute for the loss or disadvantage which would be suffered from the discharge or modification 606 21. Section 84(1) of the Law of Property Act 1925: paragraph (b) 1 ‘Persons of full age and capacity … entitled to the benefit of the restriction’ 2 ‘Whether in respect of estates in fee simple or any lesser estates or interests’ 3 ‘The property to which the benefit of the restriction is annexed’ xiv

609 609 610 610

Contents 4 ‘Have agreed, either expressly or by implication, by their acts or omissions, to the same being discharged or modified’ ‘[H]ave agreed … by implication’ 5 Can reliance be placed partly on paragraph (b) and partly on paragraph (aa) or (c)? When should paragraph (b) be relied upon? Paragraph (b) and the Tribunal’s discretion

611 612 614 615 616

22. Section 84(1) of the Law of Property Act 1925: paragraph (c) Overlap between paragraph (c) and other paragraphs Main differences between paragraph (c) and paragraph (aa) The constituent elements of paragraph (c) ‘The proposed discharge or modification’ ‘Will not injure’

617 617 618 619 619 620

23. The power of the Upper Tribunal to award compensation The Tribunal’s power The persons in whose favour compensation may be awarded The statutory yardstick for assessing compensation The two alternative heads of compensation Head (i): a ‘sum … to make up for any loss or disadvantage suffered by that person in consequence of the discharge or modification’ Head (ii): ‘such sum by way of consideration as the Tribunal may think it just to award … to make up for any effect which the restriction had, at the time when it was imposed, in reducing the consideration then received for the land affected by it’ Orders where compensation is payable

629 629 629 630 631 632

646 650

24. Procedure on an application to the Upper Tribunal under section 84(1) of the Law of Property Act 1925 651 Rules and practice directions 651 Overriding objective 651 Delivery and service of documents 652 Competent applicants under section 84(1) 653 The three primary documents involved in proceedings under section 84(1) 653 (i) The application and the documents required to accompany it 654 (ii) Notices giving notice of the application to persons appearing to be entitled to the benefit of the restriction 655 (iii) Objection to an application 656 Position if there is no response to the notices 658 Admission of objectors 660 Representatives663 Statements of case 663 Staying the proceedings for alternative dispute resolution 664 Determination of a preliminary issue 664 Case management 666 The standard procedure 666 The simplified procedure 666 The special procedure 667

xv

Contents Written representation procedure 667 Case management powers 668 Procedural applications 669 Failure to comply with directions 670 I: All parties 670 II: Applicant 670 III: Objector 671 Expert evidence 672 Duties of an expert 672 Form and content of expert reports 673 Computer-based valuations 673 Questions to other party’s expert 674 Discussions between experts 674 Reliance on expert evidence of one party by another party 674 Single joint expert 674 Evidence and submissions 676 Withdrawal and consent orders 677 Hearings677 Constitution of the Tribunal 677 Place of hearing 678 Public hearing 678 Adjournments678 Failure to attend 678 Procedure679 Decisions680 Setting aside decisions 681 Appeals and reviews 682 Right of appeal 682 Permission to appeal required 684 Reviews685 Decision on review/application for permission to appeal 686 Supreme Court 686 Costs687 Powers of the Tribunal 687 Exercise of the Tribunal’s discretion as to costs 687 Post-hearing action 693 Unregistered land 693 Registered land 693 Part II Positive covenants and negative covenants which are not restrictive covenants

695

25. Meaning of ‘positive covenants’ and of ‘negative covenants which are not restrictive covenants’ and frequency of use 697 Introduction697 Meaning of ‘positive covenant’ 697 Meaning of ‘negative covenants which are not restrictive covenants’698 Common rules of transmissibility of all such covenants 699 Frequency of use 700 26. Persons able to claim the benefit of positive covenants: (I) Original covenantees 701 Introduction701 xvi

Contents The three categories of original covenantee 1 Original covenantee by being named as a party 2 Original covenantee by virtue of section 5 of the Real Property Act 1845 or section 56(1) of the Law of Property Act 1925 3 Original covenantee under a building scheme 27. Persons able to claim the benefit of positive covenants: (II) Subsequent owners and occupiers of the benefited land Introduction to the common law rules Common law rules for the running of the benefit of a covenant Rule 1: Performance of the covenant must have a distinct connection with (ie ‘touch and concern’) the land Rule 2: The covenant must relate to clearly identifiable land Rule 3: The covenant must have been entered into with the owner of the legal estate in the land which is to be benefited Rule 4: The person seeking to enforce the covenant must have a legal estate in the land (and pre-1926, must have the same legal estate as the original covenantee) Rule 5: The covenant must show an intention that its benefit shall run with the land The effect of all five rules being satisfied Modification of the common law rules by equity and statute Greater stringency of equity in one respect The contracts (Rights of Third Parties) Act 1999 Transmission of benefit only Special cases

701 701 702 703 705 705 706 706 708 709 710 712 713 714 717 717 718 718

28. The burden of positive covenants 719 Introduction719 Background to the rule laid down in Austerberry v Oldham Corpn 720 The decision in Austerberry v Oldham Corpn 721 The resulting rule of law and equity 722 Section 79 of the Law of Property Act 1925 722 Statement of the general rule which applies to the burden of a positive covenant 723 Land Registration 723 Statutory exceptions where the burden of a positive covenant runs with the land 724 1 Section 35 of the Highways Act 1980 – ‘walkway’ agreements724 2 Section 33 of the Local Government (Miscellaneous Provisions) Act 1982 724 3 Section 39 of the Wildlife and Countryside Act 1981 – management agreements 725 4 Section 75 of the Mission and Pastoral Measure 2011 725 5 Sections 155 and 156 of the Housing Act 1985 (as amended) 726 6 Section 106 of the Town and Country Planning Act 1990 727 7 Section 19 of the Leasehold Reform Act 1967 727 8 Local and private Acts 728 Local Land Charges 728 xvii

Contents 29. Methods of securing the indirect running of the burden of a positive covenant 731 Introduction731 (1) Right of re-entry 732 Right of re-entry at common law 732 Effect of the 1925 property legislation on right of re-entry and the land affected: legal and equitable rights of re-entry 733 Enforceability of a right of re-entry against successors etc 735 Procedure when an event occurs giving rise to the exercise of the right of re-entry 736 Exercising the right of re-entry 737 The effect of re-entry 738 Relief from forfeiture I 739 Relief from forfeiture II 741 Relief from forfeiture III 743 Third party may now take a right of re-entry 745 Application of the perpetuity rule 745 Application of the Limitation Act 1980 to rights of re-entry and rentcharges 747 Practical use of the right of re-entry in connection with positive covenants 749 Monetary obligations – capital sum – right of re-entry or charge? 752 (2) Right of entry 754 Nature of a right of entry 754 Rights of entry and the perpetuity rule 755 The running of the burden of a right of entry 755 The running of the benefit of a right of entry 756 Practical use of the right of entry 757 (3) Use of the rentcharge 757 Estate rentcharges not subject to statutory extinguishment or redemption 758 (4) Conditions attached to property rights 759 The principle stated 759 Examples759 The operation and limits of the principle 759 The running of the burden of a condition 763 The running of the benefit of a condition 765 (5) Lease of easements containing covenants 765 Elements of the scheme 765 Operation of the scheme 766 (6) Fresh covenants on every change of ownership 766 (1) Unregistered land 767 (2) Registered land 768 (7) Long lease followed by enlargement 769 The rule in Spencer’s case 769 Section 153 of the Law of Property Act 1925 769 Effect of section 153(8) on the former lease covenants 770 The practical application of enlargement 771 Land registration 772 (8) Chain of indemnity covenants 772 xviii

Contents (9) The exceptional case of fencing covenants as easements Covenants exhibiting the characteristics of easements The ‘easement’ of fencing Scope of the easement of fencing The words of grant of an easement of fencing

774 774 774 776 776

30. Remedies for breach of positive covenants 779 Introduction779 Specific performance 779 Jurisdiction779 Cases of urgency 782 Enforcement of the order 783 Damages in addition to or in substitution for specific performance 783 The statutory jurisdiction 783 Damages in addition to specific performance 784 Damages in substitution for specific performance 784 The measure of damages under the Act 785 Injunction787 Injunction as an ancillary remedy 787 Mandatory injunction as a primary remedy 787 Common law damages 788 The breach complained of 789 The measure of damages 789 The date for ascertaining the loss 790 Method of assessing the loss 790 Appointment of a receiver 792 The jurisdiction 792 31. Covenants and commonhold 793 Introduction793 The advantages of commonhold 793 The nature of commonhold 793 Enforceability of obligations 794 Winding-up of the commonhold association 795 Voluntary winding up 795 Winding up by the court 796 Frequency of commonhold 796 Part III  Planning obligations relating to land

797

32. Planning obligations 799 The nature of planning obligations 799 History800 Previous planning agreements 801 Current section 106: planning obligations 801 What planning obligations can cover, differences from conditions imposed on the grant of planning permission, and the use and value of them 803 Planning conditions 803 Planning obligations 805 Use and value of planning obligations 806 Requirements of section 106 808 ‘A person interested in the land’ 808 ‘Restricting the development or use of the land in any specified way’ 809 xix

Contents Mandatory requirements of section 106(9) 811 Planning obligations requiring the transfer of land 811 Severability of terms 814 Entry by local authorities as landowners into section 106 planning obligations 815 Enforceability against any person ‘deriving title’ from the person entering into the planning obligation 816 Registration requirements 818 Interaction between section 106 planning obligations and the law of contract 818 Interaction between section 106 planning obligations and existing restrictive covenants 819 Enforcement of planning obligations 819 I: By the identified local planning authority only 819 II: Remedies available to the local planning authority under section 106 819 Modification and discharge of planning obligations 820 Powers of local planning authority on an application to modify or discharge 821 Making an application for discharge or modification 822 Time for determination of the application by the relevant planning authority 823 Appeals823 Interpretation of planning obligations 824 Local Acts824 Part IV  Reform

827

33. Reform of the law relating to restrictive covenants: Law Commission proposals Background to the latest proposals The 1960s The 1970s The 1980s The 2000s The Law Commission’s latest Report Problems intended to be tackled The Law Commission’s conclusions Prospects for reform

829 829 829 829 830 830 831 831 832 844

Appendices845 Appendix 1 Section 84 of the Law of Property Act 1925

847

Appendix 2 Practice Statement

853

Appendix 3 Practice Statement

855

Appendix 4 Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010

857

Appendix 5 Practice Directions

887

Appendix 6 Upper Tribunal (Lands Chamber) Forms T379–T382

901

Appendix 7 Sections 106–106C of the Town and Country Planning Act 1990

919

Index

931

xx

Table of Statutes

Acquisition of Land Act 1981ss s 7����������������������������������������������������    10.72 Acquisition of Land (Assessment of Compensation) Act 1919�����   16.1, 16.120 Administration of Estates Act 1925�������������������������������������   1.51; 33.11 s 39(1)���������������������������������������������    15.11 s 39(1)(ii), (iii)��������������������������������   1.63 Agricultural Holdings Act 1948 s 24(1)���������������������������������������������   16.4 Agriculture Act 1947���������������������������   11.120 Air Force (Constitution) Act 1917������    10.58 Air Navigation Act 1920���������������������    16.47 Allotments Act 1950 s 12�����������������������������������������   15.30; 19.69 Ancient Monuments and Archaeological Areas Act 1979 s 17(7)(a)�����������������������������������������    16.47 Arbitration Act 1996 s 9����������������������������������������������������   13.7 Artisans’ and Labourers’ Dwellings Improvement Act 1875 s 9����������������������������������������������������   10.6 Bankruptcy Act 1914 s 38, 53��������������������������������������������   7.45 Celluloid and Cinematograph Film Act 1922 s 8���������������������������������������������   16.1, 16.52 Chancery Amendment Act 1858����������������������������������   13.31, 13.52, 13.74, 13.75, 13.78, 13.79, 13.86, 13.87,13.100, 13.101, 13.102; 30.15 s 2��������������������   13.74, 13.76, 13.77, 13.83, 13.101; 30.14, 30.23 Civil Aviation Act 1949 s 19, 23��������������������������������������������    16.47 Civil Aviation Act 1982 s 30, 41��������������������������������������������    16.47 Commonhold and Leasehold Reform Act 2002�����������������������   31.1, 31.3, 31.5, 31.19; 33.6, 33.7 s 3����������������������������������������������������    31.18 s 3(2)(e), (f)�������������������������������������    31.18 s 16(1)���������������������������������������������   31.8 s 16(2)���������������������������������������������   31.9 s 16(3)(a), (b)����������������������������������   31.9 s 31��������������������������������������������������   31.7 s 45(2)���������������������������������������������    31.15 s 47(1)���������������������������������������������    31.14 s 47(2)���������������������������������������������    31.13 s 51��������������������������������������������������    31.17

Common Law Procedure Act 1852 s 210������������������������������������������������    29.25 Communications Act 2003 s 106(3)(a)���������������������������������������    10.73 Companies Act 1985 s 35��������������������������������������������������   1.64 s 35(4)���������������������������������������������   1.64 Companies Act 1989 s 108(1)�������������������������������������������   1.64 Companies Act 2006 s 39(1)���������������������������������������������   1.64 s 42��������������������������������������������������   1.64 Competition Act 1998������������������   12.4, 12.17 Pt I Ch I (ss 1–24)���������������������   12.4, 12.5, 12.6, 12.14 s 2(4)�����������������������������������������������   12.5 s 9(1)����������������������������������������   12.6, 12.10 s 49��������������������������������������������������    12.15 Sch 3 para 1���������������������������������������������    12.4 Compulsory Purchase Act 1965����������������������������������   10.32, 10.35, 10.36, 10.76, 10.78 s 7����������������������������������������������������    10.74 s 10������������������   10.42, 10.44, 10.47, 10.48, 10.63, 10.74, 10.75, 10.77, 10.82 s 10(1)���������������������������������������������    10.38 s 10(2)������������������������������������   10.38, 10.39 s 39(4)���������������������������������������������    10.36 Sch 8 Pt III��������������������������������������������    10.36 Constitutional Reform Act 2005���������   24.118 Consumer Rights Act 2015�������������������   12.26 Contracts (Rights of Third Parties) Act 1999����������  Int; 3.1, 3.9, 3.12; 27.39 s 1����������������������������������������������������     5.3 s 1(3)�����������������������������������   3.10, 3.11; 5.3 s 1(5)�����������������������������������������������    32.51 s 2����������������������������������������������������    32.50 Conveyancing Act 1881���������������   9.16; 11.46 s 3(1)�����������������������������������������������   9.22 s 6�����������������������������������������������   7.29, 7.33 s 6(1)�����������������������������������������������   7.31 s 10,11���������������������������������������������   Int s 14(8)���������������������������������������������    29.15 s 44��������������������������������������������������   1.51 s 51��������������������������������������������������    11.38 s 58��������������������������  1.57; 6.24, 6.25, 6.26; 8.118; 11.41, 11.46 s 58(1)�������������������������������   7.2, 7.44; 11.42 s 58(2)���������������������������������������������   7.44 s 65��������������������������������������������������   29.101

xxi

Table of Statutes Conveyancing Act 1882����������������������   9.16 s 3����������������������������������������������������   9.16 s 3(1)�����������������������������������������������   9.22 Conveyancing Act 1911 s 11��������������������������������������������������    8.118 Conveyancing and Feudal Reform (Scotland) Act 1970 s 1���������������������������������������������   22.4; 23.39 s 1(3)(a)�������������������������������������������   19.2 s 1(4)(ii)���������������������������������   23.52, 23.53 Copyright, Designs and Patents Act 1988��������������������������������������   13.130 Countryside Act 1968 s 15(4)���������������������������������������������    16.47 County Courts Act 1984 s 15��������������������������������������������������   30.3 s 21, 22��������������������������������������������    14.17 s 23(d)��������������������������������������   30.3, 30.14 s 38��������������������������������������������������    30.14 Courts and Legal Services Act 1990��������������������������������������    14.17 Criminal Law Act 1977 s 6(1)�����������������������������������������������    29.18 Defence Act 1842�����������������������   10.57, 10.58 Fair Trading Act 1973�������������������������   Int Forestry Act 1967 s 5����������������������������������������������������    10.13 s 5(1)��������������������������������������   10.11; 16.47 s 5(2)(b)����������������������������������   10.13; 16.47 Grantees of Reversions Act 1540��������    29.98 Greater London Council (General Powers) Act 1974���������������   10.20; 28.27 s 16����������������������������������������  10.20; 28.27; 32.37, 32.92 Green Belt (London and Home Counties) Act 1938���������������������    10.95 s 22�����������������������������������������   10.21; 28.28 s 22(2)���������������������������������������������    16.47 Highways Act 1959�����������������������������    10.86 Highways Act 1980 s 35�����������������������������������������   10.17; 28.16 s 35(4)������������������������������������   10.30; 28.16 s 261(1)(a)���������������������������������������    10.86 s 263(2)�������������������������������������������    32.58 Housing Act 1925�������������������������������    16.34 s 102������������������������������������������������    16.52 Housing Act 1936 s 163���������������������������������������   15.32, 15.33 Housing Act 1949 s 11�����������������������������������������   15.32, 15.33 Housing Act 1957 s 165������������������������������������������������    15.32 Housing Act 1974 s 126������������������������������  10.16; 28.17; 32.6 Housing Act 1980�������������������������������    20.95 Housing Act 1985����������������������   10.22; 19.20 Pt V (ss 118–188)����������������������������    28.21 s 155���������������������������������������   10.11; 28.21 s 156������������������������������������������������    28.21 s 156(1)����������������������������������   10.30; 28.21 s 156(2), (2A), (2B), (3)������������������    28.21 s 157������������������������������������������������    16.38 s 159������������������������������������������������    16.39 s 609������������������������������   10.7, 10.11, 10.13

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Housing Act 1985 – contd s 610������������������   15.1, 15.31, 15.32, 15.36, 15.37, 15.38, 15.39, 15.40; 16.1, 16.12, 16.52, 16.54 s 610(1)(a)��������   15.32, 15.37, 15.40; 16.54 s 610(1)(b)������������������������������   15.32, 15.34 Housing and Planning Act 2016 s 203���������������������������   10.55, 10.56, 10.68, 10.71, 10.72, 10.73, 10.74, 10.82, 10.87 s 204���������������������������   10.55, 10.56, 10.68, 10.72, 10.74, 10.82 s 205���������������������������������������   10.72, 10.73 Sch 19 para 9�������������������������������������������    10.72 Housing, Town Planning etc Act 1919 s 27��������������������������������   15.32; 16.1, 16.54 Insolvency Act 1986 s 122, 124����������������������������������������    31.16 s 283(3)(a)���������������������������������������   7.46 s 291A(1)����������������������������������������   7.45 s 293������������������������������������������������   7.45 s 306������������������������������������������������   7.45 s 306(1)�������������������������������������������   7.45 s 383(1)�������������������������������������������   7.45 Interpretation Act 1978 s 7����������������������������������������������������   24.4 s 17(2)(a)�����������������������������������������   9.35 Judgments Act 1839 s 7����������������������������������������������������    11.69 Land Charges Act 1900 s 2����������������������������������������������������    11.69 Land Charges Act 1925����������   1.18; 8.1, 8.22, 8.104, 8.106, 8.112; 9.3, 9.4, 9.13, 9.17, 9.25, 9.35, 9.63; 10.20; 14.1; 15.5; 28.25, 28.27; 29.12, 29.48 s 2����������������������������������������������������    11.69 s 2(5)����������������������������������������   1.18; 8.108 s 6����������������������������������������������������    11.69 s 10(1)��������������������  1.18; 6.38; 9.26; 10.27 s 10(1) Class C �������������������������������   25.6 s 10(1) Class D(ii)�����������������   8.108, 8.115, 8.115, 8.116; 27.10 s 10(1) Class D(iii)�����������������   8.116, 8.117 s 10(1A)������������������������������������������    10.27 s 11(1)���������������������������������������������    10.27 s 13(2)���������������������������������������������   15.5 s 15(1)���������������������������������������������    10.27 s 17(3)���������������������������������������������   9.32 s 50��������������������������������������������������    27.10 Land Charges Act 1972�������������������  Int; 1.18; 8.1, 8.22, 8.104, 8.106, 8.112, 8.115; 9.3, 9.4, 9.13, 9.25, 9.26, 9.35, 9.38, 9.39, 9.40, 9.43, 9.47, 9.61, 9.71; 10.24; 13.6; 14.1, 14.7, 14.15, 14.31; 15.5, 15.6, 15.8, 15.14, 15.15; 24.146; 28.2; 29.12, 29.65; 32.2; 33.11 s 1(6)����������������  9.39; 14.15, 14.31; 24.146 s 2�������������������������������������������   29.12, 29.64 s 2(4)�����������������������������������������������   25.6 s 2(4)(iii)(c)�������������������������������������    29.65 s 2(5)�������������������  1.18; 6.38; 8.113, 8.116, 8.117; 9.26, 9.73; 10.25; 27.10

Table of Statutes Land Charges Act 1972 – contd s 2(5)(ii)������������������������������������������    16.36 s 3(1)�����������������������������������������������   9.38 s 3(5)�����������������������������  6.38; 8.113; 27.10 s 4(5)�����������������������������   8.113, 8.117; 9.30 s 4(6)�����������������������   9.25, 9.30, 9.35, 9.36, 9.38, 9.58; 15.5 s 5����������������������������������������������������    11.69 s 5(7)�����������������������������������������������    11.69 s 6����������������������������������������������������    11.69 s 6(4)�����������������������������������������������    11.69 s 9����������������������������������������������������   9.38 s 10���������������������������������������������   9.31, 9.38 s 10(4)�������������������������������   9.25, 9.31, 9.32 s 10(5)���������������������������������������������   9.32 s 11�������������������������������������������   8.115; 9.38 s 13(2)���������������������������������������������   9.25 s 14(1)���������������������������������������������   9.40 s 17(1)���������������������������������������������   9.36 s 17(3)���������������������������������������������   9.25 Land Charges Registration and Searches Act 1888 s 5����������������������������������������������������    11.69 Landlord and Tenant Act 1927 s 3��������������������������������   16.12, 16.52, 16.54 s 24��������������������������������������������������   1.51 Landlord and Tenant Act 1954������������   16.5 Pt II (ss 23–46)��������������������������������    12.14 Landlord and Tenant Act 1985 s 19��������������������������������������������������    33.11 Landlord and Tenant (Covenants) Act 1995������������������������������������ Int; 25.9 s 3(5)������������������������������������������   9.71, 9.72 Land Powers (Defence) Act 1958 s 13(c)����������������������������������������������    16.47 Land Registration Act 1925����������   1.18, 1.51; 7.35; 8.1, 8.22, 8.104, 8.124; 9.3, 9.27, 9.40, 9.46, 9.56, 9.57, 9.60, 9.62, 9.63, 9.65 s 5����������������������������������������������������   7.35 s 19(2)���������������������������������������������   9.64 s 19(3)���������������������������������������������   7.35 s 20��������������������������������������������������   7.35 s 20(1)���������������������������������������������   9.64 s 23��������������������������������������������������   7.35 s 30�����������������������������������������   29.57, 29.58 s 40(1)���������������������������������������������    16.36 s 40(2)���������������������������������������������   15.9 s 49(1)���������������������������������������������    11.69 s 50(1)��������������������  1.18; 6.38; 9.40; 16.36 s 50(2)�������������������������������   9.47, 9.48, 9.64 s 52���������������������������������������������   9.47, 9.48 s 82������������������������������������   9.56, 9.63, 9.64 s 84(1)���������������������������������������������   1.18 s 112������������������������������������������������   9.48 Land Registration Act 1988������������   8.1, 8.22, 8.104; 9.3, 9.40 s 1����������������������������������������������������   9.48 Land Registration Act 2002������   1.18, 1.51; 8.22, 8.104; 9.3, 9.40, 9.41, 9.45, 9.53, 9.62, 9.63, 9.65; 14.7, 14.15, 14.31; 15.6; 29.106; 32.2 s 3�����������������������������������������   9.60; 33.11 s 3(3)���������������������������������������������   29.97

Land Registration Act 2002 – contd s 4(1)�����������������������������������������������   9.60 s 4(1)(c)�������������������������������������������   9.60 s 9(2)�����������������������������������������������   9.41 s 9(3), (4)�����������������������������������������   9.67 s 9(5)�����������������������������������������������   9.66 s 10(2)���������������������������������������������   9.41 s 10(3)���������������������������������������������   9.60 s 10(4)���������������������������������������������   9.67 s 10(6)���������������������������������������������   9.66 s 11����������   6.38; 7.35; 8.123; 9.41, 9.42, 9.68 s 11(4)�������������������������������   9.42, 9.53, 9.55 s 11(4)(a)�����������������������������������������   9.66 s 11(6)���������������������������������������������   9.67 s 11(7)���������������������������������������������   9.66 s 12����������������  7.35; 8.123; 9.26, 9.42, 9.68 s 12(7)���������������������������������������������   9.67 s 12(8)���������������������������������������������   9.66 s 15������������������������������������������������   29.13 s 20������������������������������������������������   8.121 s 23������������������������������������������������   8.121 s 23(1)���������������������������������������������   9.56 s 27������������������������������������������������   33.11 s 27(2)(e)���������������������������������������   29.64 s 29��������������������   8.121, 8.124, 8.125; 9.41, 9.44, 9.46, 9.56, 9.57, 9.60, 9.70; 11.69; 29.14, 29.64 s 29(2)(b)�����������������������������������������   9.72 s 29(4)���������������������������������������������   9.60 s 30�������������������������������������������   9.46; 11.69 s 32����������������������������������  1.18; 9.47; 11.69 s 32(3)����������������������������������������   9.46, 9.56 s 33(c)��������������������������������   9.26, 9.44, 9.72 s 34(3)���������������������������������������������   9.49 s 40��������������������������������������������������    29.96 s 43(1)(a), (b)����������������������������������    29.96 s 49�����������������������������������������   29.57, 29.58 s 50(1)���������������������������������������������   9.45 s 58��������������������������������������������������    33.11 s 58(1)������������������������������������   29.97; 33.11 s 58(2)���������������������������������������������    29.97 s 59(2)���������������������������������������������    28.21 s 65��������������������������������   9.56; 14.15, 14.31 s 66��������������������������������������������������   9.48 s 70(1)(a)�����������������������������������������    8.122 s 77(1)(b)�����������������������������������������   9.45 s 77(2)���������������������������������������������   9.45 s 93��������������������������������������������������    29.96 s 96, 97��������������������������������������������   1.51 s 116������������������������������������������������   13.155 s 123, 124����������������������������������������   9.43 Sch 1������������������������������������������������   9.43 para 6�������������������������   9.73; 10.25, 10.29 Sch 3�����������������������������������������   8.122; 9.45 para 2�������������������������������������������    8.122 para 6�������������������������   9.73; 10.25, 10.29 Sch 4�����������������������   9.53, 9.56, 9.65; 33.11 para 1�������������������������������������������   9.53 para 2�������������������������������������������   9.65 para 2(1)(b)������������������������   14.15, 14.31 para 2(2)�����������������������������   14.15, 14.31 para 3��������������������������������������   9.53, 9.65 para 5�������������������������������������������   15.7 para 6�������������������������������������������   9.53

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Table of Statutes Land Registration Act 2002 – contd Sch 6������������������������������������������������   1.51 Sch 8�����������������������������������������   9.65; 33.11 Lands Clauses Consolidation Act 1845�����������������   10.31, 10.32, 10.35, 10.62, 10.76, 10.78, 10.86 s 68������������������   10.36, 10.37, 10.38, 10.42, 10.43, 10.44, 10.45, 10.47, 10.52, 10.62, 10.75, 10.856; 11.143 s 127–130����������������������������������������    10.61 Lands Tribunal Act 1949���������������������   16.1 Land Transfer Act 1897�����������������   7.43, 7.44 Law of Property Act 1925���������������  1.18; 9.4; 16.11, 16.19, 16.71 Pt I (ss 1–39)�����������������������������������   9.36 s 1(1)�����������������������������������������������   1.51 s 1(1)(a)�������������������������������������������    16.10 s 1(1)(i)��������������������������������������������    20.86 s 1(2)�����������������������������������������������   1.51 s 1(2)(b)�������������������������������������������   29.7 s 1(2)(e)����������������������������   13.6; 29.3, 29.5, 29.38, 29.50, 29.60, 29.64, 29.66, 29.69 s 1(3)��������������������  1.51; 16.10; 29.5, 29.60 s 1(4)�����������������������������������������������   9.14 s 1(4)(ii)������������������������������������������   9.16 s 1(6)�����������������������������������������������   21.1 s 2(3)(ii)������������������������������������������   1.18 s 2(5)(a)����������������������������������������   1.18; 9.5 s 3(3)�����������������������������������������������    29.21 s 4(1)�������������������������������  9.25; 13.6; 16.10 s 4(1) proviso����������������������������������     9.2 s 4(3)�����������������   29.3, 29.35, 29.36, 29.37, 29.38, 29.53, 29.63 s 5(1)���������������������������������������������   16.10 s 7�������������������������������������������������   6.1; 29.6 s 7(1)�����������������������������������������������   29.6 s 9����������������������������������������������������    29.21 s 19��������������������������������������������������   21.1 s 28(1)��������������������  1.51, 1.63; 15.11; 21.2 s 30������������������������������������������������   14.18 s 30(1)���������������������������������������������   16.5 s 44(1)���������������������������������������������   9.33 s 44(2)����������������������������������������   9.22, 9.48 s 44(3), (4)���������������������������������������   9.22 s 44(5)������������������������������   9.22, 9.23, 9.28, 9.29, 9.30, 9.48 s 45(1) proviso (ii)��������������������������   8.85 s 52��������������������������������������������������    33.11 s 52(1)���������������������������������������������    29.51 s 53(1)���������������������������������������������   7.41 s 53(1)(a)��������������������������   7.19, 7.20, 7.25, 7.41; 15.13 s 53(1)(c)�����������������������������������������    29.66 s 53(2)����������������������������������������   7.19, 7.41 s 56���������������������������������������� Int; 3.4, 3.10, 3.11; 8.22, 8.49 s 56(1)�������������������������  3.1, 3.4, 3.10; 8.22; 26.4; 29.3, 29.35 s 60(1)������������������������������������   11.38; 16.10 s 60(2)���������������������������������������������    11.38 s 61(c)��������������������������������������������    11.203 s 62�������������������   1.8; 7.30, 7.31, 7.32, 7.33, 7.36, 7.37, 7.39; 33.11

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Law of Property Act 1925 – contd s 62(1)������������������������������   6.72; 7.29, 7.31, 7.35; 29.114 s 63��������������������������   7.33, 7.34, 7.36, 7.37, 7.38, 7.39, 7.40 s 64(3)���������������������������������������������    27.41 s 76(6)���������������������������������������������   7.44 s 77�����������������������������������������������   1.24, 6.5 s 77(5)���������������������������������������������    27.41 s 78����������������������������   1.58; 6.2, 6.26, 6.27, 6.37, 6.42, 6.43, 6.44, 6.81, 6.105; 11.49, 11.91, 11.107; 27.19, 27.22, 27.23, 27.37; 28.11 s 78(1)���������������������������������������   1.18, 1.44, 1.47, 1.51, 1.60; 6.27, 6.28, 6.32, 6.33, 6.41, 6.42, 6.44, 6.45, 6.46, 6.58 6.61, 6.64, 6.65, 6.66, 6.68, 6.73, 6.74, 6.78, 6.90, 6.93, 6.97; 7.2, 7.5; 11.43, 11.50, 11.90; 13.21, 13.30; 14.1; 15.4, 15.20; 26.7; 27.29, 27.32, 27.34, 27.38; 28.9; 29.50 s 78(2)���������������������������������������������   6.24 s 79�������������������������������������������������   6.42, 6.44, 6.79; 10.11; 11.48, 11.51, 11.52, 11.59, 11.107; 28.9, 28.11, 28.12 s 79(1)�����������������   1.18; 28.9, 28.10, 28.11, 28.12; 29.98 s 79(2), (3)�������������������������������������   28.10 s 80��������������������������������������������������   6.84 s 80(2)�����������������������������   Int; 9.6; 27.14 s 80(3)��������������������   Int; 1.59; 9.6; 27.14 s 80(4)�����������   Int; 1.59; 6.84; 9.6; 27.14 s 82��������������������������������������������������   8.17 s 82(1)�������������������������������������������   16.42 s 82(9)�����������������������������������������   13.177 s 84������������������  1.29; 10.11, 10.13; 13.135; 15.38; 16.4, 16.48, 16.53, 16.61, 16.84, 16.112, 16.116; 19.2, 19.66, 19.67; 20.21, 20.95, 20.96; 23.39, 23.40; 24.3, 24.6, 24.9, 24.148; 28.19; 32.75; 33.9, 33.11 s 84(1)�����������������������   1.8, 1.13, 1.29, 1.31, 1.44; 6.40; 8.22; 9.39; 10.13; 13.12, 13.180; 14.9, 14.33; 15.1, 15.12, 15.37, 15.38, 15.39, 15.40, 15.41; 16.1, 16.2, 16.4, 16.5, 16.9, 16.11, 16.22, 16.23, 16.26, 16.29, 16.30, 16.33, 16.36, 16.39, 16.43, 16.45, 16.46, 16.47, 16.48, 16.50, 16.53, 16.54, 16.55, 16.58, 16.63, 16.69, 16.70, 16.73, 16.103, 16.106, 16.113, 16.117, 16.120, 16.124; 17.1, 17.9,17.17, 17.18, 17.28, 17.29, 17.30, 17.31; 18.1, 18.2, 18.3; 19.2, 19.3, 19.62, 19.64; 20.1, 20.16, 20.19, 20.73, 2, 23.90.80, 20.88, 20.93; 21.11; 22.1, 22.4, 22.8, 22.9, 22.13; 23.1, 23.2, 23.3, 23.5, 23.8, 23.42, 23.43, 23.45, 23.46, 23.50, 23.52; 24.6, 24.8, 24.9, 24.23, 24.28, 24.41, 24.48, 24.52, 24.56, 24.70, 24.88, 24.89, 24.107, 24.108, 24.120, 24.128, 24.130; 25.5; 28.19; 32.2

Table of Statutes Law of Property Act 1925 – contd s 84(1)(a)���������������������������������   8.99, 8.126; 13.170, 13.171; 15.27, 15.37, 15.40; 16.48, 16.50, 16.54, 16.55, 16.58, 16.92, 16.106, 16.114, 16.124; 19.1, 19.2, 19.9, 19.62,19.64, 19.67, 19.70; 20.22, 20.23, 20.67, 20.69; 22.1; 23.8, 23.40, 23.47, 23.52 s 84(1)(aa)�������  11.67; 15.27; 16.50, 16.55, 16.58, 16.106, 16.124, 16.125; 19.2, 19.64; 20.4, 20.5, 20.13, 20.14, 20.96; 21.17; 22.2, 22.3, 22.4, 22.13, 22.14, 22.16; 23.8, 23.23, 23.26, 23.28, 23.40, 23.52; 24.28, 24.30, 24.81 s 84(1)(b)��������������������   15.13; 16.48, 16.50, 16.55, 16.58, 16.122; 18.4, 18.5; 19.2, 19.64; 21.9, 21.10, 21.11, 21.15, 21.16, 21.17, 21.20, 21.21, 21.22, 21.23; 23.8, 23.52 s 84(1)(c)��������������������������   1.30, 1.31; 8.99, 8.126; 11.67; 16.50, 16.55, 16.58, 16.64, 16.106; 17.31; 18.4; 19.2, 19.64; 20.96; 21.17; 22.1, 22.2, 22.3, 22.4, 22.5, 22.13, 22.14, 22.15, 22.16, 22.17; 23.8, 23.47, 23.52, 23.53; 24.30, 24.138; 33.11 s 84(1)(i)���������������������   20.78, 20.85, 20.88; 23.5, 23.8, 23.44, 23.50, 23.51, 23.52 s 84(1)(ii)���������������������   16.95, 20.78; 23.5, 23.8, 23.9, 23.44, 23.51, 23.52, 23.54, 23.55 s 84(1A)�����������������������   16.1, 16.3, 16.129; 18.1, 18.2, 18.3; 20.2, 20.4, 20.7, 20.8, 20.19, 20.38, 20.71, 20.76, 20.77, 20.80, 20.86; 22.3; 23.33, 23.41, 23.52 s 84(1A)(a)�����������������   16.132; 20.4, 20.13, 20.18, 20.35, 20.54, 20.56, 20.77; 23.19 s 84(1A)(b)��������������������������   16.78, 16.132; 20.4, 20.14, 20.54, 20.77, 20.89; 23.19 s 84(1B)�������������������������������������   16.1, 16.3, 16.58, 16.63, 16.65, 16.68, 16.72, 16.90, 16.120; 20.2, 20.8, 20.14, 20.24, 20.56, 20.61 s 84(1C)��������������������������   16.1, 16.3, 16.58, 16.136, 16.137, 16.138; 17.3, 17.12, 17.13, 17.15, 17.19, 17.20; 19.43; 23.11; 33.11 s 84(2)�������������������������  1.53; 2.1; 3.4; 6.47; 8.23, 8.97; 9.39; 10.11; 11.130; 13.15; 14.4, 14.8, 14.9, 14.12, 14.13, 14.15, 14.17, 14.20, 14.21, 14.27, 14.28, 14.32, 14.33; 15.6, 15.13, 15.20; 16.4, 16.5, 16.11, 16.16, 16.17, 16.19, 16.26, 16.48; 21.12; 24.33, 24.34, 24.35, 24.36, 24.37; 28.19 s 84(2)(a), (b)����������������������������������    24.33

Law of Property Act 1925 – contd s 84(3)�������������������������������������������   16.69 s 84(3A)�����������������������  13.12; 16.8, 16.26; 24.33, 24.34, 24.48, 24.107 s 84(4)���������������������������������������������    16.91 s 84(5)��������������������������   14.7, 14.31, 14.33; 16.138; 20.3; 24.18 s 84(6)���������������������������������������������    16.49 s 84(7)����������������������������   14.9; 16.5, 16.46, 16.47, 16.86; 24.48 s 84(8)���������������������������������������������   14.31 s 84(9)�������������������������������   13.172, 13.175, 13.177, 13.178; 16.29 s 84(10)����������������������������������   16.1, 16.120 s 84(11)������������������������������������   14.9; 16.47 s 84(11)(a), (b)��������������������������������    16.47 s 84(11A)����������������������������������������    16.47 s 84(12)��������������������������  14.8; 15.39; 16.5, 16.12, 16.14, 16.15, 16.16, 16.17, 16.18, 16.63, 16.91, 16.133, 16.134 s 85��������������������������������������������������    16.10 s 87(1)���������������������������������������������   1.51 s 88��������������������������������������������������    16.10 s 89(9)���������������������������������������������   13.177 s 94��������������������������������������������������    29.57 s 94(1)���������������������������������������������    29.65 s 94(1)(c)�����������������������������������������    29.58 s 117(1)�������������������������������������������    16.10 s 121�����������������������������������������   1.51; 29.37 s 121(2)�������������������������������������������    29.59 s 121(3)�������������������������������������������   29.3 s 122������������������������������������������������    29.37 s 132(1)�������������������������������������������   9.58 s 136������������������������������������  Int; 7.3; 27.38 s 136(1)�������������������   7.11, 7.21, 7.22, 7.23, 7.27; 13.30; 29.51, 29.105 s 139������������������������������������������������    27.13 s 141�������������������������������������������� Int; 29.90 s 141(1)������������������������������������   6.54; 29.98 s 141(2)�������������������������������������������    29.98 s 142������������������������������������������������   Int s 146�����������������   29.15, 29.16, 29.17, 29.27 s 146(1)�����������������������   29.46, 29.52, 29.89 s 146(2)����������������������   29.24, 29.27, 29.28, 29.29, 29.31 s 146(4)������������������������������������   9.24; 29.24 s 146(5)�������������������������������������������    29.25 s 146(5)(a)���������������������������������������    29.15 s 146(5)(b)������������������������������   29.15, 29.24 s 146(5)(c)������������������������������   29.15, 29.27 s 146(6)�������������������������������������������    29.25 s 146(1)�������������������������������������������    29.27 s 146(11), (12)���������������������������������    29.15 s 153����������������������������������   29.100, 29.103, 29.106 s 153(2)�������������������������������������������    16.10 s 153(4)�������������������������������������������   29.101 s 153(6)�������������������������������������������   29.101 s 153(7)������������������������������   29.101, 29.103 s 153(8)������������������������������   29.102, 29.105 s 162(1)(d)���������������������   29.3, 29.62, 29.63 Pt XI (ss 180–200)��������������������������   9.36 s 189(2)�������������������������   27.14, 27.41; 28.1

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Table of Statutes Land Registration Act 2002 – contd s 198�������������������������������������������   9.32, 9.34 s 198(1)�������������������   9.25, 9.27, 9.28, 9.29, 9.30, 9.32, 9.34 s 199��������������������������������  9.36; 13.6; 29.13 s 199(1)��������������������������������������   9.17, 9.35 s 199(1)(i)�������������������������   9.25, 9.30, 9.35, 9.36; 10.29 s 199(1)(ii)���������������������   8.117; 9.16, 9.19, 9.25, 9.36, 9.58; 10.29 s 199(1)(ii)(a)����������������������������������   9.17 s 199(1)(ii)(b)�����������������������������   9.18, 9.22 s 199(2)�����������������   8.117; 9.16, 9.19, 9.20, 9.36, 9.58; 10.29 s 199(3)���������������������������   8.117; 9.16, 9.21 s 199(4)�������������������������������������������   9.16 s 200������������������������������������������������    29.13 s 200(1)������������������������������������   1.18; 8.118 s 201(1)����������������������   16.10, 16.11, 16.19, 16.20, 16.21, 16.22 s 203(5)�������������������������������������������    14.32 s 205(1)(viii)�����������������������������������   14.7 s 205(1)(ix)�������������������   16.9, 16.11, 16.20, 16.21; 27.32 s 205(1)(xiv)������������������������������������    16.12 s 205(1)(xxi)�������������������������������   9.16, 9.35 s 205(1)(xxvii)��������������������������������   29.6 s 207������������������������������������������������   6.24 Sch 7������������������������������������������������   6.24 Law of Property Act 1969������������������   14.6; 16.1, 16.65; 17.1; 20.1; 24.107 s 24��������������������������������������������������   9.34 s 25��������������������������������������������������   9.34 s 25(2)���������������������������������������������   9.34 s 28(1)��������������������������   16.1, 16.58, 16.65, 16.136; 23.1 Sch 1������������������������������������������������   23.1 Sch 3�����������������   16.1, 16.58, 16.65, 16.136 Law of Property (Miscellaneous Provisions) Act 1989 s 1�������������������������������������������   11.3; 13.189 s 1(2)����������������������������������������   15.13; 26.3 s 1(3)�����������������������������������������������    15.13 s 2�������������������������������   32.46, 32.47, 32.48, 32.49, 32.68 s 2(1), (2)�����������������������������������������    32.46 s 2(3)����������������������������������������   26.3; 32.46 Leasehold Reform Act 1967���������������   11.199 s 2����������������������������������������������������   11.198 s 19�����������������������������������������   16.43; 28.23 s 19(1)���������������������������������������������    28.23 s 19(5)���������������������������������������������    16.43 s 19(8)���������������������������������������������    28.24 s 19(10)����������������������������������   16.43; 28.25 s 29, 30��������������������������������������������    16.47 Sch 4 para 1(5)��������������������������������������    16.47 Leasehold Reform, Housing and Urban Development Act 1993 s 26(1)���������������������������������������������    28.25 s 50(1)���������������������������������������������    28.25 Limitation Act 1939����������������������������   13.115 s 16��������������������������������������������������     9.6

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Limitation Act 1980�����������  6.3; 9.69; 11.160; 13.114; 29.40 s 4(3)�����������������������������������������������    29.40 s 5��������������������������   13.114, 13.115, 13.189 s 8��������������������������������������   13.114, 13.115, 13.189; 33.11 s 8(1), (2)�����������������������������������������    10.90 s 9�����������������������������������������   10.91; 13.114 s 9(1)�����������������������������������������������    10.90 s 15(1)���������������������������������������������    29.40 s 17��������������������������������������   1.51; 9.6, 9.69 s 19��������������������������������������������������    29.43 s 28������������������������������������   13.114, 13.118, 13.191; 29.42 s 29(2)���������������������������������������������    29.42 s 32�������������   13.114, 13.118, 13.191; 29.42 s 36�������������������������������������   13.115, 13.118 s 36(2)���������������������������������������������   13.119 s 38(1)���������������������������������������������    29.43 Sch 1 para 7(1)��������������������������������������    29.40 para 8�������������������������������������������    29.41 Lincoln’s Inn Act 1860���������������   10.21; 28.28 Local Government Act 1972���������������   1.65 s 111(1)�������������������������������������������   10.3 s 122(1), (4)�������������������������������������    10.62 s 123������������������������������������������������   1.65 s 270(1)�������������������������������������������    10.62 Local Government (Miscellaneous Provisions) Act 1982 s 32��������������������������������������������������   32.8 s 33����������������������������������������   10.16, 10.30; 28.17; 32.6, 32.8 s 33(1)���������������������������������������������    10.16 s 33(2)������������������������������������   10.16; 28.17 Sch 7 para 6�������������������������������������������   32.8 Local Government, Planning and Land Act 1980 s 113������������������������������������������������   1.65 Localism Act 2011������������������������������   1.65 s 1����������������������������������������������������   10.3 Local Land Charges Act 1975������������������������������������   28.25; 32.2, 32.10, 32.64 s 1����������������������������������������������������   10.23 s 1(1)(b)(ii)�����������������������   9.27, 9.32, 9.37, 9.73; 10.23; 28.29 s 1(1)(c)(ii)��������������������  9.73; 10.23; 28.29 s 1(2)(a), (c)������������������  9.73; 10.23; 28.29 s 1(3)�����������������������������������������������    10.23 s 2(c)������������������������������������������������    10.23 s 4����������������������������������������������������   9.27 s 4(6)�����������������������������������������������   32.2 s 5(5)�����������������������������������������������    10.26 s 10�����������������������������������������   28.16; 32.65 s 10(1)����������������������������   9.32, 9.37; 10.29, 10.30; 32.65 London Building Act 1894 s 7����������������������������������������������������   10.5 London Building Act 1930��������   10.21; 28.28 London Building Act 1938�����������������    10.95 London Building Acts (Amendment) Act 1939�����������������������������   10.21; 28.28

Table of Statutes Lord Cairn’s Act 1858 see Chancery Amendment Act 1858 Mental Capacity Act 2005������������������   21.3 Mission and Pastoral Measure 2011 s 58, 59������������������������������������������   28.19 s 63(2)–(4)������������������������������   10.11; 28.19 s 63(5)���������������������������������������������    10.11 s 75�����������������������������������������   10.11; 28.19 s 75(1)���������������������������������������������    16.47 s 75(3)������������������������������������   10.13; 16.47 Municipal Corporations Act 1882 s 108, 109����������������������������������������   1.65 National Health Service and Community Care Act 1990�����������������������������������   10.50, 10.51 National Trust Act 1907 s 21��������������������������������������������������    10.11 National Trust Act 1937 s 8��������������������������������������   10.11, 10.14; 16.47; 24.109 National Trust Act 1939 s 5����������������������������������������������������    16.47 s 8����������������������������������������������������    10.11 National Trust Act 1971 s 27�����������������������������������������   10.11, 10.13 Pastoral Measure 1983���������������   10.12; 28.20 s 62�����������������������������������������   10.12; 28.20 Perpetuities and Accumulations Act 1964��������������������������������������    29.37 s 1���������������������������������������������   29.5, 29.37 s 1(1)�����������������������������������������������   13.6 s 3���������������������������������������������   29.5, 29.62 s 11(1)����������������   13.6; 29.36, 29.37, 29.38 Perpetuities and Accumulations Act 2009�������������������������������   13.6; 29.39 s 1(9)�����������������������������������������������    29.63 Planning Act 2008�������������������������������    32.10 s 1����������������������������������������������������    29.63 s 194������������������������������������������������    10.55 s 223������������������������������������������������    32.20 Sch 9������������������������������������������������    10.55 Planning and Compensation Act 1991��������������������������������������   32.8 s 12(1)����������������������������  10.9; 30.28; 32.8, 32.27, 32.66 s 20��������������������������������������������������    16.73 s 26��������������������������������������������������    16.71 Planning and Compulsory Purchase Act 2004��������������������������������������    16.71 s 20��������������������������������������������������    16.72 s 38(6)���������������������������������������������    16.72 Protection from Eviction Act 1977 s 1����������������������������������������������������    29.18 s 2���������������������������������������������   13.5; 29.18 Public Health Act 1875����������������   28.7; 29.76 s 51�����������������������������������������   10.45, 10.52 Public Health Act 1936�����������������������    10.95 Railways Clauses Consolidation Act 1845 s 6����������������������������������������������������    10.43 Real Property Act 1845����������������   8.49; 27.13 s 5������������������������������������  Int; 3.1, 3.3, 3.4; 6.62; 8.66; 26.4 s 64��������������������������������������������������   Int

Refreshment Houses Act 1860������������   11.253 Rent Act 1977�������������������������������������   11.153 Rent (Agriculture) Act 1976������   20.40, 20.84 Rentcharges Act 1977�������������������������   29.7 s 1(3)�����������������������������������������������    29.38 s 1(4)(a)�������������������������������������������    29.38 s 2����������������������������������������������������   13.3 s 2(1)�������������������������������   1.51; 29.7, 29.45 s 2(2)������������������������������������������   1.51; 29.7 s 2(3)����������������������������������������   29.7, 29.68 s 2(4)�����������������������������������������   1.51; 13.3, 13.4; 29.7, 29.68 s 2(4)(a)����������������������������������   29.11, 29.68 s 2(4)(b)������������������������   29.8, 29.10, 29.45, 29.68, 29.70 s 2(5)�����������������������������������������   1.51; 29.7, 29.11, 29.68 s 3���������������������������������������������   1.51; 29.71 s 3(3)(b)�������������������������������������������    29.71 s 8����������������������������������������������������    29.71 s 8(4)�����������������������������������������������    29.71 Requisitioned Land and War Works Act 1945 s 33(1)���������������������������������������������    16.47 s 38(3)���������������������������������������������    16.47 Reverter of Sites Act 1987������������������    29.21 Road Traffic Regulation Act 1967 s 28�����������������������������������������   10.46, 10.47 Senior Courts Act 1981 s 19��������������������������������������������������    13.10 s 37��������������������������������������������������    13.25 s 37(1)������������������������������������   13.25; 30.39 s 37(2)���������������������������������������������    13.25 s 39��������������������������������������������������    30.13 s 49(1)������������������������������������   27.27, 27.38 s 50������������������   11.61; 13.31, 13.75, 13.77, 13.101, 13.185; 14.10; 30.14, 30.15, 30.25 s 51��������������������������������������������������    14.32 Settled Land Act 1882�������������������������    16.21 s 10(i)����������������������������������������������    16.21 Settled Land Act 1925�������������������   1.51, 1.63; 6.47; 15.11; 16.11 s 1(1)(ii)(d)��������������������������������������   21.1 s 1(1)(ix)������������������������������������������   21.1 s 7(1)�����������������������������������������������   7.14 s 18��������������������������������������������������   1.63 s 18(1)(a)�����������������������������������������   1.63 s 26, 27��������������������������������������������   21.1 s 49(1)�������������������������������������������   16.11 s 49(1)(b)����������������   1.18, 1.51, 1.63; 16.36 s 58(1), (2)��������������������������������   15.11; 21.2 s 59(2)��������������������������������������   15.11; 21.2 s 64��������������������������������������������������   1.63 s 102������������������������������������������������   21.2 s 106������������������������������������������������   6.48 Small Business, Enterprise and Employment Act 2015 s 133������������������������������������������������   7.45 s 133(2)�������������������������������������������   7.45 Small Holdings and Allotments Act 1908��������������������������������������������   1.66 Small Holdings and Allotments Act 1926��������������������������������������������   1.66

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Table of Statutes Statute Law Revision and Civil Procedure Act 1883���������������������    13.75 s 5����������������������������������������������������    13.75 Statute of Frauds 1677�������������������   7.20, 7.41 Supreme Court Act 1981 see Senior Courts Act 1981 Supreme Court of Judicature Act 1873��������������������������������������   13.9 s 25(6)���������������������������������������������   Int s 25(8)������������������������������������   13.24; 30.39 s 25(11)�������������������������������������������    27.27 s 26(6)���������������������������������������������   7.21 Supreme Court of Judicature Act 1875��������������������������������������   13.9 Supreme Court of Judicature (Consolidation) Act 1925 s 18(3)���������������������������������������������    30.14 s 44��������������������������������������������������    27.27 s 45��������������������������������������������������    30.39 Town and Country Planning Act 1932��������������������������������������   32.3 Town and Country Planning Act 1947��������������������������������������    19.65 s 25��������������������������������������������������   10.8 Town and Country Planning Act 1962��������������������������������������    19.66 s 37������������������������������  16.48; 20.94; 22.16 Town and Country Planning Act 1971���������������  16.108; 19.37, 19.66; 32.31, 32.32, 32.34 s 52��������������������  1.10; 10.8; 11.166; 16.48; 19.66, 19.67, 19.68; 20.86, 20.87, 20.88; 21.7; 22.15, 22.17, 22.18; 32.9, 32.30 s 52(1)�������������������������������   32.3, 32.4, 32.7 s 52(2), (3)���������������������������������������   32.7 s 53��������������������������������������������������    19.67 s 56��������������������������������������������������    22.16 s 127������������������������������������������������   1.18 s 164������������������������������������������������    32.31 Town and Country Planning Act 1990����������������������������   10.95, 10.97; 15.27; 16.44; 19.66 s 2E��������������������������������������������������    32.10 s 43��������������������������������������������������    16.81 s 52���������������������������������������   16.124; 19.37 s 54��������������������������������������������������    10.28 s 54A�����������������������������������������������    16.71 s 70(2)������������������������������������   16.68, 16.71 s 72�����������������������������������������   16.44; 32.12 s 72(1)(a)�����������������������������������������    32.12 s 73�����������������������������������������   16.44; 32.12 s 74(1)(b)�����������������������������������������    16.71 s 78��������������������������������������������������    32.13 s 106���������   1.10, 1.13; 10.8, 10.9, 10.13, 10.16, 10.18, 10.98; 12.20, 12.22; 16.40, 16.44, 16.48; 19.37, 19.67; 20.87; 22.16, 22.18; 28.22, 28.27; 32.1, 32.8, 32.9, 32.10, 32.16, 32.17, 32.22, 32.25, 32.26, 32.27, 32.28, 32.29, 32.30, 32.32, 32.36, 32.41, 32.42, 32.45, 32.46, 32.47, 32.49, 32.53, 32.54, 32.55, 32.56, 32.58, 32.60, 32.61, 32.64, 32.66, 32.67, 32.68, 32.69, 32.71, 32.75, 32.76, 32.80, 32.91, 32.92

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Town and Country Planning Act 1990 – contd s 106(1)�����������  10.13; 16.40, 16.47; 30.28; 32.7, 32.16, 32.29, 32.36 s 106(1)(a)������������������   16.40; 32.16, 32.35, 32.36, 32.43, 32.44 s 106(1)(b)�������������������   16.40; 32.25, 32.43 s 106(1)(c)��������   16.40; 32.25, 32.43, 32.45 s 106(1)(d)��������   16.40; 32.16, 32.25, 32.43 s 106(2)�������������������������������������������   32.7 s 106(3)������������������������   10.13; 32.7, 32.55, 32.57, 32.60, 32.76 s 106(4)������������������������������������   32.7, 32.57 s 106(5)�����������������������   30.28; 32.18, 32.71 s 106(6)�����������������������   30.28; 32.18, 32.72 s 106(6)(a)���������������������������������������    32.74 s 106(7)�������������������������������������������    32.73 s 106(8)�������������������������������������������    32.74 s 106(9)����������������������  10.13; 16.47; 32.11, 32.41, 32.53, 32.54 s 106(9)(d)�������������������   32.16, 32.54, 32.70 s 106(10)�����������������������������������������    32.75 s 106(11)�����������������������������������������    32.64 s 106A�����������������������������������  19.37; 20.87; 32.2, 32.10, 32.75 s 106A(1)����������������������������������������    10.13 s 106A(1)(a), (b)�����������������������������    32.76 s 106A(2)�������������������������������   32.41, 32.76 s 106A(3)����������������������������������������    32.26 s 106A(6)�������������������������������   32.77, 32.80 s 106B��������������������������   10.13; 32.2, 32.26, 32.76, 32.87, 32.89 s 106B(5)�����������������������������������������    32.90 s 106BA–106BC�����������������������������   32.2 s 106C���������������������������������������������    32.10 s 171A(1)(b)������������������������������������    32.15 s 173, 187����������������������������������������    16.44 s 187A������������������������������������   16.44; 32.15 s 192������������������������������������������������    19.67 s 203(1)�������������������������������������������    10.69 s 203(2)�������������������������������������������    10.69 s 203(2)(d)���������������������������������������    10.70 s 203(3), (4)�������������������������������������    10.69 s 203(5)�������������������������������������������    10.69 s 203(5)(d)���������������������������������������    10.70 s 203(6)�������������������������������������������    10.69 s 204������������������������������������������������    10.69 s 204(5)(d)���������������������������������������    10.70 s 205������������������������������������������������    10.68 s 232, 236����������������������������������������    10.70 s 237���������������������������   10.52, 10.54, 10.55, 10.56, 10.68, 10.70, 10.71 s 237(1)�������������������������������������������    10.53 s 237(1)(b)��������������������������������   1.18; 10.75 s 237(1A)����������������������������������������    10.55 s 238, 239����������������������������������������    10.53 s 246(1)�������������������������������������������    10.68 Pt XI (ss 262–283)������������������������������    10.73 s 316������������������������������������������������    16.73 Tribunals, Courts and Enforcement Act 2007 s 6�������������������������������������������   24.34; 33.11 s 13��������������������������������������������������   24.107 s 13(1)���������������������������������������������   24.107

Table of Statutes Tribunals, Courts and Enforcement Act 2007 – contd s 13(3), (4)���������������������������������������   24.110 s 13(8)���������������������������������������������   24.115 s 13(11)�������������������������������������������   24.107 s 13(12)(a)���������������������������������������   24.107 s 14��������������������������������������������������   24.116 s 14A, 14B��������������������������������������   24.117 s 25���������������������������������������    24.61, 24.62 s 27��������������������������������������������������   24.145 s 29��������������������������������������������������   24.119 s 29(4), (5)���������������������������������������   24.119

Trustee Act 1925 s 48, 50��������������������������������������������    30.13 Vendor and Purchaser Act 1874 s 2����������������������������������������������������   9.22 Waterworks Clauses Act 1847 s 6����������������������������������������������������    10.43 Wentworth Estate Act 1964�����������������   10.21; 20.26; 28.28 Wildlife and Countryside Act 1981 s 39�����������������������������������������   10.17; 28.18 s 39(3)������������������������������������   10.30; 28.18

xxix

xxx

Table of Statutory Instruments

Civil Procedure (Amendment) Rules 2013, SI 2013/262 ....................... 24.66 Civil Procedure Rules 1998, SI 1998/3132 ..................... 13.13, 13.16, 13.17, 13.47, 13.62, 13.68, 13.107, 13.171; 14.14, 14.20, 14.25, 14.33; 24.98, 24.135; 29.30, 29.110; 30.11, 30.28 r 3.1(2)............................................. 13.177 r 3.1(2)(f)......................................... 13.177 r 3.9 ................................................. 24.66 Pt 7 .................................................. 14.14 r 8.1(2)(a) ............................... 14.14; 15.42 r 8.1(3)(a) ........................................ 14.14 r 8.2(b), (c) ...................................... 14.15 r 8.2A .............................................. 14.20 r 8.5(1)–(6) ...................................... 14.16 Pt 20 ................................................ 29.110 PD 24 .............................................. 30.28 r 25.1 ............................................... 13.16 r 25.1(c)(ii) ...................................... 30.11 r 40.20 .................................... 13.10, 13.12 Pt 52 ................................... 24.112, 24.113 r 42.6(1), (2) .................................... 24.112 r 70.2A ........................ 13.72; 30.13; 33.11 r 81.4 ...................................... 13.72; 30.12 r 81.20 ............................................. 30.12 r 81.20(1)......................................... 30.12 Commonhold (Land Registration) Rules 2004, SI 2004/1830 ........... 31.5 Commonhold Regulations 2004, SI 2004/1829 .......................... 31.5, 31.7 reg 5................................................. 31.18 Sch 3.................................................. 31.7 Community Infrastructure Levy Regulations 2010, SI 2010/948 reg 122(2) ........................................ 32.20 reg 123............................................. 32.21 Competition Act 1998 (Land Agreements Exclusion Revocation) Order 2010, SI 2010/1709 .............................. 12.4 Competition Appeal Tribunal Rules 2003, SI 2003/1372 ..................... 12.15 Groceries Market Investigation (Controlled Land) Order 2010 ...... 12.17 art 2 ............................. 12.17, 12.25, 12.26 art 3 ................................................. 12.18 art 4 ................................................. 12.19 art 4(2)............................................. 12.19 art 4(3)............................................. 12.19 art 4(3)(b) ........................................ 12.20 art 4(3)(b)(i) .................................... 12.20

Groceries Market Investigation (Controlled Land) Order 2010 – contd art 5 ................................................. 12.22 art 6 ................................................. 12.20 art 7 ................................................. 12.23 art 7(2)(b) ........................................ 12.23 art 8 ................................................. 12.24 art 9 ......................... 12.20, 12.23, 12.24 art 10 ............................................... 12.20 Sch 2a .............................................. 12.19 Sch 2b.............................................. 12.20 Sch 3a .............................................. 12.23 Sch 4............................ 12.20, 12.21, 12.23 Land Charges Act 1972 (Commencement) Order 1972, SI 1972/2058 ............................... 8.112 Land Registration Fee Order 2013, SI 2013/3174 Sch 3 Pt 1 para 1(b) .................................. 24.150 Land Registration Rules 1925, SI 1925/1093 ............................... 8.124 r 131 ................................................ 29.104 r 131(8)............................................ 29.104 Land Registration Rules 2002, SI 2002/2539 r 84(4).............................................. 15.16 r 87 .................................................. 15.16 Land Registration Rules 2003, SI 2003/1417 ........................ 9.40; 33.11 r 35(1).............................................. 8.124 r 64 .................................................. 28.14 r 65 .................................................. 29.109 r 81 .................................................. 9.50 r 92 .................................................. 29.96 r 126(1)............................................ 9.53 Lands Tribunal Rules 1975, SI 1975/299 ................................. 24.26 Lands Tribunal Rules 1996, SI 1996/1022 .................... 24.26, 24.130 r 17(1).............................................. 16.6 Perpetuities and Accumulations Act 2009 (Commencement) Order 2010, SI 2010/37 .................. 13.6; 29.39 Property (Northern Ireland) Order 1997, SI 1997/1179 (NI 4) .......... 33.12 Rules of the Supreme Court 1965, SI 1965/1776 Order 5 r 4 .................................................... 14.6 Order 18 r 19 .................................................. 13.62

xxxi

Table of Statutory Instruments Rules of the Supreme Court 1965, SI 1965/1776 – contd Order 29 r 2����������������������������������������������������    30.11 Order 25 r 5����������������������������������������������������   13.9 Order 45 r 8����������������������������������������������������    33.11 Order 86 r 1����������������������������������������������������    30.28 Supreme Court Rules 2009, SI 2009/1603�������������������������������   24.118 r 5(1)������������������������������������������������   24.118 r 11(1)����������������������������������������������   24.118 Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992, SI 1992/2832������������   32.76, 32.81 reg 3(1)��������������������������������������������    32.82 reg 4���������������������������������������   32.83, 32.85 reg 5������������������������������������������������    32.85 reg 6(1)��������������������������������������������    32.85 reg 6(2)�����������������������������������   32.85, 32.87 reg 6(3)��������������������������������������������   32.86 reg 7(1)��������������������������������������������    32.88 reg 7(2)��������������������������������������������    32.89 reg 7(3)��������������������������������������������    32.90 reg 8������������������������������������������������    32.90 Schedule Pt 1����������������������������������������������    32.83 Tribunal Procedure (Amendment No 3) Rules 2013, SI 2013/1188�����������   24.1 Tribunal Procedure (Amendment) Rules 2012, SI 2012/500�������������   24.1 Tribunal Procedure (Amendment) Rules 2014, SI 2014/514�������������   24.1 Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010, SI 2010/2600����������������   16.6; 24.1, 24.2, 24.3, 24.25, 24.39; 33.11 Pt 1 (rr 1–3)�������������������������������������   24.3 r 2����������������������������������������������������   24.3 r 4(3)������������������������������������������������   24.57 r 4(4)(b)�������������������������������������������   24.96 r 5����������������������������������������������������   16.70 r 5(1)������������������������������������������������   24.56 r 5(3)������������������������������������������������   24.56 r 5(3)(a)����������������������������������   24.18, 24.63 r 5(3)(b)�������������������������������������������   24.7 r 5(3)(e)�������������������������������������������   24.110 r 5(3)(i)��������������������������������������������    24.97 r 5(3)(j)��������������������������������������������    24.67 r 5(3)(k)�������������������������������������������    24.36 r 6�����������������������   24.5, 24.44, 24.58, 24.60 r 7����������������������������������������������������   24.6 r 7(2)���������������������������������������   24.62, 24.69 r 7(2)(d)�������������������������������������������    24.68

xxxii

Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010, SI 2010/2600 – contd r 7(3)–(6)�����������������������������������������    24.69 r 8������������������������������������   16.6; 24.6, 24.62 r 8(1)����������������������������   24.64, 24.65, 24.68 r 8(3)(a)�����������������������   24.64, 24.65, 24.69 r 8(3)(b)����������������������������������   24.64, 24.96 r 8(5)������������������������������������������������    24.66 r 8(6)������������������������������������������������    24.65 r 10(1), (6)���������������������������������������   24.120 r 10(8)����������������������������������������������   24.135 r 10(10)��������������������������������������������   24.110 r 11(3)����������������������������������������������    24.39 r 12��������������������������������������������������    24.17 r 13��������������������������������������������������   24.4 r 14��������������������������������������������������   24.5 r 16��������������������������������������������������    24.98 r 16(1)(c)�����������������������������������������    24.70 r 16(6)����������������������������������������������    24.85 r 17(1)����������������������������������������������    24.71 r 17(2)�������������������������������������   24.26, 24.70 r 17(5)����������������������������������������������    24.73 r 19��������������������������������������������������    24.96 r 20��������������������������������������������������    24.89 r 20(1)–(3)���������������������������������������    24.86 r 20(4)����������������������������������������������    24.87 r 32��������������������������������������������������   24.8 r 32(2)����������������������������������������������    24.10 r 32(3)����������������������������������������������   24.6 r 33���������������������������������������������   16.7; 24.8 r 33(1)����������������������������������������������    24.11 r 33(2)����������������������������������������������    24.12 r 33(3)����������������������������������������������    24.13 r 34�������������������������������������������   24.8, 24.42 r 34(1)��������������������������   24.13, 24.17, 24.19 r 34(2)����������������������������������������������    24.19 r 35�����������������������������������������   24.34, 24.36 r 36��������������������������������������������������    24.40 r 37�����������������������������������������   24.15, 24.25 r 38�����������������������������������������   16.70; 24.16 r 39��������������������������������������������������   24.104 r 48��������������������������������������������������    24.92 r 48(7)����������������������������������������������    24.92 r 49��������������������������������������������������    24.94 r 50��������������������������������������������������    24.88 r 51��������������������������������������������������   24.100 r 53��������������������������������������������������   24.103 r 54��������������������������������������   24.95, 24.105, 24.110 r 54(3)�����������������������������������   24.95, 24.106 r 55(1), (2), (2A), (3)–(5)����������������   24.110 r 55(6)����������������������������������������������   24.111 r 56��������������������������������������������������   24.115 r 56(1)����������������������������������������������   24.114 r 57��������������������������������������������������   24.114 r 58��������������������������������������������������   24.116

Table of Cases

6, 8, 10 & 12 Elm Avenue New Milton, Re [1984] 1 WLR 1398����������������  8.42, 8.49, 8.97, 8.108, 8.110, 8.113; 10.32, 10.34, 10.35, 10.46, 10.49, 10.64; 11.173; 14.10, 14.20, 14.27, 14.29 12 Park View Skipton, Re [2016] UKUT 552, LC����������������������������������������������������   11.109; 23.10

A

A Lewis & Co (Westminster) Ltd v Bell Property Trust Ltd [1940] Ch 345, [1940] 1 All ER 570, Ch D������������������������������������������������������������������  11.137, 11.174, 11.250 Abbey Homesteads (Developments) Application, Re (1985) 49 P & CR 263, [1986] RVR 159, [1985] JPL 189, LT������������������������������������������������������������������   19.48; 24.48 Abbey Homesteads (Developments) Ltd v Northamptonshire CC (1987) 53 P & CR 1, [1986] 1 EGLR 24, (1986) 278 EG 1249, [1986] RVR 159, [1986] JPL 683, (1986) 83 LSG 1902, (1986) 130 SJ 482, CA�����������������������������������������������   1.10; 3.4; 16.35; 19.48; 22.2; 24.107 Abbey Homesteads (Developments) Ltd v Northamptonshire CC (1991) 61 P & CR 295, [1991] 14 EG 119, [1990] RVR 240, [1990] EG 120 (CS), LT�������������������������������������   19.48 Abbey v Gutteres (1911) 55 SJ 364�������������������������������������������������������������������������������   1.10; 16.16 Abbots Park Estate (No 1), Re [1972] 1 WLR 598, [1972] 2 All ER 177, (1972) 23 P & CR 180, (1972) 116 SJ 220, Ch D����������������������������������������������������������������������������������������   28.23 Achilli v Tovell [1927] 2 Ch 243, Ch D�����������������������������������������������������������   1.10; 10.96; 11.127; 13.88, 13.90, 13.120 Ackroyd v Smith,138 ER 68; (1850) 10 CB 164, Ct of Comm Pleas�����������������������������������    1.8 Acraman v Price (1870) 18 WR 540��������������������������������������������������������������������������������������   30.19 Adams v Rushmon Ltd (2000) WL 542133���������������������������������������������������������������������������   11.34 Adealon International Proprietary Ltd v Merton LBC [2007] EWCA Civ 362, [2007] 1 WLR 1898, (2007) 151 SJLB 577, CA�����������������������������������������������������������������������   29.90 Adedeji v Pathaia [2014] EWCA Civ 681�����������������������������������������������������������������������������  7.45 Afzar’s Application, Re [2002] 1 P & CR 17, LT��������������������������������������������   19.38, 19.46; 20.26, 20.34, 20.76 A-G & London Property Investment Trust Ltd v Richmond Corpn & Gosling & Sons (1903) 89 LT 700���������������������������������������������������������������������������������������������������   8.100 A-G of Belize v Belize Telecom Ltd [2009] UKPC 10, [2009] 1 WLR 1988, [2009] 2 All ER 1127, [2009] 2 All ER (Comm) 1, [2009] Bus LR 1316, [2009] BCC 433, [2009] 2 BCLC 148, PC (Belize)����������������������������������������������������������������������������������������������   11.24 A-G v Barker (Worldwide Injunction) [1990] 3 All ER 257, CA���������������������������������  13.38, 13.63 A-G v Mid Kent Railway Co & South Eastern Railway Co (1867–68) LR 3 Ch App 100, CA�������������������������������������������������������������������������������������������������������������  11.127 A-G v Plymouth Corpn (1909) 100 LT 742, CA�������������������������������������������������������������������  11.174 AH Cole (Designs) Ltd’s Application, Re (1964) 15 P & CR 101, 186 EG 853, [1963] JPL 480, LT��������������������������������������������������������������������������������������������������������   19.21 AH Field & Co (Developers) Application, Re (1957) 7 P & CR 169, 165 EG 499, [1955] JPL 458, LT��������������������������������������������������������������������������������������������������������  16.108 AH (Sudan) v Secretary of State for the Home Department [2007] UKHL 49, [2008] 1 AC 678, [2007] 3 WLR 832, [2008] 4 All ER 190, [2008] Imm AR 289, [2008] INLR 100, (2007) 151 SJLB 1500, HL��������������������������������������������������������������  24.101 Aiken v Stewart Wrightson Members Agency Ltd [1995] 1 WLR 1281, [1995] 3 All ER 449, [1995] 2 Lloyd’s Rep 618, [1995] CLC 318, QBD��������������������������������  13.189 AJ Building & Plastering Ltd v Turner [2013] EWHC 484 (QB), [2015] TCLR 3, [2013] Lloyd’s Rep IR 629, QBD����������������������������������������������������������������������������������   11.21 AJ Dunning & Sons (Shopfitters) Ltd v Sykes & Son (Poole) Ltd [1987] Ch 287, [1987] 2 WLR 167, [1987] 1 All ER 700, (1987) 53 P & CR 385, (1986) 83 LSG 3751, (1986) 130 SJ 860, CA���������������������������������������������������������������������������������������������������   8.124

xxxiii

Table of Cases Alderson v Secretary of State (1999) The Times, 5 July���������������������������������������������   16.41; 32.40 Alec Lobb Ltd v Total Oil GB Ltd [1985] 1 WLR 173, [1985] 1 All ER 303, [1985] 1 EGLR 33, (1985) 273 EG 659, (1985) 82 LSG 45, ~ (1985) 129 SJ 83, CA����������   6.47; 12.3 Alexander v Mansions Pty Ltd (1900) 16 TLR 431���������������������������������������������������  13.78, 13.101 Allen v Greenwood [1980] Ch 119, [1979] 2 WLR 187, [1979] 1 All ER 819, (1979) 38 P & CR 54, (1978) 249 EG 139, [1979] JPL 237, (1978) 122 SJ 828, CA�������������������  11.132 Allen v Veranne Builders Ltd [1988] NPC 11��������������������������������������   1.26, 1.45; 6.75; 8.22, 8.97 Alliance Economic Investment Co v Berton (1923) 92 LJKB 750���������������������������������������   16.54 Allnatt (London)’s Application, Re (1961) 12 P & CR 256, LT��������������������������������  16.65, 16.110, 16.135; 22.16 Alwoodley Motors Application, Re (1962) 13 P & CR 195, 180 EG 111, [1961] JPL 481, LT����������������������������������������������������������������������������������������������������������   22.5, 22.16; 23.9 Amec Developments Ltd v Jury’s Hotel Management (UK) Ltd [2002] TCLR 13, (2001) 82 P & CR 22, [2001] 1 EGLR 81, [2001] 07 EG 163, [2000] EG 138 (CS), [2000] NPC 125, Ch D���������������������������������������������������������������������������������������������������  13.106 American Cyanamid Co v Ethicon Ltd (No 1) [1975] AC 396, [1975] 2 WLR 316, [1975] 1 All ER 504, [1975] FSR 101, [1975] RPC 513, (1975) 119 SJ 136, HL�������������������������������������������������������������������������������������  13.58, 13.62, 13.63, 13.64, 13.65, 13.66, 13.131 Ames, Re [1893] 2 Ch 479, Ch D������������������������������������������������������������������������������������������  6.48 Amoco Australian Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd [1975] AC 561, [1975] 2 WLR 779, [1975] 1 All ER 968, (1975) 119 SJ 301, PC (Aust)���������������������  12.3 Amsprop Trading Ltd v Harris Distribution Ltd [1997] 1 WLR 1025, [1997] 2 All ER 990, [1997] 2 EGLR 78, [1997] 47 EG 127, [1996] NPC 154, Ch D�����������������������������������    3.4 Argyle Motors (Birkenhead) Ltd v Birkenhead Corpn [1975] AC 99, [1974] 2 WLR 71, [1974] 1 All ER 201, 72 LGR 147, (1974) 27 P & CR 122, (1973) 118 SJ 67, HL������   10.80 Arnold v Britton [2015] UKSC 36, [2015] AC 1619, [2015] 2 WLR 1593, [2016] 1 All ER 1, [2015] HLR 31, [2015] 2 P & CR 14, [2015] L & TR 25, [2015] CILL 3689, SC������������������������������������������������������������������������������������������������������  11.12, 11.23 Ashby v Wilson [1900] 1 Ch 66, Ch D����������������������������������������������������������������������������������  11.235 Aspden v Seddon (1874–75) LR 10 Ch App 394, CA�����������������������������������������������������������   29.73 Aspden v Seddon (1876) 1 Ex D 496, CA��������������������������������������������������������������������  29.72, 29.73 Associated Electrical Industries Ltd v Alstom UK [2014] EWHC 430 (Comm), [2014] 3 Costs LR 415, QBD����������������������������������������������������������������������������������������   24.67 Associated Property Owners Application, Re (1965) 16 P & CR 89, 190 EG 465, [1964] JPL 492, LT���������������������������������������������������������������������������������������������   17.15, 17.17; 19.40, 19.45, 19.50 Austerberry v Oldham Corpn (1885) 29 Ch D 750, CA����������������������   1.16; 25.3; 27.4, 27.6; 28.1, 28.4, 28.7, 28.8; 29.70; 30.27 Austin’s Application, Re (1981) 42 P & CR 102, [1980] JPL 605����������������������   8.20, 8.22; 15.25; 20.26, 20.84; 23.26 Australian Hardwoods Pty Ltd v Railways Commissioner [1961] 1 WLR 425, [1961] 1 All ER 737, (1961) 105 SJ 176, PC (Aust)��������������������������������������������������������������������  30.6 Avon CC v Millard 83 LGR 597, (1985) 50 P & CR 275, [1985] 1 EGLR 171, (1985) 274 EG 1025, [1986] JPL 211, (1985) 82 LSG 1173, (1985) 129 SJ.269, CA�����������  13.63, 13.64 Ayr Harbour Trustees v Oswald (1883) 8 App Cas 623, (1883) 10 R (HL) 85, HL��������������  1.66 Azfar’s Application, Re [2002] 1 P & CR 17, LT������������������������������������������������������������������   17.18

B

BP Refinery (Westernport) Pty Ltd v The President, Councillors & Ratepayers of Shire & Hastings (1978) 52 AJLR 20������������������������������������������������������������������������������������������   11.23 Baily v De Crespigny [1869] LR 4 QB 180��������������������������������������   10.66; 11.59, 11.62; 15.29 Ballard’s Conveyance, Re [1937] Ch 473, [1937] 2 All ER 691, (1957) 7 P & CR 313, Ch D���������������������������������������������������������������������������������������������������������������   1.41, 1.52, 1.55; 6.47, 6.48, 6.49 Bank of Nova Scotia v Hellenic Mutual War Risk Association (Bermuda) Ltd (The Good Luck) [1990] 1 QB 818, [1990] 2 WLR 547, [1989] 3 All ER 628, [1989] 2 Lloyd’s Rep 238, (1990) 87(10) LSG 34, CA�����������������������������������������������������������������������������   11.95 Banks Application, Re (1977) 33 P & CR 138, [1977] JPL 36, LT����������������������������   20.26, 20.84; 23.14, 23.25 Bannister v Bannister [1948] 2 All ER 133, [1948] WN 261, (1948) 92 SJ 377, CA�����������  7.27 Barber v Whiteley (1865) 34 LJQB 212��������������������������������������������������������������������������������   29.72 Barclays Bank Plc’s Application, Re (1990) 60 P & CR 354, LT�����������  16.5, 16.37, 16.80, 16.86, 16.98, 16.124; 19.37, 19.52 Barret v Blagrave 31 ER 735, (1800) 5 Ves Jr 555, Ct of Chancery�����������������������������������  1.3, 1.10

xxxiv

Table of Cases Barrett v Hilton Developments Ltd [1975] Ch 237, [1974] 3 WLR 545, [1974] 3 All ER 944, (1975) 29 P & CR 300, (1974) 118 SJ 533, CA��������������������������������������������   8.113; 9.38 Barry’s Application, Re (1981) 41 P & CR 383, [1980] JPL 830, LT�����������������������  16.87, 16.108, 16.122; 20.26 Barton v Keeble [1928] Ch 517, [1928] All ER Rep 198, Ch D�������������������������������������������  11.229 Bass‘ Application, Re (1973) 26 P & CR 156, [1973] JPL 378, LT�����������������������  20.3, 20.4, 20.6, 20.8, 20.14, 20.26, 20.35, 20.61; 22.4; 24.81 Bateman v Hunt [1904] 2 KB 530, CA����������������������������������������������������������������������������������  9.19 Baxter v Four Oaks Properties Ltd [1965] Ch 816, [1965] 2 WLR 1115, [1965] 1 All ER 906, (1965) 109 SJ 332, Ch D������������������   1.27; 6.12; 8.12, 8.51, 8.52, 8.54, 8.69, 8.78; 11.156, 11.227; 13.89, 13.90, 13.92, 13.110, 13.133 Beardsley & Co’s Application, Re (1973) 25 P & CR 233, LT������������������������  20.26, 20.56, 20.59, 20.87, 20.88; 22.3 Beckett v Midland Rly Co (1867) LR 3 CP 82, Ct of Comm Pleas��������������������������������������   10.84 Beecham Group Ltd’s Application (1981) 41 P & CR 369, (1980) 256 EG 829, [1981] JPL 55, LT����������������������������������������������������������   16.73, 16.74, 16.97, 16.108, 16.112; 19.21, 19.67; 20.14; 22.16 Beech’s Application, Re (1990) 59 P & CR 502, LT����������������������������������������  16.87, 16.90, 16.98, 16.108; 19.20; 22.16 Beechwood Homes Ltd’s Application, Re (1992) 64 P & CR 535, [1992] JPL 872, LT��������������������������������������������������������������������������������������������������������   11.107; 20.26 Beechwood Homes Ltd’s Application, Re [1994] 2 EGLR 178, [1994] 28 EG 128 (CA)���������������������������������������������������������������������������������������  11.67, 11.85, 11.86, 11.104 Belfast West Power Ltd v Belfast Commissioners [1998] NI 112, Ch D������������������������������   13.11 Belgravia Insurance Co v Meah [1964] 1 QB 436, [1963] 3 WLR 1033, [1963] 3 All ER 828, (1963) 107 SJ 871, CA������������������������������������������������������������������������������   29.25 Bell v Norman C Ashton Ltd (1957) 7 P & CR 359, [1956] JPL 752, Ch D�����������������������  8.78, 8.100, 8.113, 8.117; 11.84, 11.86, 11.88, 11.90, 11.104; 13.168 Bellamy v Sabine 44 ER 842, (1857) 1 De G & J 566, Ct of Chancery������������������������������  11.69 Bennett’s & Tamarlin Ltd’s Applications, Re (1987) 54 P & CR 378, LT��������   1.30; 16.58; 20.86; 22.17; 23.1, 23.2, 23.8, 23.13, 23.33, 23.42, 23.46, 23.47 Bents Brewery Co’s Application, Re (1965) 16 P & CR 103, 191 EG 905, [1964] JPL 819, LT��������������������������������������������������������������������������������������������������������������������   16.35 Berridge’s Application, Re (1957) 7 P & CR 125, 164 EG 371, [1954] JPL 765, LT�������������������������������������������������������������������������������������������������������  16.135, 16.138 Berton v Alliance Economic Investment Co [1922] 1 KB 742, CA��������������  11.58, 11.202, 11.240 Best v Glenville [1960] 1 WLR 1198, [1960] 3 All ER 478, 58 LGR 333, (1961) 12 P & CR 48, (1960) 104 SJ 934, CA��������������������������������������������������������������������������������������   19.53 Beswick v Beswick [1968] AC 58, [1967] 3 WLR 932, [1967] 2 All ER 1197, (1967) 111 SJ 540, HL��������������������������������������������������������������������������������������������������������   3.4; 26.4; 30.5 Bevan Application, Re (1965) 16 P & CR 92, 191 EG 62, [1964] JPL 556, LT�������   16.135; 19.13 Bewick’s Application, Re (1997) 73 P & CR 240, (1997) 161 JPN 389, LT������������   16.108; 22.17 Bhimji v Salih, unreported, 4 February 1981, CA�����������������������������������������������������������������   29.34 Bickmore v Dimmer [1903] 1 Ch 158, CA����������������������������������������������������������������������������  11.121 Birdlip Ltd v Hunter [2016] EWCA Civ 603, [2017] 1 P & CR 1, CA��������  8.27, 8.32, 8.41, 8.43, 8.44, 8.45, 8.49, 8.62, 8.71, 8.73, 8.74, 8.79, 8.88, 8.90, 8.91, 8.94 Bidwell v Holden (1890) 63 LT 104��������������������������������������������������������������������������������������   30.28 Billson v Residential Apartments Ltd [1992] 1 AC 494, [1992] 2 WLR 15, [1992] 1 All ER 141, (1992) 24 HLR 218, (1992) 63 P & CR 122, [1992] 1 EGLR 43; [1992] 01 EG 91, (1992) 89(2) LSG 31, (1992) 136 SJLB 10, HL����������������������������������  29.25, 29.27, 29.28 Birmingham & District Land Co & Allday, Re [1893] 1 Ch 342, Ch D���������������  8.22, 8.23, 8.108 Birmingham Joint Stock Co v Lea (1877) 36 LT 843����������������������������������������������������   1.51; 16.16 Bishop of St Albans v Battersby (1878) 3 QBD 359, QBD��������������������������������������  11.137, 11.138 Biss v Smallburgh Rural DC [1965] Ch 335, [1964] 3 WLR 88, [1964] 2 All ER 543, (1964) 128 JP 354, 62 LGR 409, (1964) 15 P & CR 351, [1964] RVR 597, (1964) 108 SJ 297, CA���������������������������������������������������������������������������������������������������������������������   13.19 Blackburn and District Benefit Building Society, ex p Graham, Re (1889) 42 Ch D 343, CA��������������������������������������������������������������������������������������������������������������������������   29.69 Blackburn v David Aston (Suffolk) Ltd [2001] All ER (D) 138 (Dec), [2001] WL 1676961��������������������������������������������������������������������������������������������������������   11.6; 13.152 Blake v Marriage (1893) 9 TLR 569�������������������������������������������������������������������������������������  11.228

xxxv

Table of Cases Blumenthal v Church Commissioners for England [2004] EWCA Civ 1688, [2005] 2 P & CR 20, [2005] 1 EGLR 78, [2005] 12 EG 220, (2005) 149 SJLB 56, CA����������   16.41; 32.39 Blue Town Investments Ltd v Higgs & Hill Plc [1990] 1 WLR 696, [1990] 2 All ER 897, [1990] 32 EG 49, (1990) 87(14) LSG 47, (1990) 134 SJ 934, Ch D���������  13.57, 13.58, 13.62 Bluenthal v Church Comrs for England [2004] EWCA Civ 1688, [2005] 2 P & CR 20, [2005] 1 EGLR 78, [2005] 12 EG 220, (2005) 149 SJLB 56, CA���������������������������  1.10, 1.13 Blyth Corp’s Application, Re (1963) 14 P & CR 56, 182 EG 679, [1962] JPL 551, LT�������   16.32 Bolton v Bolton (1879) 11 Ch D 968, Ch D��������������������������������������������������������������������������    1.8 Bonnen v Sadler (1808) 14 Ves 526��������������������������������������������������������������������������  11.239, 11.250 Bourne v McDonald [1950] 2 KB 422, [1950] 2 All ER 183, 66 TLR (Pt 2) 226, (1951) 95 SJ 435, CA����������������������������������������������������������������������������������������������  30.3, 30.28 Bowden’s Application, Re (1984) 47 P & CR 455, [1983] JPL 819, LT����������������������   20.93; 22.4; 23.52, 23.53 Bower & Bower v Goodyear [1986] CLY 2827, CC�������������������������������������������������������������  11.162 Bowes v Law (1869–70) LR 9 Eq 636, Ct of Chancery������������������   11.144, 11.228, 11.229; 13.43 Bowser v Colby, 66 ER 969, (1841) 1 Hare 109, Ct of QB���������������������������������������������������   29.26 Boyle v Tamlyn, 108 ER 473, (1827) 6 B & C 329, Ct of KB����������������������������������������������  29.113 Bracewell v Appleby [1975] Ch 408, [1975] 2 WLR 282, [1975] 1 All ER 993, (1975) 29 P & CR 204, (1974) 119 SJ 114, Ch D���������������������������������������������������������������������   13.91 Bradford Banking Co Ltd v Henry Briggs Son & Co Ltd (1886) 12 App Cas 29 HL����������   29.58 Bradley Clare Estates Application, Re (1988) 55 P & CR 126, LT���������������������������   16.124;19.10, 19.28, 19.39 Bramwell v Lacy (1879) 10 Ch D 691, Ch D�����������������������������������������������������������  11.127, 11.173 Bray v Fogarty, I.R 4 Eq 544�������������������������������������������������������������������������������������������������  11.222 Breams Property Investment Co Ltd v Strougler [1948] 2 KB 1, [1948] 1 All ER 758, 64 TLR 292, [1948] LJR 1515, (1948) 92 SJ 238, CA��������������������������������������������������  1.26 Brett’s Application, Re (1966) 17 P & CR 49, [1961] JPL 417, LT��������������������������������������   16.87 Brewster v Kodgill (1698) 12 Mod Rep 166�������������������������������������������������������������������������  1.51 Briarwood Estates Ltd, Re (1980) 39 P & CR 419, LT������������������������������������   19.41; 23.13, 23.52 Bridges v Mees [1957] Ch 475, [1957] 3 WLR 215, [1957] 2 All ER 577, (1957) 101 SJ 555, Ch D������������������������������������������������������������������������������������������������������������������  7.19 Brierfield’s Application, Re (1978) 35 P & CR 124, LT�������������������������������������   20.26, 20.61; 22.3 Brigg v Thornton [1904] 1 Ch 386, CA������������������������������������������������������������   1.15; 11.82, 11.235 Briggs v McCusker [1996] 2 EGLR 197�������������������������������������������������������������������������������  11.216 Bristol Corp v Virgin [1928] 2 KB 622, KBD�����������������������������������������������������������������������   29.15 British Empire Mutual Life Insurance Co v Cooper (1888) 4 TLR 362�������������������������������  11.121 British Railways Board v Secretary of State for the Environment [1993] 3 PLR 125, [1994] 02 EG 107, [1994] JPL 32, (1994) 158 LG Rev 661, [1993] EG 175 (CS), [1993] NPC 140, HL������������������������������������������������������������������������������������������������������   32.13 Bromor Properties Ltd’s Application, Re (1995) 70 P & CR 569, LT������������������������   8.22; 16.113, 16.116, 16.117; 20.26, 20.58, 20.61 Broomheads’ Application (2003) LP/7/2001�������������������������������������������������������������������������   23.53 Brotherton, Re (1908) 77 LJ Ch 58������������������������������������������������������������������������������  16.21, 16.23 Brown v Heathlands Mental Health National Health Service Trust [1996] 1 All ER 133, (1996) 31 BMLR 57, Ch D������������������������������������������������������������������������  10.34, 10.49, 10.64 Brown v Inskip (1884) Cab & El 231������������������������������������������������������������������������������������  8.22 Brown’s Application, Re (1978) 35 P & CR 254, [1977] JPL 731, LT������������������������   16.28; 22.2, 22.16, 22.17; 23.52 Brunner v Greenslade [1971] Ch 993, [1970] 3 WLR 891, [1970] 3 All ER 833, (1971) 22 P & CR 54, (1970) 114 SJ 787, Ch D���������   1.26; 3.1; 6.58; 8.10, 8.15, 8.22, 8.49, 8.82, 8.111, 8.119, 8.126; 15.24, 15.25 Bryant Homes Southern Ltd v Stein Management Ltd [2016] EWHC 2435 (Ch), [2017] 1 P & CR 6, Ch D�����������������������������������������������������������������������������������������������  1.49 Buckle v Fredericks (1890) 44 Ch D 244, CA����������������������������������������������������������  11.137, 11.179 Buckle v Mitchell, 34 ER 255, (1812) 18 Ves Jr 100, Ct of Chancery����������������������������������  30.6 Bushall’s Application, Re (1987) 54 P & CR 386, LT����������������������������������������   8.22; 20.26; 23.52 Button’s Lease, Re [1964] Ch 263, [1963] 3 WLR 903, [1963] 3 All ER 708, (1963) 107 SJ 830, Ch D ������������������������������������������������������������������������������������� Int; 6.98; 7.1

C

C & G Homes Ltd v Secretary of State for Health [1991] Ch 365, [1991] 2 WLR 715, [1991] 2 All ER 841, (1991) 23 HLR 145, (1991) 62 P & CR 69, [1991] 06 EG 170, [1990] EG 131 (CS), CA����������������������������������������������������  11.8, 11.9, 11.10, 11.133, 11.173, 11.196, 11.201, 11.210, 11.246

xxxvi

Table of Cases Cadbury v Woodward (No 2) (1972) 24 P & CR 335, (1972) 116 SJ 664, Ch D������������������   28.23 Cadogan & Hans Place Estate Ltd, ex p Willis, Re (1895) 73 LT 387����������������������������������  11.5 Caerns Motor Services Ltd v Texaco [1994] 1 WLR 1249, [1995] 1 All ER 247, [1994] 36 EG 141, Ch D����������������������������������������������������������������������������   1.56; 11.83; 16.33; 29.90, 29.98, 29.102 Cain’s Application, Re [2009] UKUT 212, LC���������������������������������������������������������������������  16.108 Cala Homes (South) Ltd v Carver [2003] EWHC 1995, Ch D��������������������������������  11.193, 11.227 Calabar Properties v Seagull Autos [1969] 1 Ch 451, [1968] 2 WLR 361, [1968] 1 All ER 1, (1968) 112 SJ 49, Ch D����������������������������������������������������������������������������������������������   29.19 Caldy Manor Estate v Farrell [1974] 1 WLR 1303, [1974] 3 All ER 753, (1975) 29 P & CR 238, (1974) 118 SJ 681, CA��������������������������������������������������������������������������������������  25.5, 25.7 Caledonian Associated Properties, Ltd v East Kilbride Development Corp (1985) 49 P & CR 410, [1985] JPL 264, LT������������������������������������������������������������������������������������   19.2; 22.4 Caledonian Rly Co v Walker’s Trustees (1882) 7 App Cas 259, (1882) 9 R (HL) 19, HL��������   10.79 Calgary & Edmonton Land Co Ltd v Dobinson [1974] Ch 102, [1974] 2 WLR 143, [1974] 1 All ER 484, (1973) 26 P & CR 516, (1973) 118 SJ 99, Ch D������������������������  9.39 Calthorpe Estate, Edgbaston, Birmingham, Re (1973) 26 P & CR 120, Ch D������������   16.43; 28.23 Campbell v Paddington Corpn [1911] 1 KB 869, KBD��������������������������������������������������������   11.31 Campbell’s Application, Re (1958) 9 P & CR 425, LT�����������������������   8.99; 16.110, 16.135; 22.16 Camstead Limited’s Application, Re (2004) LP/26/2003������������������������������������������������������   19.10 Canas Property Co v KL Television Services [1970] 2 QB 433, [1970] 2 WLR 1133, [1970] 2 All ER 795, (1970) 21 P & CR 601, (1970) 114 SJ 337, CA�������������������������   29.19 Caney v Leith [1937] 2 All ER 532, Ch D�����������������������������������������������������������������������������  11.164 Cannon v Hartley [1949] Ch 213, [1949] 1 All ER 50, 65 TLR 63, [1949] LJR 370, (1948) 92 SJ 719, Ch D��������������������������������������������������������������������   3.12; 32.46, 32.51, 32.68 Cantrell v Wycombe DC [2008] EWCA Civ 866; [2009] PTSR 96, [2009] HLR 14, [2009] 1 P & CR 12, [2008] 3 EGLR 93, [2008] 41 EG 158, [2008] 32 EG 82 (CS), [2009] 1 P & CR DG4, CA�����������������������������������������������������������������������������   9.1; 10.7, 10.11 Canwell Estate Co Ltd v Smith Brothers Farms Ltd [2012] EWCA Civ 237, [2012] 1 WLR 2626, [2012] 2 All ER 1159, [2012] 1 P & CR 19, CA�������������������������������������������������  29.9 Capital & Suburban Properties Ltd v Swycher [1976] Ch 319, [1976] 2 WLR 822, [1976] 1 All ER 881, (1976) 32 P & CR 101, [1976] JPL 374, (1976) 120 SJ 251, CA��������  30.19 Caradon DC v Paton (2001) 33 HLR 34, [2000] 3 EGLR 57, [2000] 35 EG 132, [2000] EG 59 (CS), (2000) 97(22) LSG 44, CA������������������������������������������������������������  11.210 Carbury 2000’s Application (2006) LP/84/2004��������������������������������������   1.10; 16.35, 16.36; 20.84 Carnegie v Waugh (1823) 2 Dow & Ry KB 277����������������������������������������������������������������  Int; 26.1 Carpenters Estates Ltd v Davies [1940] Ch 160, [1940] 1 All ER 13, Ch D����������   25.3; 30.7, 30.8 Carr-Saunders v Dick McNeil Associates Ltd [1986] 1 WLR 922, [1986] 2 All ER 888, (1987) 53 P & CR 14, [1986] 2 EGLR 181, (1986) 279 EG 1359, (1986) 83 LSG 2331, (1986) 130 SJ 525, Ch D��������������������������������������������������������������������������������������  11.132 Carter v Williams (1870) LR 9 Eq 678, Ct of Chancery������������������������������������������   1.10; 9.8, 9.20 Carter’s Application, Re (1973) 25 P & CR 542, LT�������������������������������������   16.138; 20.26, 20.42, 20.84, 20.88; 23.16 Cator v Newton [1940] 1 KB 415, [1939] 4 All ER 457, CA���������������������������������   6.92; 25.3; 27.6 Catt v Tourle (1868–69) LR 4 Ch App 654, CA������������������������������������������������������������   1.10; 30.27 Cave v Horsell [1912] 3 KB 533, CA�����������������������������������������������������������������������  11.112, 11.115 Cayne v Global Natural Resources Plc [1984] 1 All ER 225, CA���������������������  13.63, 13.64, 13.66 Celsteel Ltd v Alton House Holdings Ltd [1986] 1 WLR 512, [1986] 1 All ER 608, (1986) 83 LSG 700, (1986) 130 SJ 204, CA�����������������������������������������������������������������   8.122 CH Giles & Co Ltd v Morris [1972] 1 WLR 307, [1972] 1 All ER 960, (1971) 116 SJ 176, Ch D�������������������������������������������������������������������������������������������������������������������������������  30.5 Chamber Colliery Co Ltd v Twyerould [1915] 1 Ch 268 (Note), HL�����������������������������������   29.74 Chamberlayne v Collins (1894) 70 LT 217, CA��������������������������������������������������������������������  11.149 Chambers v Randall [1923] 1 Ch 149, Ch D�������������������������������������������������������������  7.8, 7.11, 7.43 Chapman Morsons & Co v Guardians of Auckland Union (1889) 23 QBD 294, CA�����������   30.21 Chapman, Re (1885) 29 Ch. D. 1007, Ch D��������������������������������������������������������������������������  29.101 Chapman v Michaelson [1909] 1 Ch 238, CA�����������������������������������������������������������������������   13.11 Chapman’s Application, Re (1981) 42 P & CR 114, [1981] JPL 520, LT������   16.108; 22.16; 23.52 Charrington v Simons & Co Ltd [1971] 1 WLR 598, [1971] 2 All ER 588, (1971) 22 P & CR 558; (1971) 115 SJ 265, CA�����������������������������������������������������������������������������   13.42 Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101, [2009] 3 WLR 267, [2009] 4 All ER 677, [2010] 1 All ER (Comm) 365, [2009] Bus LR 1200, [2009] BLR 551, 125 Con LR 1, [2010] 1 P & CR 9, [2009] 3 EGLR 119, [2009] CILL 2729, [2009] 27 EG 91 (CS), (2009) 153(26) SJLB 27, [2009] NPC 87, [2009] NPC 86, HL�������������������������������������������������������������������������������������������������������������������   11.11

xxxvii

Table of Cases Chatham BC’s Application, Re (1970) 21 P & CR 661, [1969] JPL 280, LT�����������������������   16.29 Chatsworth Estates Co v Fewell [1931] 1 Ch 224, (1957) 7 P & CR 284, Ch D�������   8.22; 11.229; 13.123, 13.144, 13.164, 13.168, 13.169, 13.180 Chaumel’s Application, Re (1957) 7 P & CR 75, LT��������������������������������������������������   17.15; 19.43 Chelsea and Walham Green Building Society v Armstrong [1951] Ch 853, [1951] 2 All ER 250, [1951] 2 TLR 313, Ch D ����������������������������������������������������������������������������� Int; 3.4; 26.1 Chelsea Yacht & Boat Co Ltd v Pope [2000] 1 WLR 1941, [2001] 2 All ER 409, (2001) 33 HLR 25, [2000] L & TR 401, [2000] 2 EGLR 23, [2000] 22 EG 139, (2000) 80 P & CR D36, CA�������������������������������������������������������������������������������������������������������������������  11.199 Chesterfield & Midland Silkstone Colliery Co. v Hawkins, 159 ER 698, (1865) 3 Hurl & C 678 Ct of Exchequer���������������������������������������������������������������������������������������������������  26.1 Child Bros Application, Re (1959) 10 P & CR 71, LT���������������������������������������������   16.135; 17.21; 21.9, 21.12 Child v Douglas, 69 ER 237, 43 ER 1057, (1854) 5 De GM & G 739, (1854) Kay 560, Ct of Chancery���������������������������������������������������������������������������������������������������������������    6.1 Chitty v Bray (1883) 48 LT 860��������������������������������������������������������������������������������  13.141, 13.163 Chojecki’s Application, Re (2005) LP/32/2003���������������������������������������������������������������������   20.84 Chudleigh’s Case sub nom Dillon v Freine (1595) 1 Co Rep 120���������������������������������   1.56; 27.14 Churchill v Temple [2010] EWHC 3369 (Ch), [2011] 1 EGLR 73, [2011] 17 EG 72, Ch D��������������������������������������������������������������������������������������������������������  11.87, 11.95, 11.101, 11.103, 11.108, 11.165 City Inn (Jersey) Ltd v Ten Trinity Square Ltd [2008] EWCA Civ 156, [2008] 10 EG 167 (CS),; [2008] NPC 28, [2008] 1 P & CR DG22, CA���������������������  11.92, 11.93, 11.94, 11.95, 11.98, 11.99 City of London Building Society v Flegg [1988] AC 54, [1987] 2 WLR 1266, [1987] 3 All ER 435, [1988] 1 FLR 98, (1987) 19 HLR 484, (1987) 54 P & CR 337, [1988] Fam Law 17, (1987) 84 LSG 1966, (1987) 137 NLJ 475, (1987) 131 SJ 806, HL�������   10.29 City of London Corpn v Fell [1994] 1 AC 458, [1993] 3 WLR 1164, [1993] 4 All ER 968, 92 LGR 1, (1995) 69 P & CR 461, [1993] 49 EG 113, (1994) 91(4) LSG 44, (1993) 143 NLJ 1747, (1994) 138 SJLB 13, [1993] NPC 162, HL�������������������������������  1.51 City of Westminster v Duke of Westminster [1994] 24 HLR 572, CA����������������������������������  9.59 City Permanent Building Society v Miller [1952] Ch 840, [1952] 2 All ER 621, [1952] 2 TLR 547, CA��������������������������������������������������������������������������������������������������������������  9.40 Civil Service Cooperative Society Ltd v McGrigor’s Trustee [1923] 2 Ch 347, Ch D���������   29.16 Clark v School Board for London (1874) 9 Ch App 120, CA�����������������������������������������������   10.37 Clarke, Applicants [2015] UKUT 44, LC������������������������������������������������������������������   16.108; 20.26 Clavering v Ellison, 11 ER 282, (1859) 7 HL Cas 707, Ct of QB�����������������������������������������  29.4 Clearbrook Property Holdings Ltd v Verrier [1974] 1 WLR 243, [1973] 3 All ER 614, (1974) 27 P & CR 430, (1974) 118 SJ 117, Ch D���������������������������������������������������������   13.58 Clearwater Properties Ltd, Re [2013] UKUT 210, LC������������������������������   21.9, 21.10, 21.15; 23.8 Cleaver v Bacon (1887) 4 TLR 27�����������������������������������������������������������������������������������������  11.239 Cleeve v Mahany (1861) 9 WR 882���������������������������������������������������������������������������������������  11.239 Clements v Welles (1865–66) LR 1 Eq 200, Ct of Chancery������������������������������������������������  9.71 Clore v Theatrical Properties Ltd [1936] 3 All ER 483 ��������������������������������������������������������    Int Coastal Partnerships Ltd v Beddy [2007] EWHC 387 (Ch), Ch D��������������������������  11.195, 11.227 Cobb v Lane [1952] 1 All ER 1199, [1952] 1 TLR 1037, [1952] WN 196, (1952) 96 SJ 295, CA���������������������������������������������������������������������������������������������������������������������  1.51 Coldman’s Application, Re [2012] UKUT 6 (LC), [2012] JPL 749, LC���������������������   16.53; 20.26 Coles’ Application (2004) LP/2/2003������������������������������������������������������������������������������������   20.84 Coles v Sims, 43 ER 768, (1854) 5 De GM & G 1, Ct of Chancery�����������������   1.16; 8.5, 8.9, 8.50 Collett’s Application, Re (1964) 15 P & CR 106, [1963] JPL 613, LT������������   20.26, 20.42; 22.16 Collins v Castle (1887) 36 Ch D 243, Ch D����������������������������������������������   8.5; 13.37, 13.39, 13.51 Collins v Plumb, 33 ER 1057, (1810) 16 Ves Jr 454, Ct of Chancery�����������������������������������  1.51 Collins’s Applications, Re (1975) 30 P & CR 527, [1975] JPL 224, LT���������������������  16.72, 16.74, 16.76, 16.78, 16.81; 20.26, 20.35, 20.43, 20.55, 20.61, 20.70 Colls v Home & Colonial Stores Ltd [1904] AC 179, HL�����������������������������������������������������   13.96 Colyear v Countess of Mulgrave, 48 ER 559, (1836) 2 Keen 81, Ct of Chancery����������������  26.1 Congleton Corpn v Pattison, 103 ER 725, (1808) 10 East 130, Ct of KB������������������������  1.25, 1.26 Cooke v Chilcott (1876) 3 Ch D 694, Ch D������������������������������������������������   28.5, 28.7; 30.6, 30.27 Cooker v Child, 83 ER 456, (1671) 2 Lev 74, Ct of KB����������������������������������������������������  Int; 26.1 Coombes‘ Application, Re [2012] UKUT 112 (LC), [2013] RVR 79, LC����������������������������   19.55 Coombs v Cook (1883) Cab & El 75�����������������������������������������������������������  11.137, 11.243, 11.249

xxxviii

Table of Cases Cooperative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1996] Ch 286, [1996] 3 WLR 27, [1996] 3 All ER 934, (1996) 72 P & CR 130, [1996] 1 EGLR 71, [1996] 09 EG 128, [1995] NPC 199, CA���������������������������������������������������������������������������������������  30.5 Cooperative Insurance Society Ltd v Argyll Stores (Holdings) Ltd [1998] AC 1, [1997] 2 WLR 898, [1997] 3 All ER 297, [1997] CLC 1114, [1997] 1 EGLR 52, [1997] 23 EG 141, [1997] EG 81 (CS), (1997) 94(26) LSG 30, (1997) 147 NLJ 845, (1997) 141 SJLB 131, [1997] NPC 79, HL�����������������������������������������������������������������������������  13.45, 13.65 Cooperative Retail Services Ltd v Tesco Stores Ltd (1998) 76 P & CR 328, [1998] EG 5 (CS), [1998] NPC 5, (1998) 75 P & CR D46, CA���������������������  11.123, 11.188, 11.236 Coparcener’s Case (undated) YB 42 Edw 3���������������������������������������������������������������������������  27.6 Cordwell’s Application, Re (2008) LP/40/2006�����������������������������������������������������������  20.26, 20.34 Cordwell, Re [2008] 2 P & CR 26, LT����������������������������������������������������������������������������������  16.113 Cornick’s Application, Re (1994) 68 P & CR 372, LT����������������������������������������  21.8, 23.53, 23.54 Cornish v Brook Green Laundry [1959] 1 QB 394, [1959] 2 WLR 215, [1959] 1 All ER 373, CA��������������������������������������������������������������������������������������������������������������������������  30.5 Coronation Street Industrial Properties v Ingall Industries plc [1989] 1 WLR 304, [1989] 1 All ER 979, (1990) 59 P & CR 8, [1989] 24 EG 125, [1989] EG 44 (CS), (1989) 86(14) LSG 46, (1989) 139 NLJ 400, (1989) 133 SJ 455, HL��������������������������������������  1.27 Cosmichome Ltd v Southampton City Council [2013] EWHC 1378 (Ch), [2013] 1 WLR 2436, [2013] 2 P & CR 13, [2014] 1 EGLR 171, Ch D�����������   1.48, 1.49; 16.41; 32.40 Coulsdon and Purley Urban DC’s Application, Re (1957) 7 P & CR 16, LT������������������������   16.26 Coventry School Foundation Trustees v Whitehouse [2013] EWCA Civ 885, [2014] 1 P & CR 4, [2013] 3 EGLR 85, [2013] 2 P & CR DG24, CA�����������������������������������   11.130; 14.11 Cowderoy’s Application, Re (1957) 7 P & CR 184, 166 EG 225, [1955] JPL 759, LT��������  16.135 Cox & Neve’s Contract, Re [1891] 2 Ch 109, Ch D��������������������������������������������������������������   8.104 Cox’s Application, Re (1986) 51 P & CR 335, [1985] JPL 564, LT���������������������������  16.74, 16.76, 16.80,16.138; 17.1, 17.12; 19.51 Crampton v Varna Railway Co (1871–72) LR 7 Ch App 562�����������������������������������������������  30.5 Crawley v Wolff (1888) 4 TLR 434�������������������������������������������������������   11.31, 11.75, 11.154; 25.4 Cresswell v Proctor [1968] 1 WLR 906, [1968] 2 All ER 682, (1968) 19 P & CR 516, (1968) 112 SJ 420, CA��������������������������������������������������������  16.61, 16.65, 16.83, 16.85, 16.86, 16.89, 16.118; 24.107, 24.109 Crest Homes plc’s Application, Re (1983) 48 P & CR 309���������������������������������������������   1.70; 11.3 Crest Nicholson Residential (South) Ltd v McAllister [2004] EWCA Civ 410, [2004] 1 WLR 2409, [2004] 2 All ER 991, [2004] 2 P & CR 26, [2004] 2 EGLR 79, [2004] 24 EG 150, [2004] 15 EG 105 (CS), (2004) 148 SJLB 420, [2004] NPC 54, CA���������������������������������������������������������������   6.36, 6.43, 6.80, 6.81, 6.86, 6.87; 7.38, 7.40; 11.22, 11.26, 11.83, 11.86, 11.87, 11.88, 11.95, 11.104, 11.109, 11.110, 11.194, 11.197, 11.215, 11.216; 27.10, 27.11; 33.9 Crestfort Ltd v Tesco Stores Ltd [2005] EWHC 805 (Ch), [2005] L & TR 20, [2005] 3 EGLR 25, [2005] 37 EG 148, [2005] NPC 74, Ch D����������������������������������������������������  25.7 Croft (Bickershaw) Ltd’s Application, Re [2017] UKUT 339, LC���������������������������������������   16.27 Croft v London & County Banking Co (1885) 14 QBD 347, CA��������������������������������  29.26, 29.30 Crow v Wood [1971] 1 QB 77, [1970] 3 WLR 516, [1970] 3 All ER 425, (1970) 21 P & CR 929, (1970) 114 SJ 474, CA����������������������������������������������������������������������   1.8; 29.114, 29.115 Crowe & Heaton’s Application, Re (2008) LP/34/2006��������������������������������������������������������  24.138 Cryer v Scott Bros (Sunbury) Ltd (1986) 55 P & CR 183, CA��������������������   1.37, 1.43, 1.52; 8.22; 11.106, 11.107, 11.146, 11.147, 11.162, 11.164, 11.167, 11.169; 13.12; 15.20, 15.22; 16.108 Cutting v Derby, 96 ER 633, (1776) 2 Wm Bl 1075, Ct of KB���������������������������������������������   29.15 Cygnet Healthcare Ltd v Greenswan Consultants Ltd [2009] EWHC 1318 (Ch), Ch D������  9.62

D

Da Costa, Re; sub nom Clarke v Church of England Collegiate School of St Peter [1912] 1 Ch. 337, Ch D����������������������������������������������������������������������������������������������������������������  29.4 Da Costa’s Application, Re (1986) 52 P & CR 99, [1986] JPL 297, LT������������������������   6.41, 6.91; 16.5; 20.40, 20.84 Dakins v Antrobus (1881) 17 Ch D 615, Ch D��������������������������������������������������������������������  11.35 Dano v Earl Cadogan [2003] EWHC 239 (Ch), [2003] HLR 51, [2003] 2 P & CR 10, [2003] 12 EG 128 (CS), [2003] NPC 26, Ch D�����������������������������������������������  1.27, 1.34, 1.37 Dare’s and Beck’s Application, Re (1974) 28 P & CR 354, LT������������������������  21.12, 21.17, 21.22 Dartmouths’ Application (2006) LP/64/2004������������������������������������������   23.3; 24.28, 24.29, 24.30

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Table of Cases Dartstone Ltd v Cleveland Petroleum Co Ltd [1969] 1 WLR 1807, [1969] 3 All ER 668, (1969) 20 P & CR 795, (1969) 113 SJ 626, Ch D����������������������� Int; 9.26; 16.16; 25.9; 28.13 Davie’s Application, Re [2006] UKUT 462, LC�������������������������������������������������������������������  16.108 Davies’ Application, Re (2006) LP/65/2006�������������������������������������������������������  20.6, 20.32, 20.33 Davies’ Application, Re (2000) LP/34/1999�������������������������������������������������������������������������   23.54 Davies, Re (1973) 25 P & CR 115, LT���������������������������������������������������   11.158; 19.5, 20.9, 20.26, 20.58, 20.61; 22.16 Davies v Gas Light & Coke Co [1909] 1 Ch 708, CA�����������������������������������������������������������   30.28 Davies v Jones [2009] EWCA Civ 1164, [2010] 2 All ER (Comm) 755, [2010] 1 P & CR 22, [2010] 1 EGLR 67, [2010] 5 EG 114, [2009] 46 EG 142 (CS), [2009] NPC 126, CA�����������������������������������������������������������������������������������������������������������������   29.82 Davies v Marshall (1861) 31 LJCP 61�����������������������������������������������������������������������������������   13.49 Davis v Leicester Corpn [1894] 2 Ch 208, CA����������������������������������������   1.65; 8.22; 11.156; 15.13 Davis’s Application, Re (1957) 7 P & CR 172, LT����������������������������������������������   17.23; 19.8, 19.9, 19.15, 19.19, 19.22 Dawes v Tredwell (1881) 18 Ch D 354, CA��������������������������������������������������������������������������  26.3 Day v Hosebay Ltd [2012] UKSC 41, [2012] 1 WLR 2884, [2012] 4 All ER 1347, [2012] HLR 48, [2013] 1 P & CR 9, [2013] L & TR 3, [2012] 3 EGLR 33, [2012] 43 EG 116, [2012] RVR 359, [2012] 42 EG 132 (CS), (2012) 156(39) SJLB 31, SC���������������������  11.198 Day v Waldron (1919) 120 LT 634, (1919) 88 LJKB 937����������������������������������������  11.121, 11.202 De Brassac v Martyn (1863) 2 New Rep 512������������������������������������������������������������������������   30.19 De Mattos v Gibson, 45 ER 108, (1859) 4 De G & J 276, Ct of QB ������������������������������������    Int Dean v Freeborn [2017] UKUT 203, LC�������������������������������������������������������������������   16.108; 22.11 Deans’ Application, Re. See Dean v Freeborn Deerfield Travel Services v Wardens and Society of the Mistery or Art of the Leather Sellers of the City of London (1983) 46 P & CR 132, CA��������������������������������������������   16.54 Defries v Milne [1913] 1 Ch 98, CA�������������������������������������������������������������������������������������   11.57 Dendy v Evans [1910] 1 KB 263, CA�����������������������������������������������������������������������������������  16.5 Dennis v Davies [2009] EWCA Civ 1081, [2010] 1 EGLR 81, [2010] 3 EG 104, (2009) 153(41) SJLB 30, [2009] NPC 117, [2010] 1 P & CR DG13, CA�������  11.135, 11.136 Denton v TH White Ltd [2014] EWCA Civ 906, [2014] 1 WLR 3926, [2015] 1 All ER 880, [2014] CP Rep 40, [2014] BLR 547, 154 Con LR 1, [2014] 4 Costs LR 752, [2014] CILL 3568, (2014) 164(7614) NLJ 17, CA�������������������������������������������������������������������   24.66 Derby Motor Cab Co v Crompton and Evans Union Bank (1913) 29 TLR 673�������������������  11.114 Derreb Ltd v Blackheath Cator Estate Residents Ltd [2017] UKUT 209, LC����������������������  18.5 Derreb Ltd v White [2015] UKUT 667, LC��������������������������������������������������������������������������   24.48 Derwent Holdings Ltd v Trafford BC [2011] EWCA Civ 832, [2011] NPC 78, CA������������������������������������������������������������������������������������������������������  32.23, 32.24 Dilieto v Ealing LBC [2000] QB 381, [1998] 3 WLR 1403, [1998] 2 All ER 885, [1998] 2 PLR 98, [1998] PLCR 212, DC�����������������������������������������������������������������������������������  32.15 Direct Travel Insurance v McGeown [2003] EWCA Civ 1606, [2004] 1 All ER (Comm) 609, [2004] Lloyd’s Rep IR 599, (2003) 147 SJLB 1365, CA������������������������������������  11.21 Dobbin v Redpath [2007] EWCA Civ 570, [2007] 4 All ER 465, (2007) 104(20) LSG 29, CA����������������������������������������������������������������������������������������������������������������������   16.117; 20.26 Dobbin’s Application, Re (2006) LP/ LP/59/2004����������������������������������������������������������������   20.26 Dobbs v Linford [1953] 1 QB 48, [1952] 2 All ER 827, [1952] 2 TLR 727, (1952) 96 SJ 763, CA���������������������������������������������������������������������������������������������������  11.110, 11.197 Doberman v Watson [2017] EWHC 1708 (Ch), [2017] 4 WLR 103, [2017] HLR 41, Ch D��������������������������������������������������������������������������������������������������������������������   13.12; 16.27; 24.34, 24.37 Doe d Ambler v Woodbridge, 109 ER 140, (1829) 9 B & C 376, Ct of KB�������������������������   11.71 Doe d Anglesea v Rugeley (Churchwardens) 115 ER 41, (1844) 6 QB 107, Ct of QB���������������������������������������������������������������������������������������������������������������   11.62; 15.26 Doe d Biass v Horsley, 110 ER 1400, (1834) 1 Ad & El 766 Ct of KB��������������������������������   29.15 Doe d Bish v Keeling, 105 ER 36, (1813) 1 M & S 95, Ct of KB�����������������������������������������  11.246 Doe d Flower v Peck, 109 ER 847, (1830) 1 B & Ad 428, Ct of KB������������������������������������   11.71 Doe d Freeman v Bateman, 106 ER 328, (1818) 2 B & Ald 168, Ct of KB��������������������������  29.4 Doe d Gaskell v Spry, 106 ER 227, (1818) 1 B & Ald 617, Ct of KB����������������������������������  11.250 Doe d Harris v Masters, 107 ER 466, (1824) 2 B & C 490, Ct of KB����������������������������������   29.26 Doe d Lambert v Roe (1835) 3 Dowl 557�����������������������������������������������������������������������������   29.25 Doe d MacKenzie v Baylis (1851) 17 LTOS 172 ����������������������������������������������������  11.229, 11.245 Doe d Mence v Hadley (1849) 14 LTOS 102������������������������������������������������������������������������   30.31 Doe d Palk, Bart v Marchetti, 109 ER 953, (1831) 1 B & Ad 715, Ct of KB�����������������������  11.121 Doe d Wetherell v Bird, 111 ER 63, (1834) 2 Ad & El 161, Ct of KB��������  11.173, 11.239, 11.250

xl

Table of Cases Doherty v Allman (1878) 3 App Cas 709, HL������������������   1.20; 10.86; 13.31, 13.32, 13.36, 13.39, 13.43, 13.47, 13.48, 13.52, 13.83 Doig’s Application, Re (1981) 41 P & CR 261, [1980] JPL 687, LT��������������������������  20.26, 20.84, 20.88; 23.26 Doloughan’s Application, Re (1957) 7 P & CR 46, LT���������������������������������������������������������  19.7 Dolphin Maritime & Aviation Services Ltd v Sveriges Angfarygs Forening [2009] EWHC 716 (Comm), [2010] 1 All ER (Comm) 473, [2009] 2 Lloyd’s Rep 123, [2009] 1 CLC 460, [2009] ILPr 52, QBD���������������������������������������������������������������������������������������������  3.10 Dolphin’s Conveyance, Re [1970] Ch 654, [1970] 3 WLR 31, [1970] 2 All ER 664, (1970) 21 P & CR 511, (1970) 114 SJ 266, Ch D���������������������������������������������  8.43, 8.49, 8.53, 8.58, 8.71, 8.80, 8.81; 14.33 Dove’s Application, Re, LP/28/1990�������������������������������������������������������������������������������������   23.54 Downie v Turner [1951] 2 KB 112, [1951] 1 All ER 416, [1951] 1 TLR 217, (1951) 95 SJ 60, CA������������������������������������������������������������������������������������������������������������������  11.110 Dowsett Land Investments Application, Re (1960) 11 P & CR 394, LT�������������������������������  21.8 Dr Barnardo’s Homes National Inc Association’s Application, Re (1957) 7 P & CR 176, 166 EG 29, [1955] JPL 603, 105 LJ 460, LT�����������������������������������������������������������������   19.25 Drake v Gray [1936] Ch 451, CA������������������������������������������������������������������  6.12, 6.13, 6.18, 6.53, 6.57, 6.66, 6.67, 6.68 Dransfield’s Application, Re (1976) 31 P & CR 192, [1975] JPL 539, LT������   16.96; 20.84; 23.24 Dreyfus v Peruvian Guano Co (1889) 43 Ch D 316, CA������������������������������������������������������   30.21 Driscoll v Church Comrs for England [1957] 1 QB 330, [1956] 3 WLR 996, [1956] 3 All ER 802, (1957) 7 P & CR 371, (1956) 100 SJ 872, CA�������������������   1.29; 16.5, 16.56, 16.60; 19.34, 19.35, 19.39; 24.107 Drive Yourself Hire Co (London) Ltd v Strutt [1954] 1 QB 250, [1953] 3 WLR 1111, [1953] 2 All ER 1475, (1953) 97 SJ 874, CA������������������������������������������������������ Int; 3.4; 26.1 Dublin, Earl of Pembroke v Warren [1896] 1 IR 76��������������������������������������������������������������  11.239 Duffields’ Application, Re (2007) LP/36/2006����������������������������������������������������������������������   20.26 Dugdale, Re (1888) 38 Ch D 176, Ch D��������������������������������������������������������������������������������  29.4 Duke of Bedford v British Museum Trustees, 39 ER 1055, (1822) 2 My & K 552, Ct of Chancery���������������������������������������������������������������������������������������������   1.3, 1.10; 13.165, 13.166; 16.53; 30.6 Duke of Devonshire v Brookshaw (1899) 81 LT 83���������������������������������������������������  11.32, 11.239 Duke of Devonshire v Simmons (1894) 11 TLR 52�������������������������������������������������  11.137, 11.233 Duke of Leeds v Amherst, 41 ER 886, (1846) 10 Jur 956, (1846) 2 Ph 117, (1846) 16 LJ Ch. 5, Ct of Chancery������������������������������������������������������������������  13.120, 13.147 Duke of Northumberland v Bowman (1887) 56 LT 773��������������������������������������������������������  13.139 Duke of Westminster v Guild [1985] QB 688, [1984] 3 WLR 630, [1984] 3 All ER 144, (1984) 48 P & CR 42, (1983) 267 EG 762, (1984) 128 SJ 581, CA�����������������������������   11.26 Duke of Westminster v Swinton [1948] 1 KB 524, [1948] 1 All ER 248, (1948) 92 SJ 97, KBD�������������������������������������������������������������������������������������������������������������������������������   29.30 Dulwich College Estate’s Application, Re (1973) 231 EG 845���������������������������������������������   28.23 Dunn v Blackdown Properties [1961] Ch 433, [1961] 2 WLR 618, [1961] 2 All ER 62, (1961) 125 JP 397, (1961) 105 SJ 257, Ch D����������������������������������������������������������������   29.62 Dunn v Flood (1885) 28 Ch D 586, CA��������������������������������������������������������������������������  29.4, 29.36 Duppa v Mayho (1669) 1 Wms Saund 275����������������������������������������������������������������������������   29.15 Dutton v Poole, 83 ER 523, (1677) 2 Lev 210, Ct of KB������������������������������������������������������    Int Dyson v Foster [1909] AC 98, HL����������������������������������������������������������������������������   1.51, 1.57; 3.4

E

E & GC Ltd v Bate (1935) 79 L Jo 203���������������������������������������������������������������������������������  28.8 Eagle v Charing Cross Rly Co (1867) LR 2 CP 637, Ct of Common Pleas��������������������������   10.86 Eagling v Gardner [1970] 2 All ER 838, (1970) 21 P & CR 723, (1970) 114 SJ 531, Ch D���������������������������������������������������������������������������������������������������������������   1.45; 8.68, 8.70, 8.75, 8.78, 8.86 Earl of Cadogan v Guinness [1936] Ch 515, [1936] 2 All ER 29, [2008] BTC 7107, Ch D����������������������������������������������������������������������������������������������������������������������  16.12, 16.14 Earl of Leicester v Wells-next-to-the-Sea UDC [1973] Ch 110, [1972] 3 WLR 486, [1972] 3 All ER 77, (1972) 24 P & CR 72, (1972) 116 SJ 647, Ch D�����������  1.26, 1.37, 1.41, 1.51, 1.52, 1.66; 7.8, 7.12, 7.14; 10.61; 11.61 Earl of Sefton v Tophams Ltd (No.2) [1965] Ch 1140, [1965] WLR 523, [1965] 3 All ER 1, (1965) 109 SJ 456, CA����������������������������������������������������������������������  13.83, 13.86 Earl of Zetland v Hislop (1882) 7 App Cas 427, (1882) 9 R (HL) 40, HL������������������   8.22; 13.163

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Table of Cases Easterby v Sampson, 130 ER 1429, (1830) 6 Bing 644, Ct of Comm Pleas�������������������������  29.102 Eastleigh BC v Town Quay Developments Ltd [2009] EWCA Civ 1391, [2010] 2 P & CR 2, CA������������������������������������������������������������������������������������������������������������������������������  11.166 Eastwood v Lever, 46 ER 859, (1863) 4 De GJ & S 114, Ct of Chancery����������������   4.2, 4.7; 7.12; 13.78, 13.101 Ecclesiastical Comrs for England’s Conveyance, Re [1936] Ch 430, (1957) 7 P & CR 298, Ch D���������������������������������������������������������������������������������������������������������������   3.4; 6.9; 11.116; 14.20; 26.4, 26.7 Edward’s Application, Re (1984) 47 P & CR 458, 194 EG 965, [1965] JPL 441, LT������   20.84; 23.27 Edwards Application, Re (1960) 11 P & CR 403, CA�����������������������������������������������   11.36; 24.107 Edler v Auerbach [1950] 1 KB 359, [1949] 2 All ER 692, 65 TLR 645, (1949–51) 1 P & CR 10, (1949) 93 SJ 727, KBD���������������������������������������������������������������������������   19.53 Egerton v Brownlow, 10 ER 359, (1853) 4 HL Cas 1, Ct of QB�������������������������������������������  29.4 Egerton v Harding [1975] QB 62, [1974] 3 WLR 437, [1974] 3 All ER 689, (1974) 28 P & CR 369, (1974) 118 SJ 565, CA������������������������������������������������������������������������������������  29.113 Elaen & Co’s Application, Re (1963) 14 P & CR 230, [1963] JPL 193, LT�������������������������   16.45 Ellenborough Park, Re [1956] Ch 131, [1955] 3 WLR 892, [1955] 3 All ER 667, (1955) 99 SJ 870, CA����������������������������������������������������������������������������������������������������������������  11.230 Elliman Sons & Co v Carrington & Son Ltd [1901] 2 Ch 275, Ch D�����������������������������������    Int Elliott v Pierson [1948] Ch 452, [1948] 1 All ER 939, [1948] LJR 1452, (1948) 92 SJ 271, Ch D�������������������������������������������������������������������������������������������������������������������������������  29.110 Elliott v Safeway Stores Plc [1995] 1 WLR 1396, Ch D������������������������������   11.179, 11.185; 14.11 Ellis v Rogers (1884) 29 Ch D 661, CA�����������������������������������������������������������������������  10.32, 10.33 Ellis v Torrington [1920] 1 KB 399, CA�������������������������������������������������������������������������������   11.57 Elliston v Reacher [1908] 2 Ch 374, Ch D��������������������������   3.1; 8.10, 8.11, 8.18, 8.23, 8.47, 8.50, 8.52, 8.55, 8.56, 8.78, 8.91, 8.95; 11.233; 13.50, 13.91, 13.143; 15.25; 33.11 Emery’s Application, Re (1957) 8 P & CR 113, LT��������������������������������������������������   16.108; 22.16 EMI Social Centres Ltd’s Application, Re (1980) 39 P & CR 421, [1980] JPL 185, LT���������������������������������������������������������������������������������������������������������������   20.86; 22.17; 23.2, 23.13, 23.33, 23.42 Emile Elias & Co Ltd v Pine Groves Ltd [1993] 1 WLR 305, (1993) 66 P & CR 1, [1993] EG 31 (CS), (1993) 137 SJLB 52, [1993] NPC 30, PC (T&T)�������������  8.39, 8.46, 8.64, 8.79, 8.81, 8.83, 8.89; 11.6 Endericks’ Conveyance, Re [1973] 1 All ER 843, (1972) 25 P & CR 254������������������  11.8, 11.216 Engel v Fitch (1868–69) LR 4 QB 659, Ct of Exchequer�����������������������������������������������������   13.80 English v Emery Reimbold & Strick Ltd [2002] EWCA Civ 605, [2002] 1 WLR 2409, [2002] 3 All ER 385, [2002] CPLR 520, [2003] IRLR 710, [2002] UKHRR 957, (2002) 99(22) LSG 34, (2002) 152 NLJ 758, (2002) 146 SJLB 123, CA���������������������  24.101 Equity & Law Home Loans Ltd v Prestridge [1992] 1 WLR 137, [1992] 1 All ER 909, [1992] 1 FLR 485, [1992] 1 FCR 353, (1992) 24 HLR 76, (1992) 63 P & CR 403, [1992] Fam Law 288, (1992) 89(2) LSG 31, [1991] NPC 103, CA������������������������������   15.10 ER Ives Investment Ltd v High [1967] 2 QB 379, [1967] 2 WLR 789, [1967] 1 All ER 504, (1966) 110 SJ 963, CA������������������������������������������������������������������������������   8.117, 8.122; 29.72 Errington v Birt (1911) 105 LT 373���������������������������������������������������������������������������������������  11.132 Escritt’s Application, Re (1957) 7 P & CR 134, 164 EG 576, [1954] JPL 883, LT��������������   19.15 Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd [1968] AC 269, [1967] 2 WLR 871, [1967] 1 All ER 699, (1967) 111 SJ 174, HL��������������������������������������  12.1, 12.2 Esso Petroleum Co Ltd v Kingswood Motors (Addlestone) Ltd [1974] QB 142, [1973] 3 WLR 780, [1973] 3 All ER 1057, [1973] CMLR 665, (1973) 117 SJ 852, QBD���������   29.94 Ethel & Mitchells & Butlers’ Contract, Re [1901] 1 Ch 945, Ch D��������������������������������������   11.38 Eton College v Nassar [1991] 2 EGLR 271���������������������������������������������������������������������������   28.23 Evans v Clayhope Properties Ltd [1988] 1 WLR 358, [1988] 1 All ER 444, (1988) 4 BCC 27, [1988] BCLC 238, (1988) 20 HLR 176, [1988] 03 EG 95, (1988) 85(9) LSG 46, (1988) 132 SJ 302, CA���������������������������������������������������������������������������������������������������   30.20 Everett v Remington [1892] 3 Ch 148, Ch D��������������������������������������������������������������   1.42; 11.107 Expert Clothing Service & Sales Ltd v Hillgate House Ltd [1986] Ch 340, [1985] 3 WLR 359, [1985] 2 All ER 998, (1985) 50 P & CR 317, [1985] 2 EGLR 85, (1985) 275 EG 1011, (1985) 82 LSG 2010, (1985) 129 SJ 484, CA�����������������������������������������������������   29.16 Eyre v Landi [1865] The Times, 1 June���������������������������������������������������������������������������������  11.132

F

F & H Joyce’s Application, Re (1957) 7 P & CR 245, 167 EG 625, [1956] JPL 382, LT�������������������������������������������������������������������������������������������������������������  19.7, 19.15, 19.22 Fairclough Homes Ltd’s Application, Re (2004) LP/30/2001��������������������   20.23; 23.15; 24.133

xlii

Table of Cases Fairclough v Marshall (1878) 4 Ex D 37, CA�����������������������������������������������������������������������  1.51 Fairweather v St Marylebone Property Co Ltd [1963] AC 510, [1962] 2 WLR 1020, [1962] 2 All ER 288, (1962) 106 SJ 368, HL������������������������������������������������������������   1.51; 9.6; 10.13; 11.43; 32.61 Falgor Commercial SA v Alsabahia Inc (1986) 18 HLR 123, [1986] 1 EGLR 41, (1985) 277 EG 185, CA�������������������������������������������������������������������������������������������������  11.209 Farmiloe’s and Smith’s Application (1984) 48 P & CR 317, [1984] JPL 519, LT��������������������������������������������������������������������������������������������������������������������   16.103, 16.108; 22.9, 22.16; 23.52 Faruqi v English Real Estates Ltd [1979] 1 WLR 963, (1979) 38 P & CR 318, (1978) 251 EG 1285, (1979) 123 SJ 321, Ch D�������������������������������������������������������������������������������   16.49 Fawcett & Holmes Contract, Re (1889) 42 Ch D 150, CA������������������������������������   1.8, 1.56; 11.82 Fawcett Properties Ltd v Buckingham County Council [1961] AC 636, [1960] 3 WLR 831, [1960] 3 All ER 503, (1961) 125 JP 8, 59 LGR 69, (1961) 12 P & CR 1, (1960) 104 SJ 912, HL���������������������������������������������������������������������������������������������������������������������   11.36 Federated Homes Ltd v McAllister [2004] EWCA Civ 410, [2004] 1 WLR 2409, [2004] 2 All ER 991, [2004] 2 P & CR 26, [2004] 2 EGLR 79, [2004] 24 EG 150, [2004] 15 EG 105 (CS), (2004) 148 SJLB 420, [2004] NPC 54, CA�������������������������������������   1.26; 6.26, 6.35, 6.36, 6.37 Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594, [1980] 1 All ER 371, (1980) 39 P & CR 576, (1979) 254 EG 39, (1980) 124 SJ 412, CA��������������   1.44, 1.47; 6.5, 6.31, 6.32, 6.34, 6.42, 6.49, 6.55, 6.56, 6.58, 6.64, 6.65, 6.67, 6.69, 6.74, 6.76, 6.77, 6.78, 6.79, 6.82, 6.95, 6.96, 6.106; 7.5, 7.30, 7.42; 11.44; 13.21, 13.30, 13.92; 15.4; 27.4, 27.37; 28.11; 29.50 Feilden v Byrne [1926] Ch 620, (1957) 7 P & CR 276, Ch D����������������������������������  13.178, 13.182 Fellowes & Son v Fisher [1976] QB 122, [1975] 3 WLR 184, [1975] 2 All ER 829, (1975) 119 SJ 390, CA������������������������������������������������������������������������������������������  13.62, 13.63, 13.66 Fenner v Wilson [1893] 2 Ch 656, Ch D�������������������������������������������������������������������������������   13.55 Ferguson v Wilson (1866–67) LR 2 Ch App 77, CA����������������������������������������������������  30.19, 30.23 Ferryman’s Application, Re (1957) 7 P & CR 69, [1952] CPL 568, LT�����������  19.10, 19.15, 19.22 Fettishaw Properties Application (No 1), Re (1974) 27 P & CR 139, [1974] JPL 33, LT����������������������������������������������������������������������������������������������������������������������   21.12 Fettishaw Properties Application (No 2), Re (1974) 27 P & CR 292, LT�������   20.16; 21.12, 21.16, 21.22, 21.23; 22.5 FG Whitley & Sons Co Ltd v Secretary of State for Wales (1992) 64 P & CR 296, [1992] 3 PLR 72, [1992] JPL 856, [1992] EG 46 (CS), [1992] NPC 45, CA���������������   32.14 Films Rover International Ltd v Cannon Film Sales Ltd [1987] 1 WLR 670, [1986] 3 All ER 772, Ch D��������������������������������������������������������������������������������������������������  13.70, 13.71 Financial Services Authority v Rourke (t/a JE Rourke & Co) [2002] CP Rep 14, (2001) 98(46) LSG 36, Ch D�����������������������������������������������������������������������������������������   13.14 Finchley Electric Light Co v Finchley UDC [1903] 1 Ch 437, CA���������������������������������������  1.53 Findlay & Co’s Application, Re (1964) 15 P & CR 94, [1963] JPL 345, LT����������������   19.2; 21.12 First National Bank Plc v Thompson [1996] Ch 231, [1996] 2 WLR 293, [1996] 1 All ER 140, [1996] 5 Bank LR 113, (1996) 72 P & CR 118, (1995) 92(28) LSG 30, (1995) 139 SJLB 189, [1995] NPC 130, (1996) 71 P & CR D14, CA��������������������������   15.10 Fisher & Gimson (Builders) Ltd’s Application, Re (1993) 65 P & CR 312, [1993] JPL 260, LT�����������������������������������������������������������������������������������������������������������   16.118; 19.44; 20.12, 20.26, 20.39, 20.42 Fisher’s Application, Re (1957) 7 P & CR 153, LT���������������������������������������������������������������  16.135 Fisher v Brooker [2009] UKHL 41, [2009] 1 WLR 1764, [2009] 4 All ER 789, [2009] Bus LR 1334, [2009] ECDR 17, [2010] EMLR 2, [2009] FSR 25, (2009) 32(9) IPD 32061, (2009) 153(31) SJLB 29, HL����������������������������������������������������������  13.11,13.33, 13.37, 13.52, 13.122, 13.123, 13.126, 13.130, 13.146, 13.149, 13.154 Fisher’s Application, Re (2009) LP/31/2006��������������������������������������������������   20.26; 24.83, 24.136 Fitz v Iles [1893] 1 Ch 77, CA����������������������������������������������������������������������������������  11.177, 11.179 Fitzroy v Cave [1905] 2 KB 364, CA������������������������������������������������������������������������������������    Int Flavell, Re (1883) 25 Ch D 89, CA���������������������������������������������������������������������������������������  26.1 Fletcher v Birkenhead Corpn [1907] 1 KB 205, CA���������������������������������������������������  10.43, 10.45, 10.46, 10.52 Flight v Bentley, 58 ER 793, (1835) 7 Sim 149, Ct of Chancery������������������������������������������    Int Flint v Brandon, 32 ER 314, (1803) 8 Ves Jr 159, Ct of Chancery���������������������������������������  30.5 Flogas v Warrington (t/a Robin Sutton Gases & Calor Gas Ltd) [2007] EWHC 1303, QBD��������    13.65

xliii

Table of Cases Foleys’ Application, Re (2008) LP/58/2006��������������������������������������������������������������������������   20.82 Foli v Devonshire Club (1887) 3 TLR 706����������������������������������������������������������������������������   11.31 Ford-Camber v Deanminster Ltd [2007] EWCA Civ 458, (2007) 151 SJLB 713, CA���������   10.71 Forestmere Properties‘ Application, Re (1981) 41 P & CR 390, [1981] JPL 125, LT���������������������������������������������������������������������������������   16.33, 16.138, 16.139; 17.1, 17.12, 17.15; 19.2, 19.43 Forgacs‘ and Garrett’s Application, Re (1976) 32 P & CR 464, [1976] JPL 637, LT����������������������������������������������������������������������������������   16.106, 16.108; 22.4, 22.11 Formby v Barker [1903] 2 Ch 539, CA�����������������������������������   1.6, 1.7, 1.20, 1.21, 1.51, 1.70; 7.3, 7.43; 11.4, 11.232; 13.38; 26.3 Forster v Baker [1910] 2 KB 636, CA�����������������������������������������������������������������������������������  7.11 Forster v Elvet Colliery Co Ltd [1908] 1 KB 629, CA�����������������������������������������������������  1.51, 1.57 Fortescue v Lostwithiel & Fowey Railway Co [1894] 3 Ch 621, Ch D��������������������������������  30.5 Foster and Wilson v Mapes, 78 ER 468, (1589) Cro Eliz. 212, Ct of KB�����������������������������  26.3 Foster v Fraser [1893] 3 Ch 158, Ch D����������������������������������������������������������������������������������  11.141 Frampton v Gillison [1927] 1 Ch 196, CA���������������������������������������������������������������  11.173, 11.250 Freeman Thomas Indenture, Re [1957] 1 WLR 560, [1957] 1 All ER 532, (1957) 121 JP 189, 55 LGR 232, (1957) 8 P & CR 175, (1957) 101 SJ 320, Ch D��������������������  14.28, 14.30 Freer v Unwins Ltd [1976] Ch 288, [1976] 2 WLR 609, [1976] 1 All ER 634, (1976) 31 P & CR 335, (1975) 120 SJ 267, Ch D������������������������������������������������������  9.36, 9.46, 9.56, 9.60, 9.63, 9.65 Fritz v Hobson (1880) 14 Ch D 542, Ch D����������������������������������������������������������������������������  13.110 Frost v King Edward VII Welsh National Memorial Association for Prevention Treatment and Abolition of Tuberculosis [1918] 2 Ch 180, Ch D��������������������������������  11.127, 11.229, 11.239 Fulham Football Club Ltd v Cabra Estates Plc [1992] BCC 863, [1994] 1 BCLC 363, (1993) 65 P & CR 284, [1993] 1 PLR 29, (1992) 136 SJLB 267, CA������������������   25.6; 29.54

G

G v G (Minors: Custody Appeal) [1985] 1 WLR 647, [1985] 2 All ER 225, [1985] FLR 894, [1985] Fam Law 321, (1985) 82 LSG 2010, (1985) 83 LSG 2010, (1985) 135 NLJ 439, (1985) 129 SJ 315, HL�����������������������������������������������������������������������������������  24.109 Gadd’s Land Transfer, Re [1966] Ch 56, [1965] 3 WLR 325, [1965] 2 All ER 800, (1965) 109 SJ 555, Ch D�����������������������������������������������������������������������   1.26, 1.52, 1.53; 6.59; 13.12; 14.6, 14.10, 14.18; 16.21 Gaffney’s Application, Re (1978) 35 P & CR 440, [1975] JPL 159, LT���������������������  20.26, 20.39, 20.84, 20.88; 23.52 Gafford v Graham (1999) 77 P & CR 73, [1999] 3 EGLR 75, [1999] 41 EG 159, (1998) 95(21) LSG 36, (1999) 96(40) LSG 44, (1998) 142 SJLB 155, [1998] NPC 66, (1998) 76 P & CR D18, CA������������������������������������������������  13.59, 13.60, 13.61, 13.98, 13.99, 13.106, 13.125, 13.129, 13.136 Gaskin v Balls (1879) 13 Ch D 324, CA���������������������������������������������������   8.5; 11.65, 11.74, 11.75 Gateshead Corps Application, Re (1961) 12 P & CR 265, LT���������������������������   19.12; 22.4, 22.16 Gee v National Trust for Places of Historic Interest or Natural Beauty [1966] 1 WLR 170, [1966] 1 All ER 954, (1966) 17 P & CR 6, (1965) 109 SJ 935, CA��������������   10.13; 16.47, 16.64, 16.65, 16.108, 16.118, 16.120, 16.134; 20.88; 24.107, 24.109 George Reed (Builders) Application, Re (1957) 7 P & CR 227, [1956] JPL 303, LT�����������   19.22 George Wimpey Bristol Ltd v Gloucestershire Housing Association Ltd [2011] UKUT 91, LC�������������������������������������������������������������������������������������  16.125, 16.126, 16.127, 16.129; 20.82 German v Chapman (1877) 7 Ch D 271, CA����������������������������������������������������������   11.229; 13.163, 13.170; 16.53 Ghey’s Application, Re; Galton’s Application, Re [1957] 2 QB 650, [1957] 3 WLR 562, [1957] 3 All ER 164, (1958) 9 P & CR 1, (1957) 101 SJ 679, CA�����������������������  16.5, 16.56, 16.58, 16.76, 16.103, 16.118; 17.1, 17.10, 17.27, 17.29; 20.6; 22.9, 22.16; 24.107 Gibbs v Guild [1882] 9 QBD 59, CA������������������������������������������������������������������������������������  13.117 Gilbert v Spoor [1983] Ch 27, [1982] 3 WLR 183, [1982] 2 All ER 576, (1982) 44 P & CR 239, (1982) 126 SJ 260, CA�����������������������������������������������   1.26, 1.27; 16.74, 16.112, 16.116; 20.20, 20.25, 20.26, 20.28; 22.16 Gilbey v Copley (1683) 3 Lev 138����������������������������������������������������������������������������������������  26.1

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Table of Cases Gill v Lewis [1956] 2 QB 1, [1956] 2 WLR 962, [1956] 1 All ER 844, (1956) 100 SJ 299, CA����������������������������������������������������������������������������������������������������������������������������������   29.26 Gillingham Borough Council v Medway (Chatham) Dock Co Ltd [1993] QB 343, [1992] 3 WLR 449, [1992] 3 All ER 923, [1993] Env LR 98, 91 LGR 160, (1992) 63 P & CR 205, [1992] 1 PLR 113, [1992] JPL 458, [1991] EG 101 (CS), [1991] NPC 97, QBD�������������������������������������������������������������������������������������������������������������������������   10.96 Glass v Kencakes Ltd [1966] 1 QB 611, [1965] 2 WLR 363, [1964] 3 All ER 807, (1965) 109 SJ 155, QBD�����������������������������������������������������������������������������������������������������������   11.61 Glevum Estates (Western Counties)’ Application, Re LP/53/1972���������������������������������������  20.6 GLN (Copenhagen) Southern Ltd v ABC Cinemas Ltd [2004] EWCA Civ 1279, [2005] LLR 282, CA�����������������������������������������������������������������������������������������������������  11.15, 11.123, 11.124, 11.186 Goddard v Midland Rly Co (1891) 8 TLR 126���������������������������������������������������������������������  13.159 Golden Lion Hotel (Hunstanton) Ltd v Carter [1965] 1 WLR 1189, [1965] 3 All ER 506, (1965) 109 SJ 648, Ch D������������������������������������������������������������������������������������������   1.51; 8.22 Goldsmith’s Application, Re (1962) 13 P & CR 209, 179 EG 255, [1961] JPL 621, LT����������������������������������������������������������������������������������������������  16.63, 16.90, 16.118 Goldsoll v Goldman [1915] 1 Ch 292, CA����������������������������������������������������������������������������  6.47 Good v Epping Forest DC [1994] 1 WLR 376, [1994] 2 All ER 156, 92 LGR 306, [1993] 3 PLR 135, [1994] 27 EG 135, [1993] EG 188 (CS), (1993) 137 SJLB 277, CA���������   32.27 Goodban’s Application, Re (1972) 23 P & CR 110, LT������������������������������������  21.12, 21.16, 21.23 Gooden v Anstee (1868) 18 LT 898���������������������������������������������������������������������������������������  1.10 Goodright on the demise of Stevenson v Noright, 96 ER 436, (1771) 2 Wm Bl 746, Ct of KB�������������������������������������������������������������������������������������������������������������������������   29.26 Goolden v Anstee (1868) 18 LT 898�������������������������������������������������������������������������  11.159, 11.220 Goring v Nash and Others, 26 ER 909, (1744) 3 Atk 186, Ct of Chancery���������������������������  30.7 Gossip’s Application, Re (1973) 25 P & CR 215, LT�����������������������������������������������   16.75, 16.108; 19.16, 19.50; 20.26 GR & AL Developments Ltd, Re [2009] UKUT 238, LC�����������������������������������������������������  16.108 Graham v Easington DC [2008] EWCA Civ 1503, [2010] RVR 168, CA����������������������������   20.62; 21.15; 22.17; 24.101 Graham v Newcastle-upon-Tyne Corpn (1892) 67 LT 790�����������������������������������������   1.10; 11.148 Graham’s Application LP/83/2005������������������������������������������������������������������   20.26; 21.15; 23.53, 23.54; 24.142 Grampian RC v City of Aberdeen DC, 1984 SC (HL) 58, 1984 SLT 197, (1984) 47 P & CR 633, [1984] JPL 590, HL����������������������������������������������������������������������������������   32.13 Grant v Dawkins [1973] 1 WLR 1406, [1973] 3 All ER 897, (1974) 27 P & CR 158, (1973) 117 SJ 665, Ch D���������������������������������������������������������������������������   13.78; 30.18, 30.23, 30.25 Grant v Edmondson [1931] 1 Ch 1, CA������������������������������������������������������������������   1.51; 6.1; 28.6, 28.29; 29.50 Grant v Langston (Surveyor of Taxes) [1900] AC 383, (1900) 2 F (HL) 49, (1900) 8 SLT 21, HL�����������������������������������������������������������������������������������������������������������������  11.200 Great North of England Clarence and Hartlepool Junction Railway Company v The Clarence Railway Company, 63 ER 520, (1844) 1 Coll 507, Ct of Chancery����������   30.28 Greaves & Co (Contractors)‘s Application, Re (1966) 17 P & CR 57, 196 EG 158, [1965] JPL 748, LT�����������������������������������������������������������������������������������������������������   16.5; 17.7; 19.2 Green Masjid and Madrasah Trustees, Re [2013] UKUT 355, LC��������������������������  16.126, 16.129 Greenhill v Isle of Wight (Newport Junction) Rly Co (1871) 23 LT 885������������������������������  30.5 Gregory v Williams, 36 ER 224, (1817) 3 Mer 582, Ct of Chancery������������������������������������    Int Gresham Life Assurance Society Ltd v Ranger (1899) 15 TLR 454�������������������������������������  11.121 Greyfort Properties Ltd v Secretary of State for Communities and Local Government [2011] EWCA Civ 908, [2011] 3 EGLR 93, [2011] 43 EG 106, [2012] JPL 39, [2011] 31 EG 53 (CS), CA��������������������������������������������������������������������������������������������������������   32.14 Griffith v Pelton [1958] Ch 205, [1957] 3 WLR 522, [1957] 3 All ER 75, (1957) 101 SJ 663, CA������������������������������������������������������������������������������������������������������   7.25; 29.51 Griffiths v Band (1975) 29 P & CR 243, Ch D�������������������������������������������   6.58; 7.4; 14.21, 14.24; 15.13; 21.12, 21.21 Grosvenor (Mayfair) Estate v Merix [2017] EWCA Civ 190, [2017] L & TR 18, [2017] RVR 286, CA�����������������������������������������������������������������������������������������������������  11.198 Grosvenor Motor Co v Chester Corpn (1963) 14 P & CR 478, LT���������������������������������������   10.86 Groves’ Application, Re, LP/50/1986������������������������������������������������������������������������������������   23.54 Groves v Loomes (1885) 53 LT 592��������������������������������������������������������������������������������������  25.6 Gutteridge v Munyard, 173 ER 57, (1834) 7 Car & P 129����������������������������������������������������  11.239 GW Atkins v Scott (1991) 7 Const LJ 215, CA���������������������������������������������������������������������   30.38

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Table of Cases H

Hackney MBC’s Application, Re (1957) 7 P & CR 37, 157 EG 665, LT������������������   17.15, 17.17; 19.42, 19.45; 21.12 Hadley v Baxendale, 156 ER 145, (1854) 9 Ex 341, Ct of Exchequer����������������������   13.186; 30.33 Halifax Mortgage Services Ltd v Stepsky [1996] Ch 207, [1996] 2 WLR 230, [1996] 2 All ER 277, [1996] 1 FLR 620, [1996] 2 FCR 97, (1996) 28 HLR 522, [1996] Fam Law 279, (1996) 93(1) LSG 21, (1996) 140 SJLB 9, [1995] NPC 184, CA�������������������   8.87; 9.19 Hall & Co’s Application, Re (1957) 7 P & CR 159, 165 EG 473, [1955] JPL 371, 105 LJ 253, LT���������������������������������������������������������������������������������������������������������������  16.135 Hall v Box (1870) 18 WR 820����������������������������������������������������������������������������������  11.137, 11.243 Hall v Ewin (1887) 37 Ch D 74, CA������������������������������������������������������   1.10; 11.47, 11.73, 11.75, 11.77, 11.78, 11.239, 11.240 Hall v Warren, 32 ER 738, (1804) 9 Ves Jr 605, Ct of Chancery������������������������������������������  30.6 Halsall v Brizell [1957] Ch 169, [1957] 2 WLR 123, [1957] 1 All ER 371, (1957) 101 SJ 88, Ch D���������������������������������������������������������������������������������������   13.3; 16.42; 26.3; 29.72, 29.73, 29.75, 29.79, 29.83 Hamilton Snowball’s Conveyance, Re [1959] Ch 308, [1958] 2 WLR 951, [1958] 2 All ER 319, (1958) 122 JP 305, (1958) 102 SJ 401, Ch D��������������������������������������������������������  7.15 Hammersmith & City Rly Co v Brand (1869) LR 4 HL 171, HL���������������������  10.36, 10.42, 10.43 Hammersmith & Fulham LBC v Top Shop Centres Ltd [1990] Ch 237, [1989] 2 WLR 643, [1989] 2 All ER 655, [1989] 41 EG 121, (1989) 133 SJ 877, Ch D������������������������������   29.19 Hampstead & Suburban Properties Ltd v Diomedous [1969] 1 Ch 248, [1968] 3 WLR 990, [1968] 3 All ER 545, (1968) 19 P & CR 880, (1968) 112 SJ 656, Ch D����������������������   11.33, 11.127, 11.128 Hanning v Gable Jeffreys Properties Ltd [1965] 1 WLR 1390, [1965] 1 All ER 924, (1965) 109 SJ 900, Ch D�����������������������������������������������������������������������������������  13.55, 13.174, 13.182 Harbour Estates Ltd v HSBC plc [2004] EWHC 1714 (Ch), [2005] Ch 194, [2005] 2 WLR 67, [2004] 3 All ER 1057, [2005] 1 EGLR 107, [2004] 32 EG 62 (CS), Ch D�����������������������������������������������������������������������������������������������������������������  7.34, 7.37, 7.38 Harlow v Hartog (1977) 245 EG 140�������������������������������������������������������������������������������������  11.228 Harmer v Armstrong [1934] Ch 65, CA��������������������������������������������������������������������������������    Int Harper’s Application, Re (1986) 52 P & CR 104, [1986] JPL 443, LT����������������������   20.93; 21.11, 21.12; 23.52 Harris v Beauchamp Bros [1894] 1 QB 801, CA������������������������������������������������������������������   13.25 Harrison Broadley v Smith [1964] 1 WLR 456, [1964] 1 All ER 867, [2008] BTC 7085, (1964) 108 SJ 136, CA���������������������������������������������������������������������������������������������������   13.19 Harrison v Good (1871) LR 11 Eq 338, Ct of Chancery�������������������������������   1.16; 11.117, 11.127, 11.132, 11.246 Hart v Emelkirk Ltd [1983] 1 WLR 1289, [1983] 3 All ER 15, (1983) 9 HLR 114, (1983) 267 EG 946, (1983) 127 SJ 156, Ch D���������������������������������������������������������������   30.40 Harte Lovelace’s Application, Re (1957) 7 P & CR 147, [1955] JPL 74, LT������������������������   20.86 Hartshorn v Angliss [1951] 1 TLR 1043, [1951] WN 293, (1951) 95 SJ 318����������  11.138, 11.177 Hathway’s Application, Re (1969) 20 P & CR 505, LT�����������������������������������������������  19.10, 19.50 Hatton v Connew [2013] EWCA Civ 1560, CA��������������������������������������������������������������������  24.108 Havergill v Hare, 79 ER 435, (1615) Cro Jac. 510, Ct of KB�����������������������������������������������   29.50 Havering College of Further Education’s Application [2006] LP/89/2004���������������������������  11.104 Hawes v Scott (1896) 40 SJ 373, CA������������������������������������������������������������������������������������  11.220 Hawkins, Re [2015] UKUT 564, LC�������������������������������������������������������������������������������������   20.60 Hawley v Steele (1877) 6 Ch D 521, Ch D�������������������������������������������������������������������  10.57, 10.59 Hayim v Couch [2009] EWHC 1040, Ch D��������������������������������������������������������������������������   13.13 Haywood v Brunswick Permanent Benefit Building Society (1881) 8 QBD 403, CA����������������������������������������������������������������������������������������������������������   1.10; 28.6, 28.7; 29.16, 29.69 Haywood v Cope, 53 ER 589, (1858) 25 Beav 140, Ct of Chancery������������������������������������  30.7 Heard v Stuart (1907) 24 TLR 104���������������������������������������������������������������������������  11.121, 11.127 Heath’s Application, Re (1957) 7 P & CR 104, 162 EG 564, 103 LJ 752, [1953] CPL 726, LT�����������������������������������������������������������������������������������������������������������������������������������   19.51 Hedges’s Application, Re (1957) 7 P & CR 270, 168 EG 633, [1957] JPL 61, 106 LJ 812, LT���������������������������������������������������������������������������������������������������������������������������   16.88; 19.6 Hemingway Securities Ltd v Dunraven Ltd (1996) 71 P & CR 30, [1995] 1 EGLR 61, [1995] 09 EG 322, Ch D������������������������������������������������������������������������������������������������  25.7 Henderson’s Conveyance, Re [1940] Ch 835, [1940] 4 All ER 1, (1957) 7 P & CR 332, Ch D����������������������������������������������������������������������������������������������������������������������   16.56; 17.1; 20.26, 20.28

xlvi

Table of Cases Henman’s Application, Re (1972) 23 P & CR 102, LT�������������������������������   16.76, 16.103, 16.108; 20.26, 20.43; 22.9 Henshall v Fogg [1964] 1 WLR 1127, [1964] 2 All ER 868, (1964) 128 JP 511, (1964) 108 SJ 443, CA��������������������������������������������������������������������������������������������������������������  7.15 Hextall’s Application, Re (2000) 79 P & CR 382, LT�����������������������������������������������������������   20.84 Heywood’s Conveyance, Re [1938] 2 All ER 230�����������������������������������������������������������������  1.66 Hickman & Son’s Application, Re (1957) 7 P & CR 33, 158 EG 25, LT�������������������   15.27; 16.37; 19.13, 19.51 Hickman v Isaacs (1861) 4 LT 285����������������������������������������������������������������������������������������  11.239 Hill v Harris [1965] 2 QB 601, [1965] 2 WLR 1331, [1965] 2 All ER 358, (1965) 109 SJ 333, CA��������������������������������������������������������������������������������������������������������������   19.53 Hill v Tupper, 159 ER 51, (1863) 2 Hurl & C 121, Ct of Exchequer������������������������������������    1.8 Hillingdon London Borough Council v Arc Ltd [1999] Ch 139, [1998] 3 WLR 754, [1999] BLGR 282, [1998] 3 EGLR 18, [1998] 39 EG 202, [1998] RVR 242, (1998) 95(15) LSG 34, (1998) 142 SJLB 149, CA�������������������������������������������������������������������������������   10.91 Hilton v Ankesson (1872) 27 LT 519�������������������������������������������������������������������������������������  29.113 Hindley v Emery (1865–66) LR 1 Eq 52, (1865) 11 Jur NS 874, Ct of Chancery����������������   13.78 Hipgrave v Case (1885) 28 Ch D 356, (1885) 54 LJ Ch. 399, CA�������������������������������  30.19, 30.30 Hobson v Tulloch [1898] 1 Ch 424, Ch D���������������������������������������������������  11.201, 11.229, 11.246 Hodges v Jones [1935] Ch 657, Ch D�������������������������������������������������������������������������������  8.22, 8.79 Hodson v Coppard, 54 ER 525, (1860) 29 Beav 4, Ct of Chancery��������������������������������������   13.40 Holdom v Kidd (1991) 61 P & CR 456, [1991] 02 EG 163, [1990] EG 123 (CS), CA����������������������������������������������������������������������������������������������������������   11.119; 13.175 Holford v Acton UDC [1898] 2 Ch 240, Ch D��������������������������������������   1.10; 8.22; 11.223, 11.225 Hollington Bros Ltd v Rhodes [1951] 2 All ER 578 (Note), [1951] 2 TLR 691, [1951] WN 437, Ch D��������������������������������������������������������������������������������������������   11.3; 15.22 Hollis Hospital Trustees and Hague’s Contract, Re [1899] 2 Ch 540, Ch D�������������������   13.6; 29.4 Holloway Bros Ltd v Hill [1902] 2 Ch 612, Ch D�����������������������������������������������������������������   11.47 Holman’s Application, Re (1957) 7 P & CR 56, [1952] CPL 125, LT���������������������������  19.6, 19.22 Holmes v Buckley, 24 ER 20, (1691) Prec Ch 39, Ch D�������������������������������������������������������  28.4 Holms v Seller, 83 ER 702, (1691) 3 Lev 305, Ct of KB������������������������������������������������������  29.111 Holt & Co v Collyer (1881) 16 Ch D 718, Ch D�������������������������������������������������������������������  11.138 Hood v North Eastern Railway Co (No 1) (1869–70) LR 5 Ch App 525, CA����������������������  30.6 Hooper v Bromet (1904) 90 LT 234���������������������������������������������������������������������   8.5, 8.95; 13.159 Hopcraft’s Application, Re (1993) 66 P & CR 475, LT�������������������������   19.68; 20.26, 20.74; 24.97 Hopgood v Brown [1955] 1 WLR 213, [1955] 1 All ER 550, (1955) 99 SJ 168, CA�����������   29.72 Hopkins v Great Northern Rly Co (1877) 2 QBD 224, CA���������������������������������������������������   10.43 Horne’s Case, Co Litt (1401) YB 2 Hen IV���������������������������������������������������������������������������   27.12 Hornsby’s Application, Re (1969) 20 P & CR 495, LT������������������������������������  16.64, 16.65, 16.90, 16.110; 20.26; 22.16 Horsey Estate Ltd v Steiger [1899] 2 QB 79, CA������������������������������������������������������������������  1.26 Horsler v Zorro [1975] Ch 302, [1975] 2 WLR 183, [1975] 1 All ER 584, (1975) 29 P & CR 180, (1975) 119 SJ 83, Ch D����������������������������������������������������������������������������   30.23 Hotchkin v McDonald [2004] EWCA Civ 519, [2005] 1 P & CR 7, [2004] 18 EG 100 (CS), [2004] NPC 64, CA�������������������������������������������������������������������������������������������������  16.4, 16.36 Houdret & Co’s Application, Re (1989) 58 P & CR 310, LT��������������������������������������   17.10; 19.53 Hounslow and Ealing LBC’s Application, Re (1996) 71 P & CR 100, LT���������   20.61; 21.8, 21.12 Howard v Fanshawe [1895] 2 Ch 581, Ch D����������������������������������������������������������������  29.25, 29.30 Hoyle’s Application, Re [2011] UKUT 439 (LC), [2012] JPL 479, LC�������������������������������  16.108 Hubbard v Pitt [1976] QB 142, [1975] 3 WLR 201, [1975] 3 All ER 1, [1975] ICR 308, (1975) 119 SJ 393, CA���������������������������������������������������������������������������������������������������   13.63 Hubbard v Weldon (1909) 25 TLR 356���������������������������������������������������������������������������   27.6; 28.1 Hulton v Hulton [1916] 2 KB 642, KBD; affd [1917] 1 KB 813, CA����������������������������������   13.19 Humphrey v Rogers [2017] 23 November, unreported����������������������������������������������������������   13.96 Hunt v Molnar (1957) 7 P & CR 224, Ch D��������������������������������������������������������������������������  13.170 Hunt’s Application, Re (1997) 73 P & CR 126, LT��������������������������������������������������  16.108, 16.113 Hurleys’ Application, Re (2007) LP/74/2006��������������������������������������������������������������������  24.129 Hutchins Cottage, Horley Row, Horley, Surrey, RH6 8DF, Re [2010] UKUT 235, LC�����������������������������������������������������������������������������������������������������������������  11.88, 11.89 Hutchinson’s Application, Re [2009] UKUT 182 (LC), [2010] 1 EGLR 105, [2010] 4 EG 114, LC����������������������������������������������������������������������������������������������������������������  3.2, 3.7 Hyde v Warden (1877) 3 Ex D 72, CA����������������������������������������������������������������������������������  29.4 Hydeshire Ltd’s Application, Re (1994) 67 P & CR 93, LT��������������������������������������   16.109; 22.17 Hyman v Rose [1912] AC 623, HL������������������������������������������������������������������������������   10.86; 29.30 Hythe Corp v East (1865–66) LR 1 Eq 620, Ct of Chancery������������������������������������������������   30.19

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Table of Cases I

IDC Group Ltd v Clark (1993) 65 P & CR 179, [1992] 49 EG 103, [1992] EG 93 (CS), [1992] NPC 88, CA��������������������������������������������������������������������������������������������������������  29.111 Ilford Park Estates Ltd v Jacobs [1903] 2 Ch 522, Ch D�������������������������������������������������������  11.200 Ind Coope & Co Ltd v Hamblin (1900) 84 LT 168, CA��������������������������������������������������������  11.115 Independent Television Authority’s Application, Re (1962) 13 P & CR 222, [1962] JPL 268, LT�����������������������������������������������������������������������������������������������������   16.5, 16.18, 16.122; 17.25, 17.31; 22.16 Independent Trustee Services Ltd v GP Noble Trustees td [2012] EWCA Civ 195, [2013] Ch 91, [2012] 3 WLR 597, [2012] 3 All ER 210, [2012] 3 FCR 1, [2012] WTLR 1171, CA������������������������������������������������������������������������������������������������    9.7 Inntrepreneur Estates (GL) Ltd v Boyes [1995] ECC 16, (1994) 68 P & CR 77, [1993] 47 EG 140, CA���������������������������������������������������������������������������������������������������������������   12.14 Inntrepreneur Estates Ltd v Mason [1993] 2 CMLR 293, (1994) 68 P & CR 53, [1993] 45 EG 130, QBD������������������������������������������������������������������������������������������������������������   12.14 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, [1998] 1 All ER 98, [1998] 1 BCLC 531, [1997] CLC 1243, [1997] PNLR 541, (1997) 147 NLJ 989, HL����������������������������������������������������������������������������  11.11, 11.94, 11.95 Isaacs & Sons v Salbstein [1916] 2 KB 139, CA������������������������������������������������������������������   13.19 Iveagh v Harris [1929] 2 Ch 142, (1957) 7 P & CR 281, Ch D��������������������������������   13.176; 16.53 Ives v Brown [1919] 2 Ch 314, Ch D������������������������������������������������������   6.21; 7.6, 7.8, 7.12, 7.14, 7.43, 7.44; 11.105, 11.126

J

J Sainsbury plc v Enfield London Borough Council [1989] 1 WLR 590, [1989] 2 All ER 817, (1989) 58 P & CR 441, [1989] 28 EG 134, [1989] EG 4 (CS), Ch D����������������������������������������������������������������������������������������������  6.11, 6.15, 6.16, 6.18, 6.25, 6.26, 6.68; 7.33, 7.38, 7.44; 11.42, 14.18, 14.33; 16.5 JA Pye (Oxford) Ltd v South Gloucestershire DC (No 1) [2001] EWCA Civ 450, [2001] 2 PLR 66, [2001] JPL 1425, [2001] 14 EG 149 (CS), (2001) 98(20) LSG 41, (2001) 145 SJLB 99, [2001] NPC 66, CA���������������������������������������������������������������������   32.25 Jackson v Normanby Brick Co [1899] 1 Ch 438, CA�����������������������������������������������������������   30.28 Jackson v Turnley, 61 ER 587, (1853) 1 Drew 617, Ct of Chancery�������������������������������������  13.9 Jackson v Winnifrith (1882) 47 LT 243���������������������������������������������������������������������������������  13.159 Jacomb v Knight, 46 ER 743, (1863) 3 De GJ & S 533, (1863) 32 LJ Ch 601, Ct of Chancery������������������������������������������������������������������������������������������������������������������������   27.34 Jaggard v Sawyer [1995] 1 WLR 269, [1995] 2 All ER 189, [1995] 1 EGLR 146, [1995] 13 EG 132, [1994] EG 139 (CS), [1994] NPC 116, CA������������   11.237; 13.34, 13.35, 13.39, 13.46, 13.47, 13.59, 13.60, 13.61, 13.75, 13.81, 13.83, 13.89, 13.93, 13.98, 13.101, 13.103, 13.104, 13.106, 13.110, 13.134, 13.187; 30.23, 30.24 Jamaica Mutual Life Assurance Society v Hillsborough Ltd [1989] 1 WLR 1101, (1989) 133 SJ 1032, PC (Jam)����������������������������������������������������������������������������������  8.31, 8.89 Jamelson Property Co’s Application, Re (1957) 7 P & CR 253, 167 EG 625, [1956] JPL 457, LT�������������������������������������������������������������������������������������������������������  16.110, 16.135 James Hall and Co (Property) Ltd v Maughan [2016] UKUT 513, LC��������������������������������  16.8 James Hall and Co’s Application, Re [2017] UKUT 240, LC�����������������������������������������������   20.29 Jarvis, Re [1958] 1 WLR 815, [1958] 2 All ER 336, (1958) 102 SJ 546, Ch D��������������������  13.120 Jay v Richardson, 54 ER 1008, (1862) 30 Beav 563, Ct of Chancery�����������������������������������  11.235 Jeff’s Transfer (No 2), Re [1966] 1 WLR 841, [1966] 1 All ER 937, (1966) 110 SJ 385, Ch D������������������������������������������������������������������������������������������������������   1.45; 6.59, 6.60, 6.63, 6.76, 6.78; 14.33 Jeff’s Transfer, Re (Practice Note) [1965] 1 WLR 972, [1965] 2 All ER 798, (1965) 109 SJ 515, Ch D�����������������������������������������������������������������������������������������������������������   14.33 Jefferys v Jefferys, 41 ER 443, (1841) Cr & Ph 138, Ct of Chancery�����������������������������������  30.5 Jeffkins Indentures, Re (Practice Note) [1965] 1 WLR 375, [1965] 1 All ER 608 (Note), (1965) 109 SJ 110, Ch D�����������������������������������������������������������������  14.8, 14.31, 14.33 Jelson Ltd v Derby City Council [1999] 4 PLR 11, [1999] 3 EGLR 91, [1999] 39 EG 149, [2000] JPL 203, [1999] EG 88 (CS), (1999) 96(26) LSG 30, [1999] NPC 68, Ch D������������������������������������������������������������������������������������������������������  32.47, 32.48, 32.49, 32.52 Jenkins v Jackson (1888) 40 Ch D 71, Ch D�������������������������������������������������������������������������  11.127

xlviii

Table of Cases Jewell v McGowan [2002] EWCA Civ 145, [2002] 3 EGLR 87, (2002) 99(11) LSG 39, [2002] NPC 30, [2002] 2 P & CR DG6, CA�����������������������������������������������������������������  11.119 Jilla’s Application, Re, [2000] 2 EGLR 99, [2000] 23 EG 147, LT��������������������������������������   20.83 John Bros Abergarw Brewery Co v Holmes [1900] 1 Ch 188, Ch D���������������������   1.67; 9.8; 11.47 John Trenberth Ltd v National Westminster Bank Ltd (1980) 39 P & CR 104, (1979) 253 EG 151, (1979) 123 SJ 388, Ch D��������������������������������������������������������������������������   13.39 Johnson v Agnew [1980] AC 367, [1979] 2 WLR 487, [1979] 1 All ER 883, (1979) 38 P & CR 424, (1979) 251 EG 1167, (1979) 123 SJ 217, HL���������������������  13.76, 13.78, 13.79, 13.101, 13.109; 30.19, 30.21, 30.23, 30.25, 30.34 Johnson v Moreton [1980] AC 37, [1978] 3 WLR 538, [1978] 3 All ER 37, (1979) 37 P & CR 243, (1978) 247 EG 895, (1978) 122 SJ 697, HL�������������������������������������  16.4, 16.36 Johnstone v Hall, 69 ER 844, (1856) 2 Kay & J 414, Ct of Chancery�����������������������  11.59, 11.229 Joint London Holdings Ltd v Mount Cook Land Ltd [2005] EWCA Civ 1171, [2006] 2 P & CR 17, [2005] 3 EGLR 119, [2005] 42 EG 234 (CS), (2005) 155 NLJ 1552, [2005] NPC 113, [2006] 1 P & CR DG14, CA�������������������������������������������������������������  11.251 Jones & White & Co’s Application, Re (1989) 58 P & CR 512, LT�����������������   10.96; 17.9, 17.10; 19.44; 20.88; 21.15 Jones v Bone (1869–70) LR 9 Eq 674, Ct of Chancery��������������������������������������������  11.137, 11.250 Jones v Herxheimer [1950] 2 KB 106, [1950] 1 All ER 323, 66 TLR (Pt 1) 403, (1950) 94 SJ 97, CA������������������������������������������������������������������������������������������������������������������   30.36 Jones v Humphrey [1902] 1 KB 10, KBD�����������������������������������������������������������������������������  7.11 Jones v Lipman [1962] 1 WLR 832, [1962] 1 All ER 442, (1962) 106 SJ 531, Ch D�������������������������������������������������������������������������������������������������������������������   11.61; 29.110 Jones v Oven [2017] EWHC 1647 (Ch), Ch D�������������������������������������������������������������  11.18, 11.27 Jones v Price [1965] 2 QB 618, [1965] 3 WLR 296, [1965] 2 All ER 625, (1965) 109 SJ 415, CA�����������������������������������������������������������������������������������������   1.8; 29.113, 29.118 Jones v Pritchard [1908] 1 Ch 630, Ch D������������������������������������������������������������������������������    1.8 Jones v Rhys-Jones (1974) 30 P & CR 451, CA�������������������������   11.3; 16.59, 16.61, 16.62, 16.65, 16.84, 16.85, 16.86, 16.94, 16.97, 16.101, 16.133; 24.107, 24.109 Jones v Secretary of State for Wales, 72 LGR 583, (1974) 28 P & CR 280, CA������������������   32.30 Jones v Thorne, 107 ER 263, (1823) 1 B & C 715, Ct of KB����������������������������������  11.132, 11.239 Jones v Watts (1890) 43 Ch D 574, CA���������������������������������������������������������������������������������   16.21 Joseph v LCC (1914) 111 LT 276������������������������������������������������������������������������������������������  11.121 Joyce v Joyce [1978] 1 WLR 1170, [1979] 1 All ER 175, (1978) 122 SJ 745, Ch D�����������  30.6

K

K & C Bhavnani (Holdings) Application, Re (1961) 12 P & CR 269, LT����������������   11.172; 22.16 Kalsi’s Application, Re (1993) 66 P & CR 313, LT�����������������������   8.17, 8.22; 19.25, 19.38; 20.26 Kane Construction v Secretary of State for Communities and Local Government [2010] EWHC 2227 (Admin), [2011] JPL 304, QBD���������������������������������������������������   16.44 Kaye v Waghorn, 127 ER 900, (1809) 1 Taunt 428, Ct of Comm Pleas�������������������������������   15.13 Keates v Lyon 1868–69) LR 4 Ch App 218, CA in Chancery���������������������   6.10; 7.19; 8.22; 15.13 Keith v Texaco Ltd, 1977 SLT (Lands Tr) 16, (1977) 34 P & CR 249, [1977] JPL 731, LT���������������������������������������������������������������������������������������������������������������������������   23.14 Kelly v Barrett [1924] 2 Ch 379, CA��������������������������������������������������������������   1.26, 1.53, 1.55; 4.2; 8.105, 8.117; 13.51 Kelly v Battershell [1949] 2 All ER 830, CA������������������������������������������������������������������������  8.87 Kelsey v Dodd (1881) 52 LJ Ch 34�������������������������������������������������������������   8.5, 8.6; 13.74, 13.128 Kemp v Bird (1877) 5 Ch D 974, CA������������������������������������������������������������������������������������  11.7 Kemp v Sober (1852) 19 LTOS 308, 61 ER 200, (1851) 1 Sim NS 517, Ct of Chancery������������������������������������������������������������������������������������������������������������������������  11.246 Kennet Properties Ltd’s Application, Re (1996) 72 P & CR 353, [1997] 1 PLR 49, [1996] 2 EGLR 163, [1996] 45 EG 139, LT����������������������������������������������������������   18.4; 21.17 Kennewel v Dye [1949] Ch 517, [1949] 1 All ER 881, [1949] LJR 1250, (1949) 93 SJ 250, Ch D�������������������������������������������������������������������������������������������������������������������������������    9.1 Keppell v Bailey, 39 ER 1042, (1834) 2 My & K 517, Ct of Chancery��������������������������������  28.4 Kerai, Re, [2014] UKUT 153, LC�����������������������������������������������������������������������������������������   20.83 Kershaw’s Application, Re (1976) 31 P & CR 187, [1975] JPL 416, LT���������������   11.172; 16.111, 16.138; 20.26, 20.49, 20.51, 20.84, 20.87, 20.88; 23.14, 23.23 Key v Barrett [124] 2 Ch 379�������������������������������������������������������������������������������������������������   13.52 Kilbey v Haviland (1871) 24 LT 353�������������������������������������������������������������������������������   8.5; 13.43 Kimber v Admans [1900] 1 Ch 412, CA�������������������������������������������������������  11.72, 11.190, 11.194

xlix

Table of Cases King v Dickeson (1889) 40 Ch D 596, Ch D�������������������������������������������������   8.19, 8.22; 9.8; 15.25 Kingsbury v LW Anderson Ltd (1980) 40 P & CR 136, Ch D����������������������������������������������  8.87 Kirby v School Board for Harrogate [1896] 1 Ch 437, CA�������������������  10.33, 10.34, 10.37, 10.39, 10.42, 10.46, 10.49 Kirklees MBC v Wickes Building Supplies Ltd [1993] AC 227, [1992] 3 WLR 170, [1992] 3 All ER 717, [1992] 2 CMLR 765, 90 LGR 391, (1992) 142 NLJ 967, [1992] NPC 86, HL��������������������������������������������������������������������������������������������������������   13.55 Kitchin, Re (1880) 16 Ch D 226, CA������������������������������������������������������������������������������������   10.83 Kitney v MEPC Ltd [1977] 1 WLR 981, [1978] 1 All ER 595, (1978) 35 P & CR 132, (1977) 243 EG 131, (1977) 121 SJ 355, CA����������������������������������������������������  9.36, 9.40, 9.46 Knight v Simmonds [1896] 1 Ch 653, affd [1896] 2 Ch 294, CA��������������   8.5, 8.19, 8.22; 11.239; 13.112, 13.170; 15.25; 16.53 Knott’s Application, Re (1957) 7 P & CR 100, 162 EG 426, [1953] CPL 674, LT������������������������������������������������������������������������������������������������  19.7, 19.9, 19.12, 19.15 Knott’s Application, Re (1968) 19 P & CR 282, [1968] JPL 96, LT�������������������������������������   22.16 Kumar v Dunning [1989] QB 193, [1987] 3 WLR 1167, [1987] 2 All ER 801, (1988) 55 P & CR 64, (1987) 283 EG 59, (1987) 84 LSG 1812, (1987) 137 NLJ 522, (1987) 131 SJ 974, CA�������������������������������������������������������������������   1.27; 5.2; 6.72; 7.31, 7.33, 7.34, 7.37, 7.38, 7.39; 27.6

L

Labone v Litherland Urban DC Liverpool Cooperative Society & Gourley Bros (Third Parties) [1956] 1 WLR 522, [1956] 2 All ER 215, (1956) 100 SJ 360��������������  11.137, 11.175, 11.177 Labouchere v Earl Wharncliffe (1879) 13 Ch D 346, Ch D��������������������������������������������������   11.35 Lady Langdale v Briggs, 44 ER 441, (1856) 8 De GM & G 391, Ct of Chancery���������������  13.9 Lake v Bayliss [1974] 1 WLR 1073, [1974] 2 All ER 1114, (1974) 28 P & CR 209; (1974) 118 SJ 532, Ch D������������������������������������������������������������������������������������������������  1.51 Land at Sandy Lane, Dee Banks, Chester, Re. See University of Chester’s Application, Re Lansing Linde Ltd v Kerr [1991] 1 WLR 251, [1991] 1 All ER 418, [1991] ICR 428, [1991] IRLR 80, (1990) 140 NLJ 1458, CA�����������������������������������������������������������������������������   13.64 Laugher v Williams (1672) 2 Lev 92�������������������������������������������������������������������������������������   27.20 Lavery v Pursell (1888) 39 Ch D 508, (1888) 57 LJ Ch 570, Ch D��������������������������������������   30.19 Law Debenture Trust Corp v Ural Caspian Oil Corp Ltd [1995] Ch 152, [1994] 3 WLR 1221, [1995] 1 All ER 157, [1994] CLC 299, CA���������������������������������������������������������   29.94 Lawntown Ltd v Camenzuli [2007] EWCA Civ 949, [2008] 1 WLR 2656, [2008] 1 All ER 446, [2008] 1 EGLR 73, [2008] 1 EG 136, [2008] JPL 1027, [2007] 42 EG 295 (CS), (2007) 104(41) LSG 26, [2007] NPC 103, CA����������������������������������������������������  15.34, 15.35, 15.36, 15.40, 15.41 Lawrence v Fen Tigers Ltd; sub nom Coventry v Lawrence [2014] UKSC 13, [2014] AC 822, [2014] 2 WLR 433, [2014] 2 All ER 622, [2014] PTSR 384, [2014] BLR 271, 152 Con LR 1, [2014] Env LR 25, [2014] HLR 21, [2014] 2 P & CR 2, [2014] 1 EGLR 147, [2014] LLR 423, (2014) 158(9) SJLB 37, SC������������  13.94, 13.95, 13.96, 13.97, 13.98, 13.99; 20.67, 20.68 Lawrence v Jenkins (1872–3) LR 8 QB 274, QBD�������������������������������������������������������   1.8; 19.113 Lawrence v South County Freeholds Ltd [1939] Ch 656, [1939] 2 All ER 503, Ch D����������������������������������������������������������������������������������������   4.1; 6.2; 8.10, 8.14, 8.17, 8.18, 8.22, 8.23, 8.81; 11.245; 15.25 LCC v Allen [1914] 3 KB 642, CA�����������������������������������������������   1.6, 1.8, 1.20, 1.68; 10.5; 13.38 Le Neve v Le Neve, 27 ER 291, (1747) Amb 436, Ct of Chancery���������������������������������������  9.12 Le Puy Ltd v Potter [2015] EWHC 193 (QB), [2015] IRLR 554, QBD����������������������  13.64, 13.68 Lee Application, Re (1963) 14 P & CR 85, 184 EG 862, [1963] JPL 120, LT���������������������   17.14; 21.12; 22.5 Leech v Schweder (1873–74) LR 9 Ch App. 463, CA����������������������������������������������������������  30.6 Leeds Industrial Cooperative Society Ltd v Slack [1924] AC 851, [1924] All ER Rep 264, HL�����������������������������������������������������������������������������������  13.31, 13.75, 13.78, 13.88, 13.101, 13.110; 30.23 Lee’s Application, Re (1996) 72 P & CR 439, LT���������������������������������������  16.116, 16.126, 16.127 Lee’s Application, Re [2012] UKUT 125, LC����������������������������������������������������������  16.126, 16.127 Les Affréteurs Réunis SA v Leopold Walford (London) Ltd [1919] AC 801, HL���������������  Int, 4.1 Lester v Burgess (1973) 26 P & CR 536, Ch D���������������������������������������������������������������������  9.39 Leverhulme (No 2) [1943] 2 All ER 274 ������������������������������������������������������������������������������   29.52 Lindsay Petroleum Co v Hurd (1873–74) LR 5 PC 221, PC (Can)�������������  13.121, 13.126, 13.149 Ling’s Application, Re (1956) 7 P & CR 233������������������������������������������������������������������������   19.12 Lipton’s Application, Re (1965) 16 P & CR 97, [1964] JPL 693, LT�����������������������������������   16.26

l

Table of Cases Liverpool City Council v Irwin [1977] AC 239, [1976] 2 WLR 562, [1976] 2 All ER 39, (1984) 13 HLR 38, 74 LGR 392, (1976) 32 P & CR 43, (1976) 238 EG 879, [1976] JPL 427, (1976) 120 SJ 267, HL������������������������������������������������������������������������������������   11.26 Liverpool Corpn v Tomlinson (1826) 7 Dow & Ry KB 556�������������������������������������������������  1.71 Livingstones‘ Application, Re (1984) 47 P & CR 462, [1983] JPL 176, LT������������   16.97, 16.108; 20.26, 20.45, 20.87 Lloyd v London Chatham & Dover Rly Co (1865) 12 LT 363���������������������������������������������   10.33 Lloyd’s v Harper (1880) 16 Ch D 290, CA���������������������������������������������������������������������������    Int Lloyd’s and Lloyd’s Application (1993) 66 P & CR 112, [1993] JPL 689, LT����������   17.16, 17.18; 19.44, 19.46; 20.26, 20.73, 20.86 Lloyds Bank Ltd’s Application, Re (1978) 35 P & CR 128, [1977] JPL 668, LT�����������������    20.6, 20.12; 21.12 Locabail International Finance Ltd v Agroexport and Atlanta (UK) Ltd (The Sea Hawk) [1986] 1 WLR 657, [1986] 1 All ER 901, [1986] 1 Lloyd’s Rep 317, (1986) 83 LSG 876, (1986) 130 SJ 245, CA�����������������������������������������������������������������������������������  13.68,13.69 Lock v Furze (1865–66) LR 1 CP 441, 1866) 15 LT 161, Ct of Comm Pleas����������������������   13.80 Loftus (Deceased), Re [2006] EWCA Civ 1124, [2007] 1 WLR 591, [2006] 4 All ER 1110, [2006] WTLR 1391, (2006–07) 9 ITELR 107, (2006) 156 NLJ 1365, [2007] 1 P & CR DG12, CA����������������������������������������������������������������������������������������������������������������������  13.119 London & Blackwall Railway Co v Cross (1886) 31 Ch D 354, CA������������������������������������   13.24 London & Blenheim Estates Ltd v Ladbroke Retail Parks Ltd [1994] 1 WLR 31, [1993] 4 All ER 157, (1994) 67 P & CR 1, [1993] EG 100 (CS), [1993] NPC 86, CA��������������  6.10 London & North Western Railway Co v Garnett (1869–70) LR 9 Eq 26, Ct of Chancery������������������������������������������������������������������������������������������������������������������������  11.138 London & South Western Rly v Gomm (1882) Ch D 562�������������������������   1.5, 1.7; 6.98; 7.1, 7.20; 9.1, 9.2, 9.14; 11.4, 11.47 London & Suburban Land Co v Field (1881) 16 Ch D 645, CA����������������������   8.5; 11.137, 11.138 London and North Western Rly Co v Webb (1863) 9 LT 291����������������������������������������������  11.127 London and South Western Rly Co v Humphrey (1858) 32 LTOS 70�������������   29.110; 30.5, 30.10 London County Council v Allen [1914] 3 KB 642, CA��������������������������������������������������������  1.21 London, Chatham and Dover Rly Co v Bull (1882) 47 LT 413����������������������   11.47, 11.78, 11.82; 13.120, 13.140 London Investment & Mortgage Co’s Application, Re (1957) 7 P & CR 194, 166 EG 621, [1956] JPL 56, LT������������������������������������������������������������������������  16.135, 16.138 Long Eaton Recreation Grounds Co v Midland Rly Co [1902] 2 KB 574, CA����������  10.37, 10.39, 10.42, 10.46, 10.89; 11.143 Long v Gray (1913) 58 SJ 46����������������������������������������������������������������������������������������������  1.7, 1.51 Lord Manners v Johnson (1875) 1 Ch D 673, Ch D����������������������������������������������������   1.51; 11.146 Lord Northbourne v Johnston & Son [1922] 2 Ch 309, Ch D����������������������   1.35, 1.41, 1.48, 1.52; 6.106; 7.8, 7.12, 7.13, 7.14, 7.42, 7.43 Lord Strathcona SS Co v Dominion Coal Co [1926] AC 108, (1925) 23 Ll L Rep 145, 1926 AMC 160, PC (Can)����������������������������������������������������������������������������������������������    Int Lorden v Brooke-Hitching [1927] 2 KB 237, KBD��������������������������������������������������������������  11.137 Lougher v Williams, 83 ER 465, (1672) 2 Lev 92, Ct of KB������������������������������������������������   11.38 Lovelock v Margo [1963] 2 QB 786, [1963] 2 WLR 794, [1963] 2 All ER 13, (1963) 107 SJ 194, (1963) 107 SJ 390, CA�������������������������������������������������������������������������������   29.25 Loverock’s Application, Re (1967) 18 P & CR 161, 119 EG 1043, [1966] JPL 653, LT�����������   21.12 Love’s and Love’s Application, Re (1994) 67 P & CR 101, LT��������������������  16.98, 16.106, 16.118 Lucas v Commerford, 29 ER 469, (1790) 3 Bro CC 166, Ct of Chancery����������������������������    Int Luckies v Simons [2002] EWHC 2504 (Ch), [2003] 2 P & CR 30, Ch D��������������  13.173, 13.177, 13.179, 13.183 Lukey v Higgs (1855) 3 Eq Rep 510�������������������������������������������������������������������������������������  29.110 Lumley v Metropolitan Rly Co (1876) 34 LT 774�����������������������������������������������������������������  11.177 Lund v Taylor (1976) 31 P & CR 167, 239 EG 199, CA�����������������������������������������  8.72, 8.79, 8.89 Luton Trade Unionist Club’s Application, Re (1969) 20 P & CR 1131, [1969] JPL 582, LT����������������������������������������������������������������������   8.22; 16.109, 16.118; 19.10, 19.26, 19.27, 19.32, 19.39; 20.12; 22.1 Lyle v Smith [1909] 2 IR 58��������������������������������������������������������������������������������������������������  27.6 Lyme Valley Squash Club Ltd v Newcastle under Lyme BC [1985] 2 All ER 405, Ch D���������  11.132 Lymington Marina Ltd v Macnamara [2007] EWCA Civ 151, [2007] 2 All ER (Comm) 825, [2007] NPC 27, [2007] Bus LR D29, CA��������������������������������������������������������������  11.167 Lynch, Re [2016] UKUT 488, LC��������������������������������������������������   19.5; 20.26, 20.83, 20.84; 23.4

li

Table of Cases Lyne-Stephens & Scott-Miller’s Contract, Re [1920] 1 Ch 472, CA������������������������������������  7.15 Lyon v Reed, 153 ER 118, (1844) 13 M & W 285, Ct of Exchequer������������������������������������  13.151 Lysaght v Edwards (1876) 2 Ch D 499, Ch D������������������������������������������������������   1.68; 7.15; 33.11 Lyus v Prowsa Developments Ltd [1982] 1 WLR 1044, [1982] 2 All ER 953, (1982) 44 P & CR 213, (1982) 126 SJ 102, Ch D��������������������������������������������������������������������������   15.22

M

M Howard (Mitcham)‘s Application, Re (1957) 7 P & CR 219, 167 EG 413, [1956] JPL 304, LT���������������������������������������������������������������������������������������������������������������������������  13.170 M&E Global (Staffing) Solutions Ltd v Tudge [2016] EWHC 597, QBD����������������������������   13.64 MacKenzie v Childers (1889) 43 Ch D 265, Ch D�����������������������������������������������������  8.5, 8.7, 8.22, 8.57, 8.78, 8.108 Macleay, Re (1875) LR 20 Eq 186, Ct of Chancery��������������������������������������������������������������  29.4 MacLeod v Golden Harp Properties [2014] EWCA Civ 1084, [2015] 1 WLR 1249, [2014] 3 EGLR 133, CA�������������������������������������������������������������������������������������������  9.54, 9.65 Magnohard Ltd v Earl Cadogan [2012] EWCA Civ 594, [2013] 1 WLR 24, [2012] HLR 31, [2012] L & TR 32, [2012] 2 EGLR 74, [2012] 28 EG 82, [2012] 20 EG 93 (CS), CA�����������������������������������������������������������������������������������������������������������  11.110, 11.195 Mahon v Sims [2005] 3 EGLR 67, [2005] 39 EG 138, QBD����������������������������  11.91, 11.95, 11.98 Malekshad v Howard de Walden Estates Ltd (No 1) [2002] UKHL 49, [2003] 1 AC 1013, [2002] 3 WLR 1881, [2003] 1 All ER 193, [2003] HLR 31, [2003] L & TR 13, [2003] 1 EGLR 151, [2002] 50 EG 114 (CS), (2003) 100(6) LSG 26, (2002) 146 SJLB 279, [2002] NPC 160, [2003] 1 P & CR DG18, HL��������������������������������������������������������������  11.199 Malhotra v Choudhury [1980] Ch 52, [1978] 3 WLR 825, [1979] 1 All ER 186, (1978) 122 SJ 681, CA���������������������������������������������������������������������������������������������������������������������   30.23 Manchester Corp v Connolly [1970] Ch 420, [1970] 2 WLR 746, [1970] 1 All ER 961, 68 LGR 379, (1970) 21 P & CR 154, (1970) 114 SJ 108, CA�������������������������������������������   13.64 Manchester, Sheffield & Lincolnshire Rly Co v Anderson [1898] 2 Ch 394, CA�����������������   10.32 Manchester Ship Canal Co v Manchester Racecourse Co [1901] 2 Ch 37, CA�������   1.8, 1.11; 25.6 Mander v Falcke [1891] 2 Ch 554, CA����������������������������������������������������������������������������   9.6; 11.47 Manjang v Drammeh (1991) 61 P & CR 194, PC (Gam)������������������������������������������������������   29.90 Mann v Stephens, 60 ER 665, (1846) 15 Sim 377, Ct of Chancery���������   1.3, 1.10; 6.26; 8.9, 8.50 Manners v Johnson (1875) 1 Ch D 673, Ch D�����������������������������������������������������������������������   13.32 Mansfield DC’s Application (1977) 33 P & CR 141, (1976) 241 EG 241, [1977] JPL 106, LT���������������������������������������������������������������   16.72, 16.73, 16.78, 16.79, 16.81; 19.4, 19.53, 19.56; 20.21, 20.26, 20.57, 20.74 Manz’s Application, Re (1973) 26 P & CR 148, LT�����������������������������������������������������  23.52, 23.53 Marcello Developments Ltd’s Application, Re (2001) LP/18/1999, LP/31/2000������   17.18; 19.46; 20.26, 20.53, 20.84; 23.14; 24.137 Margerison v Bates [2008] EWHC 1211 (Ch), [2008] 3 EGLR 165, Ch D���������������������������������������������������������������������������������������������������������  11.94, 11.95, 11.100 Marquess of Zetland v Driver [1939] Ch 1, [1938] 2 All ER 158, CA�������������������  1.10, 1.26, 1.32, 1.43, 1.51, 1.55; 6.10, 6.35, 6.36, 6.37, 6.42, 6.44, 6.49, 6.54, 6.71, 6.81, 6.85, 6.87; 7.5; 11.33, 11.35, 11.106, 11.107, 11.127, 11.169; 25.2 Marshall v Jarvis Homes Ltd [2004] EWCA Civ 839, [2004] 3 EGLR 81, [2004] 44 EG 154, [2004] 29 EG 116 (CS), [2004] NPC 110, CA���������   11.187, 11.218, 11.237 Marten v Flight Refuelling Ltd [1962] Ch 115, [1961] 2 WLR 1018, [1961] 2 All ER 696, (1962) 13 P & CR 389, (1961) 105 SJ 442, Ch D���������������  1.26, 1.27, 1.36, 1.41, 1.48, 1.51, 1.52; 6.19, 6.47; 9.6; 10.13, 10.32, 10.33, 10.35, 10.58, 10.66, 10.67, 10.92; 13.39 Martin Retail Group Ltd v Crawley BC [2014] L & TR 17, [2014] 1 EGLR 42, CC��������������������������������������������������������������������������������������������������������  12.12, 12.14 Martin’s Application, Re (1989) 57 P & CR 119, [1988] 3 PLR 45, [1989] 05 EG 85, [1989] JPL 33, [1988] EG 74 (CS), CA��������������������������������������   10.96; 16.112; 19.39, 19.66, 19.68; 20.26, 20.34, 20.95, 20.97; 24.107 Martin v David Wilson Homes Ltd [2004] EWCA Civ 1027, [2004] 3 EGLR 77, [2004] 39 EG 134, [2004] NPC 105, CA����������������������������������������������������������  11.216, 11.217 Martin’s Application, Re (1961) 12 P & CR 260, LT������������������������������������������������   16.135; 21.12 Martyn v Clue, 118 ER 249, (1852) 18 QB 661, Ct of QB���������������������������������������������������  29.102 Master v Hansard (1876) 4 Ch D 718, CA���������������������������������������������������������������  11.106, 11.169 Mayner v Payne [1914] 2 Ch 555, Ch D�������������������������������������������������   8.100; 11.83; 15.9; 16.16

lii

Table of Cases MCA East, Ltd, Re [2002] EWHC 1684 (Ch), [2003] 1 P & CR 9, Ch D����������������������  6.13, 6.17, 6.18, 6.23 McEacharn v Colton [1902] AC 104, PC (Aust)����������������������������������������������������������  13.31, 13.40 McGruther v Pitcher [1904] 2 Ch 306, CA����������������������������������������������������������������������������    Int McLean v McKay (1873) LR 5 PC 327, PC (Can)����������������������������������������������������������������    6.9 McMorris v Brown [1999] 1 AC 142, [1998] 3 WLR 971, (1998) 142 SJLB 256, Pc (Jam)���������������������������������������������������������������������������������������������������������������   16.102; 22.8 McVey’s and Robertson’s Application, Re (1973) 26 P & CR 429, LT�����������������������  23.20, 23.39 Meadows v Clerical Medical & General Life Assurance Society [1981] Ch 70, [1980] 2 WLR 639, [1980] 1 All ER 454, (1980) 40 P & CR 238, (1979) 255 EG 883, (1980) 124 SJ 257, Ch D������������������������������������������������������������������������������������������������  16.5 Mercian Housing Society’s Application, Re (1972) 23 P & CR 116, LT�����������������   16.108; 20.84, 20.88; 22.16 Meredith v Wilson (1893) 69 LT 336�����������������������������������������������������������������������  13.142, 13.163 Messageries Imperiales Co v Baines (1863) 7 LT 763 ���������������������������������������������������������    Int Metropolitan Board of Works v McCarthy (1874–75) LR 7 HL 243, HL�����������������������������   10.79 Metzger v Department of Health and Social Security [1977] 3 All ER 444, Ch D; affd [1978] 1 WLR 1046, [1978] 3 All ER 753, (1978) 122 SJ 572, CA����������������������   13.13 Meux v Cobley [1892] 2 Ch 253, Ch D���������������������������������������������������������������������������������   10.86 Midland Bank Trust Co v Green [1981] AC 513, [1981] 2 WLR 28, [1981] 1 All ER 153, (1981) 42 P & CR 201, (1981) 125 SJ 33, HL�����������������������������������������  9.9, 9.12, 9.13, 9.36 Milbury Care Services Ltd’s Application, Re (1995) LP/78/1995�������������������������������  20.75, 20.76 Milebush Properties Ltd v Tameside MBC [2010] EWHC 1022 (Ch), [2010] 2 EGLR 93, [2010] 30 EG 64, [2010] JPL 1303, [2010] 20 EG 145 (CS), [2010] NPC 58, Ch D����������������������������������������������������������������������������������������������������������������   32.49 Milebush Properties Ltd v Tameside MBC [2011] EWCA Civ 270, [2011] PTSR 1654, [2012] 1 P & CR 3, [2011] 2 EGLR 143, [2011] 12 EG 114 (CS), [2011] NPC 31, [2011] 2 P & CR DG5, CA��������������������������������������������������������������������������������������������   32.70 Miles v Easter. See Union of London and Smith’s Bank Ltd’s Conveyance, Re Milius’s Application, Re (1995) 70 P & CR 427, [1996] 1 EGLR 209, [1996] RVR 91, LT�������������������������������������������������������������������������������������   1.12; 16.33, 16.36, 16.38, 16.41; 25.5; 32.39 Millbank’s Executors v Secretary of State for the Environment (1991) 61 P & C.R. 11, [1990] 1 PLR 18, [1990] JPL 518, CA��������������������������������������������������������������������   19.51 Millbourn v Lyons [1914] 2 Ch 231, CA���������������������������������������   1.6, 1.23, 1.51, 1.68, 1.70; 6.10 Millgate Developments Ltd v Smith [2016] UKUT 515, LC���������  16.129; 20.64, 20.66, 20.69, 20.90 Mills Application, Re (1967) 18 P & CR 391, [1967] JPL 405, LT����������������������������   22.17; 23.10 Milnes v Branch, 105 ER 1101, (1816) 5 M & S 411, Ct of KB���������������������������������������   1.51; 6.1 Ministry of Housing & Local Government v Sharp [1970] 2 QB 223, [1970] 2 WLR 802, [1970] 1 All ER 1009, 68 LGR 187, (1970) 21 P & CR 166, (1970) 114 SJ 109, CA��������������������������������������������������������������������������������������������������������������  9.32 Mira Oil Resources of Tortola v Bicimar NV [1999] 1 All ER (Comm) 732, [1999] 2 Lloyd’s Rep 101, [1999] CLC 819, QBD�������������������������������������������������������������������   11.21 Mitchell v Steward (1865–66) LR 1 Eq 541, Ct of Chancery�����������������������������������������������  13.138 Mohammadzadeh v Joseph [2006] EWHC 1040 (Ch), [2008] 1 P & CR 6, Ch D���������������  6.31 Monypenny v Monypenny, 11 ER 671, (1861) 9 HL Cas 114, Ct of Chancery��������������������  11.2 Moody v Vercan [1991] 2 EGLR 288, CA����������������������������������������������������������������������������   19.58 Moore, Re (1888) 39 Ch D 116, CA��������������������������������������������������������������������������������������  29.4 Moore v Ullcoats Mining Co Ltd (No 1) [1908] 1 Ch 575, Ch D�����������������������������������������   29.19 Morgan v Pike, 139 ER 195, (1854) 14 CB 473, Ct of Comm Pleas������������������������������������  26.3 Morgan’s Application, Re (1957) 7 P & CR 200, [1956] JPL 139, LT���������������������������������  16.118 Morgan’s Application, Re (1960) 11 P & CR 399, LT��������������������������������  16.135, 16.137, 16.138 Morland v Cook (1868) LR 6 Eq 252, Ct of Chancery�����������������������������������������   1.16; 25.3; 27.6; 28.5, 28.7; 29.70 Morrells of Oxford Ltd v Oxford United Football Club Ltd [2001] Ch 459, [2001] 2 WLR 128, (2001) 81 P & CR 13, [2001] 1 EGLR 76, [2001] 04 EG 147, [2000] EG 96 (CS), (2000) 144 SJLB 248, [2000] NPC 86, (2001) 81 P & CR DG3, CA����������������������������  11.51, 11.53, 11.59; 28.12 Morris v Burroughs, 26 ER 253, (1737) 1 Atk 399, (1743) 2 Atk 627, Ct of Chancery�������  30.5 Morris v Grant (1875) WR 55������������������������������������������������������������������������������������   11.121; 13.68 Mortimer v Bailey [2004] EWCA Civ 1514, [2005] BLR 85, [2005] 2 P & CR 9, [2005] 1 EGLR 75, [2005] 02 EG 102, [2004] NPC 162, CA�����������������������������������������������������   13.61 Moses v Taylor (1862) 11 WR 81������������������������������������������������������������������������������������������  11.239 Mosley v Cooper [1990] 23 EG 66, Ch D�����������������������������������������������������������������������������   28.23

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Table of Cases Mothercare Ltd v Robson Books Ltd [1979] FSR 466, Ch D�����������������������������������������������   13.62 Moto Hospitality Ltd v Secretary of State for Transport [2007] EWCA Civ 764, [2008] 1 WLR 2822, [2008] 2 All ER 718, [2007] RVR 247, [2008] JPL 358, (2007) 157 SJLB 1426, [2007] NPC 95, CA����������������������������������������������������������������������������������������������   10.77 Moxhay v Inderwick, 63 ER 1261, (1847) 1 De G & Sm 708, Ct of Chancery��������������������  29.109 Muller v Trafford [1901] 1 Ch 54, Ch D�������������������������������������������������������������������������������   11.47 Mumford v Walker (1901) 71 LJKB 19���������������������������������������������������������������������������������   11.59 Munday’s Application, Re (1957) 7 P & CR 130, 164 EG 399, [1954] JPL 766, LT�������������������������������������������������������������������������������������������  20.26, 20.30, 20.35, 20.42, 20.43 Murray’s Application, Re (1963) 14 P & CR 63, 182 EG 975, [1962] JPL 553, LT�������������   22.13 Murray v Dunn [1907] AC 283, 1907 SC (HL) 8, (1907) 15 SLT 2, HL�������������������  11.32, 11.154

N

Nalder & Collyer’s Brewery Co Ltd v Harman (1900) 83 LT 257��������������������������   4.4; 6.101; 8.6, 8.22, 8.23, 8.27, 8.60, 8.91 National Provincial Bank Ltd v Ainsworth [1965] AC 1175, [1965] 3 WLR 1, [1965] 2 All ER 472, (1965) 109 SJ 415, HL�����������������������������������������������   1.51; 16.5; 27.34 National Schizophrenia Fellowship v Ribble Estates SA (1993) 25 HLR 476, [1994] 03 EG 132, [1993] EG 39 (CS), Ch D���������������������������������������������������������������   11.127, 11.134; 14.6 National Trust for Places of Historic Interest or Natural Beauty v Midlands Electricity Board [1952] Ch 380, [1952] 1 All ER 298, [1952] 1 TLR 74, (1952) 116 JP 65, (1952) 96 SJ 29, Ch D��������������������������������������������������������������������   1.41; 10.13; 11.33, 11.139 Nemcova v Fairfield Rents Ltd [2016] UKUT 303 (LC), [2017] 1 P & CR 4, [2017] L & TR 10, LC����������������������������������������������������������������������������������������������������������������������  11.212 Nester’s Application, Re, sub nom Jones’s Application, Re, LP/53/2005; LP/62/2005����������������������������������������������������������������������������������������������������������  24.86, 24.141 New Ideal Homes Ltd’s Application, Re (1978) 36 P & CR 476, [1978] JPL 632, LT�����������������������������������������������������������������������������������   16.28, 16.97; 20.40, 20.61, 20.64, 20.93; 23.52 Newbury DC v Secretary of State for the Environment [1981] AC 578, [1980] 2 WLR 379, [1980] 1 All ER 731, 78 LGR 306, (1980) 40 P & CR 148, [1980] JPL 325, (1980) 124 SJ 186, HL���������������������������������������������������������������������������������������������������   32.12 Newman v Real Estate Debenture Corpn Ltd [1940] 1 All ER 131�������������������������������  8.48, 8.113 Newton Abbot Co-operative Sociey Ltd v Williamson & Treadgold Ltd [1952] Ch 286, [1952] 1 All ER 279, [1952] 1 TLR 283, Ch D����������������������   1.26, 1.27, 1.50; 4.8; 6.7, 6.70, 6.100, 6.106; 7.8, 7.12, 7.13, 7.27, 7.42, 7.43; 11.19, 11.176; 27.11, 27.28 Nickerson v Barroughclough [1981] Ch 426, [1981] 2 WLR 773, [1981] 2 All ER 369, (1981) 41 P & CR 225, (1981) 125 SJ 185, CA������������������������������������������������������������   29.90 Nicoll v Fenning (1881) 19 Ch D 258�������������������������������������������������������   1.14, 1.31; 4.3, 4.7, 4.8; 8.108; 11.47, 11.137 Nisbet & Pott’s Contract, Re [1906] 1 Ch 386, CA������������������   1.4, 1.6, 1.7, 1.11, 1.16,1.51, 1.67; 8.104; 9.6, 9.11, 9.69; 11.47; 15.13; 33.11 Norfolk and Norwich University Hospital Trust’s Application, Re (2002) LP/41/2001������������  24.144 Norman v Hardy [1974] 1 WLR 1048, [1974] 1 All ER 1170, (1974) 27 P & CR 509, (1974) 118 SJ 516, Ch D������������������������������������������������������������������������������������������������   13.58 North Bedfordshire Association for Moral Welfare’s Application, Re (1959) 10 P & CR 429, LT�������������������������������������������������������������������������������������   16.108, 16.135, 16.138; 22.16 North London Railway Co v Great Northern Railway Co (1883) 11 QBD 30, CA��������������   13.25 Northampton Gas-Light Company v William Parnell, 139 ER 572, (1855) 15 CB 630, Ct of Comm Pleas����������������������������������������������������������������������������������������������������������  26.3 Northumberland Ave Hotel Co, Re (1886) 33 Ch D 16, CA�������������������������������������������������   30.19 Norval v Pascoe (1864) 10 LT 809����������������������������������������������������������������������������������������  1.10 Norwich & Peterborough Building Society v Steed [1991] 1 WLR 449, [1991] 2 All ER 880, (1993) 65 P & CR 108, CA������������������������������������������������������������������������������������  9.56 Norwich City College of Further & Higher Education v McQuillin [2009] EWHC 1496 (Ch), [2009] 2 P & CR 22, [2009] 27 EG 90 (CS), [2009] NPC 85, Ch D�������������������  6.88 Norwich life Insurance v British Rlys Board (1987) 283 EG 846, Ch D������������������������������   11.15 Notley’s Application, Re (1957) 7 P & CR 157, [1955] JPL 216, LT�����������������������������������   19.19 Nottingham Patent Brick & Tile Co v Butler (1886) 16 QBD 778, CA���������������������  8.6, 8.9, 8.22, 8.23, 8.50, 8.61, 8.68, 8.78, 8.92, 8.104 Nussey v Provincial Bill Posting Co [1909] 1 Ch 734, CA�������������������������  11.142, 11.228, 11.239 Nwakobi v Nzekwu [1964] 1 WLR 1019, (1964) 108 SJ 518, PC (Nigeria)������������������������  13.151

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Table of Cases Nweze v Nwoko [2004] EWCA Civ 379, [2004] 2 P & CR 33, (2004) 101(17) LSG 30, (2004) 148 SJLB 472, [2004] NPC 50, [2004] 2 P & CR DG1, CA�����������������������������   32.49 NWL Ltd v Woods (The Nawala) (No 2) [1979] 1 WLR 1294, [1979] 3 All ER 614, [1980] 1 Lloyd’s Rep 1, [1979] ICR 867, [1979] IRLR 478, (1979) 123 SJ 751, HL������������������������������������������������������������������������������������������������������������  13.63, 13.64

O

Oakacre Ltd v Claire Cleaners (Holdings) Ltd [1982] Ch 197, [1981] 3 WLR 761, [1981] 3 All ER 667, (1982) 43 P & CR 48, Ch D��������������������������������������������������������   13.78 O’Briens’ Application, Re (2008) LP/8/2005������������������������������������������������������������   16.108; 19.29 Oceanic Village Ltd v United Attractions Ltd [2000] Ch 234, [2000] 2 WLR 476, [2000] 1 All ER 975, [2000] 1 EGLR 148, [1999] EG 152 (CS), [1999] NPC. 156, (2000) 79 P & CR D42, Ch D�����������������������������������������������������������������   1.15; 9.26, 9.45; 11.14, 11.240 Official Custodian for Charities v Parway Estates Developments Ltd (In Liquidation) [1985] Ch 151, [1984] 3 WLR 525, [1984] 3 All ER 679, (1984) 1 BCC 99253, [1985] PCC 133, (1984) 48 P & CR 125, (1984) 270 EG 1077, (1984) 81 LSG 2382, (1984) 128 SJ 549, CA��������������������������������������������������������������������������������������������������������������   29.27 Ogle’s Application, Re; Ministry of Health’s Application, Re (1958) 9 P & CR 526, 170 EG 366, [1957] JPL 745, LT������������������������������������������������������������������������������������������   16.5; 22.5 Onward Building Society v Smithson [1893] 1 Ch 1, CA�����������������������������������������������������  1.51 Orchard Trading Estate Management Ltd v Johnson Security Ltd [2002] EWCA Civ 406, [2002] 2 EGLR 1, [2002] 18 EG 155, [2002] 15 EG 132 (CS), (2002) 99(17) LSG 38, [2002] NPC 49, [2002] 2 P & CR DG13, CA���������������������������������������������������������������  29.8 O’Reilly’s Application, Re (1993) 66 P & CR 485, LT���������������������������������   16.98, 16.138; 20.22, 20.23, 20.74, 20.93 Osborne’s Application, Re (1973) 25 P & CR 212, [1972] JPL 378, LT������������������������������   21.12 Osborn’s and Easton’s Application, Re (1979) 38 P & CR 251, [1979] JPL 38, LT������������������������������������������������������������������������������������������������   16.6, 16.49, 16.108; 20.26, 20.60, 20.61 Osborne v Bradley [1903] 2 Ch 446, Ch D������������������������������������������������������   1.8, 1.20, 1.55; 7.2; 8.22, 8.33, 8.38, 8.91, 8.95; 11.59, 11.69; 13.49, 13.52, 13.82, 13.87, 13.109, 13.124, 13.150, 13.161, 13.163 Oxy Electric Ltd v Zainuddin [1991] 1 WLR 115, [1990] 2 All ER 902, [1990] 3 PLR 115, Ch D����������������������������������������������������������������������������������������������������������  13.27, 13.48, 13.52, 13.55, 13.58, 13.62

P

P & A Swift Investments v Combined English Stores Group plc [1989] AC 632, [1988] 3 WLR 313, [1988] 2 All ER 885, (1989) 57 P & CR 42, [1988] 43 EG 73, [1988] EG 104 (CS), (1988) 138 NLJ Rep. 202��������������������������������������������������������������   1.27; 7.34; 27.5, 27.6, 27.22 Paddington Corp v Attorney General [1906] AC 1, HL���������������������������������������������������������  11.139 Page v King’s Parade Properties Ltd (1967) 20 P & CR 710, Ch D�����������������������   4.6; 8.84, 8.103 Page’s Application, Re (1996) 71 P & CR 440, LT�����������������������������������������������������������  16.108 Pakenham’s Case (1368) Y&B 42 Edw 3������������������������������������������   7.1; 11.38; 27.4, 27.6, 27.12, 27.15, 27.20, 27.26; 28.1; 30.29 Pakwood Transport v 15 Beauchamp Place (1978) 36 P & CR 112, (1977) 245 EG 309, CA ���������������������������������������������������������������������������������������������������������������������������������������   29.27 Palethorpe v Home Brewery Co Ltd [1906] 2 KB 5, CA������������������������������������������������������   11.59 Palser v Grinling [1948] AC 291, [1948] 1 All ER 1, 64 TLR 2, [1948] LJR 600, (1948) 92 SJ 53, HL�����������������������������������������������������������������������������������������������������������������������   20.38 Parkash v Irani Finance Ltd [1970] Ch 101, [1969] 2 WLR 1134, [1969] 1 All ER 930, (1969) 20 P & CR 385, (1969) 113 SJ 106, Ch D���������������������������������������������������������  9.47 Parker v Camden LBC [1986] Ch 162, [1985] 3 WLR 47, [1985] 2 All ER 141, (1985) 17 HLR 380, 84 LGR 16, (1985) 129 SJ 417, CA���������������������������������������������  30.5, 30.9, 30.11, 30.13, 30.28, 30.40 Parsons v Thatchers Wood Residents Co Ltd [2011] EWHC 4095, Ch D����������������������������  11.217 Patching v Dubbins, 69 ER 1, (1853) Kay 1; affd 2 Eq Rep 71��������������������������������������������  11.115 Patel v WH Smith (Eziot) Ltd [1987] 1 WLR 853, [1987] 2 All ER 569, (1987) 84 LSG 2049, (1987) 131 SJ 888, CA���������������������������������������������������������������������������   13.62 Patman v Harland (1881) 17 Ch D 353, Ch D�������������������������������������������   9.20, 9.22, 9.48; 11.229 Patten’s Application, Re (1976) 31 P & CR 180, [1975] JPL 539, LT����������������������������������  16.138 Pauling’s Settlement Trusts (No 1), Re [1964] Ch 303, [1963] 3 WLR 742, [1963] 3 All ER 1, (1963) 107 SJ 492, CA�������������������������������������������������������������������������������  13.117

lv

Table of Cases Peabody Donation Fund Governors v London Residuary Body (1987) 55 P & CR 355, Ch D�������������������������������������������������������������������������������������������������������������������������������  10.6 Pearce v Maryon-Wilson [1935] Ch 188, Ch D������������������������������������������������   8.98; 11.35, 11.169 Pearson’s Application, Re (1978) 36 P & CR 285, LT������������������������������   16.86, 16.97; 22.4; 25.6 Pease v Coats (1866) LR 2 Eq 688, Ct of Chancery��������������������������������������������������������������  11.243 Peek v Matthews (1867) LR 3 Eq 515, Ct of Chancery����������������������   4.2; 13.141, 13.163, 13.166 Penn v Lord Baltimore, 27 ER 1132, (1750) 1 Ves Sen 444, Ct of Chancery�����������������������  30.5 Pennell v Payne [1995] QB 192, [1995] 2 WLR 261, [1995] 2 All ER 592, [1995] 1 EGLR 6, [1995] 06 EG 152, [1994] EG 196 (CS), (1995) 139 SJLB 17, [1994] NPC 151, (1995) 69 P & CR D1, CA���������������������������������������������������������������������������������������������   27.13 Pennine Raceway Ltd v Kirklees MBC [1983] QB 382, [1982] 3 WLR 987, [1982] 3 All ER 628, 81 LGR 89, (1983) 45 P & CR 313, (1982) 263 EG 712, [1984] RVR 85, [1982] JPL 780, (1982) 79 LSG 921, (1984) 134 NLJ 969, (1982) 126 SJ 449, CA������������������������������������������������������������������������������������������������������������  32.31, 32.32 Perkins v McIver [2012] [2012] EWCA Civ 735, CA������������������������������������������������   8.22; 24.101 Peyton’s Application, Re (1961) 12 P & CR 263, LT��������������������������������������������������   20.84; 22.16 Phillips‘ Application, Re (1957) 7 P & CR 182, 166 EG 148, [1955] JPL 682, 105 LJ 604 LT����������������������������������������������������������������������������������������������������������������������������   20.19 Phillips Electronique Grand Public SA v British Sky Broadcasting Ltd [1995] EMLR 472, CA������������������������������������������������������������������������������������������  11.23, 11.25, 11.26 Phillips v Doelittle, 88 ER 247, (1724) 8 Mod 345, Ct of KB����������������������������������������������   29.25 Piggott v Stratton, 70 ER 453, (1859) John 341, Ct of KB�������������������������������������������   8.22; 11.31 Pilcher v Rawlins (1871-72) LR 7 Ch App 259, (1872) 20 WR 281, (1872) 41 LJ Ch 485, (1872) 25 LT 921, CA����������������������������������������������������������������������������������������������   9.9; 29.12 Pinewood Estate, Farnborough, Re [1958] Ch 280, [1957] 3 WLR 256, [1957] 2 All ER 517, (1958) 9 P & CR 51, (1957) 101 SJ 554, Ch D�����������������������������������������������   5.2; 6.106 Pioneer Properties Application, Re (1957) 7 P & CR 264, 168 EG 119, [1956] JPL 613, 106 LJ 460, LT���������������������������������������������������������������������������������������������������������������  16.5 Pirabakaran v Patel [2006] 1 WLR 3112�����������������������������������������������������������������������������  29.18 Pitman v Woodbury, 154 ER 732, (1848) 3 Ex 4, Ct of Exchequer��������������������������������������  26.3 Plumpton Parish Council’s Application, Re (1963) 14 P & CR 234, 185 EG 185, [1963] JPL 195, LT�����������������������������������������������������������������������������������������������������������  16.46, 16.47 Pomfret v Ricroft, 85 ER 454, (1669) 1 Saund 321 Ct of KB�����������������������������������������������  29.113 Pordage v Cole (1669) 1 Wms Saund 319�����������������������������������������������������������������������������  11.3 Portman v Home Hospital Association (1879) 27 Ch D 81n�������������������������������������������������  11.229 Posner v Scott-Lewis [1987] Ch 25, [1986] 3 WLR 531, [1986] 3 All ER 513, [1986] 1 EGLR 56, (1985) 277 EG 859, (1986) 83 LSG 359, (1986) 130 SJ 14, Ch D�����������  30.5 Poster v Slough Estates Ltd [1969] 1 Ch 495, [1968] 1 WLR 1515, [1968] 3 All ER 257, (1968) 19 P & CR 841, [1968] JPL 687, (1968) 112 SJ 705, Ch D������������������������������   8.122 Potter v Perry (1859) 23 JP 644����������������������������������������������������������������������������������������  28.1, 28.5 Potters Application, Re (1959) 10 P & CR 68, LT����������������������������������������������������������������  16.110 Pottier’s Application, Re [1967] RPC 170�����������������������������������������������������������������������������   20.83 Pottier’s Application, Re [2010] UKUT 2006�����������������������������������������������������������������������   24.81 Poulton’s Application, Re (1993) 65 P & CR 319, [1993] JPL 473, LT��������������������   16.108; 20.86 Pound v Ashford Borough Council [2003] EWHC 1088 (Ch), [2004] 1 P & CR 2, [2003] 2 PLR 83, (2003) 100(27) LSG 36, [2003] NPC 67, Ch D�������������������������������������������   10.28 Powell v Hemsley [1909] 1 Ch 680, Ch D, affd [1909] 2 Ch 252, CA��������������������������   1.10, 1.26; 11.55, 11.56,11.57, 11.62, 11.74, 11.76, 11.77, 11.78, 11.80, 11.106, 11.147, 11.159, 11.160, 11.161; 13.90 Price v Bouch (1987) 53 P & CR 257, [1986] 2 EGLR 179, (1986) 279 E. 1226, Ch D�������������������������������������������������������������������������������������������������������������������������������  11.163 Price v Price (1887) 35 Ch D 297, Ch D�������������������������������������������������������������������������������   11.69 Pritchard v Briggs [1980] Ch 338, [1979] 3 WLR 868, [1980] 1 All ER 294, (1980) 40 P & CR 1, (1979) 123 SJ 705, CA���������������������������������������������������������������������������������  25.6 Prothero v Bell (1906) 22 TLR 370���������������������������������������������������������������������������������������   11.59 Public Trustee v Westbrook [1965] 1 WLR 1160, [1965] 3 All ER 398, (1965) 109 SJ 792, CA���������������������������������������������������������������������������������������������������������������������   29.26 Pullan v Koe [1913] 1 Ch 9, Ch D�����������������������������������������������������������������������������������������  26.1 Pulleyne v France (1912) 57 Sol Jo 173, CA�������������������������������������������������������������������������  13.166 Purkiss Application, Re [1962] 1 WLR 902, [1962] 2 All ER 690, 60 LGR 349, (1962) 13 P & CR 277, [1962] RVR 455, (1962) 106 SJ 308, CA�������������������������������������   13.12; 16.25, 16.26; 24.107 Purnell’s Application, Re (1988) 55 P & CR 133, LT������������������������������������   16.108; 20.26; 22.16 Putsman v Taylor [1927] 1 KB 637, KBD�����������������������������������������������������������������������������  6.47

lvi

Table of Cases Q

Quaffers Ltd’s Application, Re (1988) 56 P & CR 142, [1988] EG 17 (CS), LT���������   1.26; 16.78, 16.86, 16.113; 19.6, 19.22, 19.33, 19.37, 19.39, 19.52; 23.52 Quarterly’s Application, Re (1989) 58 P & CR 518, LT�����������������������������������   16.41; 19.51; 20.87 Quickfit & Quartz’s Application, Re (1965) 16 P & CR 99, [1964] JPL 760; 114 LJ 607, LT���������������������������������������������������������������������������������������������������������������   21.12

R

R v Braintree District Council, ex p Halls (2000) 32 HLR 770, (2001) 3 LGLR 10, (2000) 80 P & CR 266, [2000] 3 EGLR 19, [2000] 36 EG 164, [2000] EG 32 (CS), CA�����������������������������������������������������������������������������������������������������������   10.11, 10.22; 11.166 R v Cardiff CC, ex p Sears Group Properties Ltd [1998] 3 PLR 55, [1998] PLCR 262, (1998) 95(17) LSG 29, [1998] NPC 46, QBD���������������������������������������������������������������   20.97 R v City of London Council, ex p Master Governors & Commonality of the Mystery of the Barbers of London (1997) 73 P & CR 59, [1996] 2 EGLR 128, [1996] 42 EG 156, [1996] EG 101 (CS), [1996] NPC 91, QBD������������������������������������������������������������������   10.71 R v Cousins (1886) 31 Ch D 671, Ch D���������������������������������������������������������������������������  9.18, 9.19 R v Coventry City Council, ex p Arrowcroft Group Plc [2001] PLCR 7, QBD��������������������   16.44 R v Paulter (1887) 20 QBD 132, QBD�������������������������������������������������������������������������  10.75, 10.87 R v Plymouth City Council, ex p Plymouth and South Devon Cooperative Society (1994) 67 P & CR 78, [1993] 2 PLR 75, [1993] 36 EG 135, [1993] NPC 84, CA�������������������   32.27 R v Rent Officer of Nottingham Registration Area, ex p Allen (1985) 17 HLR 481, (1986) 52 P & CR 41, [1985] 2 EGLR 153, (1985) 275 EG 251, QBD�����������  11.153, 11.199 R v Secretary of State for the Environment, ex p Royal Society for the Protection of Birds (RSPB) [1997] Env LR 431, (1995) 7 Admin LR 434, (1995) 139 SJLB 86, [1995] NPC 22, HL�������������������������������������������������������������������������������������������������������������������   13.17 R v South Northamptonshire DC, ex p Crest Homes Plc, 93 LGR 205, [1994] 3 PLR 47, [1994] EG 158 (CS), [1994] NPC 123, CA����������������������������������������������������������  32.44, 32.47 R v Tunbridge Wells Borough Council, ex p Blue Boys Development Ltd (1990) 59 P & CR 315, [1990] 1 PLR 55, [1990] JPL 495, QBD����������������������������   10.96; 15.17; 19.67 R v Wandsworth London Borough Council, ex p Beckwith [1996] 1 WLR 60, [1996] 1 All ER 129, [1996] 1 FCR 504, 94 LGR 77, (1996) 8 Admin LR 242, (1996) 30 BMLR 105, (1996) 93(2) LSG 28, (1996) 140 SJLB 27, HL����������������������������������������������������   10.67 R v Westminster City Council, ex p Leicester Square Coventry Street Association Ltd (No 2) 87 LGR 675, (1990) 59 P & CR 51, [1989] EG 59 (CS), QBD����������   11.127, 11.148; 16.26; 20.17 R (on the application of AS Property Investments Ltd) v Hounslow LBC [2008] EWHC 1631 (Admin), QBD������������������������������������������������������������������������������������������������������   32.37 R (on the application of Batchelor Enterprises Ltd) v North Dorset DC [2003] EWHC 3006 (Admin), [2004] JPL 1222, QBD�����������������������������������������������������  32.76, 32.78, 32.79 R (on the application of Garden and Leisure Group Ltd) v North Somerset Council [2003] EWHC 1605 (Admin), [2004] 1 P & CR 39, [2004] JPL 232, QBD�������������������  32.78, 32.80 R (on the application of Khodari) v Kensington & Chelsea Council [2017] EWCA Civ 333, [2018] 1 WLR 584, [2018] RTR 5, [2017] JPL 1105, CA��������  1.13; 10.20; 16.40; 25.6; 28.27; 32.35, 32.37, 32.91, 32.92 R (on the application of Mayer Parry Recycling Ltd) v Environment Agency (Interim Relief) [2001] CP Rep 63, [2001] Env LR 35, QBD��������������������������������������������  13.17, 13.18 R (on the application of Millgate Developments Ltd) v Wokingham BC [2011] EWCA Civ 1062, [2012] 3 EGLR 87, [2012] 39 EG 120, [2012] JPL 258, (2011) 108(29) LSG 20, CA����������������������������������������������������������������������������������������������������������  32.25, 32.71 R (on the application of Renaissance Habitat Ltd) v West Berkshire DC [2011] EWHC 242 (Admin), [2011] 2 EGLR 80, [2011] 22 EG 104, [2011] JPL 1209, [2011] 8 EG 119 (CS), [2011] NPC 20, QBD���������������������������������������������������������������������������  32.78, 32.79 Radford v De Froberville [1977] 1 WLR 1262, [1978] 1 All ER 33, 7 BLR 35, (1978) 35 P & CR 316, (1977) 121 SJ 319, Ch D����������������������������������������������������������   29.110; 30.5, 30.24, 30.35 Radstock Cooperative & Industrial Society Ltd v Norton-Radstock UDC [1968] Ch 605, [1968] 2 WLR 1214, [1968] 2 All ER 59, (1968) 132 JP 238, 66 LGR 457, (1968) 112 SJ 135, CA��������������������������������������������������������������������������������������������������������������  6.22 Radstock Cooperative & Industrial Society v Norton-Radstock Urban DC [1967] Ch 1094, [1967] 3 WLR 588, [1967] 2 All ER 812, (1967) 131 JP 387, 65 LGR 518, Ch D�����������   19.76 Rae’s application, Re [2016] UKUT 552, LC����������������������������������������������������   19.5, 19.62; 20.83, 20.84; 24.81

lvii

Table of Cases Rainy Sky SA v Kookmin Bank [2011] UKSC 50, [2011] 1 WLR 2900, [2012] 1 All ER 1137, [2012] 1 All ER (Comm) 1, [2012] Bus LR 313, [2012] 1 Lloyd’s Rep 34, [2011] 2 CLC 923, [2012] BLR 132, 138 Con LR 1, [2011] CILL 3105, SC����������������������������������������������������������������������������������������������������  11.17, 11.96, 11.98, 11.99, 11.102 Ramage v Womack [1900] 1 QB 116, QBD��������������������������������������������������������������������������  26.3 Ramuz v Leigh-on-Sea Conservative and Unionist Club Ltd (1915) 31 TLR 174����������������  11.227 Randall v Rigby, 150 ER 1372, (1838) 4 M & W 130Ct of Exchequer��������������������������������   29.50 Ranken v Hunt (1894) 10 R 249��������������������������������������������������������������������������������������������  11.137 Rapley v Smart (1893) 10 TLR 174���������������������������������������������������������������������������������������  11.239 Rasbridge’s Application, Re [2012] UKUT 246 (LC), [2012] JPL 1521, LC�������������   19.68; 22.17 Rayner v Preston (1881) 18 Ch D 1, CA�������������������������������������������������������������������������   1.51; 7.15 Reading Industrial Cooperative Society Ltd v Palmer [1912] 2 Ch 42, Ch D�����������������������  11.170 Reckitt v Cody [1920] 2 Ch 452, Ch D�������������������������������������������������������������������   11.152; 29.109 Rees v Peters [2011] EWCA Civ 836, [2011] 2 P & CR 18, CA������������������������������������   6.89; 9.53 Reeves v Cattell (1876) 24 WR 485������������������������������������������������������������������������������������   11.229 Reeves v Greenwich Tanning Company (Limited), 71 ER 380, (1864) 2 Hem & M 54, Ct of KB�������������������������������������������������������������������������������������������������������������������������  11.239 Regent Oil Co Ltd v JA Gregry (Hatch End) Ltd [1966] Ch 402, [1965] 3 WLR 1206, [1965] 3 All ER 673, (1965) 109 SJ 833, CA����������������������������������������������������������������  1.51 Regis Property Co Ltd v Redman [1956] 2 QB 612, [1956] 3 WLR 95, [1956] 2 All ER 335, (1956) 100 SJ 417, CA�������������������������������������������������������������������������������������������    1.8 Reid v Bickerstaff [1909] 2 Ch 305, CA��������������������   1.55; 6.2, 6.10, 6.20, 6.22, 6.23, 6.53, 6.84, 6.99, 6.100; 7.16, 7.19; 8.4, 8.22, 8.27, 8.30, 8.35, 8.48, 8.56, 8.75, 8.76, 8.81, 8.89, 8.91; 11.223, 11.225 Reid’s Application, Re (1957) 7 P & CR 165, 165 EG 473, [1955] JPL 457, 105 L.J. 317, LT���������������������������������������������������������������������������������������������������������������������������   19.69 Renals v Cowlishaw (1879) 11 Ch D 866, CA������������������   4.4; 6.14, 6.21, 6.52, 6.77, 6.99, 6.104, 6.106; 7.3, 7.15, 7.16, 7.18, 7.25; 8.9, 8.10, 8.22, 8.24, 8.47, 8.50 Reynolds‘ Application (Modification of Restrictive Covenant), Re (1987) 54 P & CR 121, LT����������������������������������������������������������������������������������������   11.90; 20.46, 20.84 RG Kensington Management Co Ltd v Hutchinson IDH Ltd [2002] EWHC 1180 (Ch), [2003] 2 P & CR 13, Ch D���������������������������������������������������������������������������������������������   32.49 Rhone v Stephens [1994] 2 AC 310, [1994] 2 WLR 429, [1994] 2 All ER 65, [1994] 37 EG 151, [1994] EG 50 (CS), (1994) 138 SJLB 77, [1994] NPC 43, HL���������������   9.1; 25.3; 28.8, 28.11; 29.72, 29.73, 29.74, 29.78, 29.79, 29.80, 29.82, 29.84 Richard’s Application, Re (1984) 47 P & CR 467, LT��������������������������������������������������   22.4; 23.52 Richards v Revitt (1877) 7 Ch D 224�����������������������������������������   1.16; 13.50, 13.52, 13.91, 13.142 Richardson v Jackson [1954] 1 WLR 447, [1954] 1 All ER 437, (1957) 7 P & CR 345, (1954) 98 SJ 145, Ch D������������������������������������������������������������������������  13.179, 13.181, 13.182 Ricketts v Enfield (Churchwardens) [1909] 1 Ch 544, Ch D������������������������������������������������   11.39 Ridley v Lee [1935] Ch 591, Ch D����������������������������������������������������������������������������������������  8.17 Ridley v Taylor [1965] 1 WLR 611, [1965] 2 All ER 51, (1965) 16 P & CR 113, (1965) 109 SJ 292, CA������������������������������������������������������������������������������������������������������  1.10, 1.27, 1.30, 1.31; 16.15, 16.28, 16.32, 16.61, 16.62, 16.63, 16.65, 16.84, 16.90, 16.91, 16.92, 16.94, 16.108, 16.119, 16.122, 16.133; 22.2, 22.3, 22.16, 22.17; 24.107, 24.109, 24.138 Rigby v Connol (1880) 14 Ch D 482, Ch D��������������������������������������������������������������������������  30.5 Rigby v Great Western Rly Co, 153 ER 703, (1845) 14 M & W 811, Ct of Exchequer�������  11.3 Roadside Group Ltd v Zara Commercial Ltd [2010] EWHC 1950 (Ch), [2010] 3 EGLR 41, [2010] 46 EG 118, [2010] 33 EG 70 (CS), [2011] 1 P & CR DG5, Ch D��������������������   11.53 Roake v Chadha [1984] 1 WLR 40, [1983] 3 All ER 503, (1984) 47 P & CR 27, (1984) 128 SJ 32, Ch D����������������������������������������������������������������������������������   1.44; 6.33, 6.42, 6.44, 6.54, 6.71, 6.74, 6.78; 7.5, 7.30; 27.38 Roberts v Church Commissioners for England [1972] 1 QB 278, [1971] 3 WLR 566, [1971] 3 All ER 703, (1971) 115 SJ 792, CA���������������������������������������������������������  6.12, 16.14 Roberts v Howlett [2002] 1 P & CR 19, Ch D����������������������������������������������������������������������  11.197 Robertson v Wait, 155 ER 1360, (1853) 8 Ex 299, Ct of Exchequer������������������������������������    4.1 Robins’ Application, Re (2005) LP/17/2004���������������������������������������������������������������   16.47; 24.48 Robinson v Harman, 154 ER 363, (1848) 1 Ex 850, Ct of Exchequer����������������������������������   30.32 Robinson’s Application, Re (1965) 16 P & CR 106, 193 EG 565, [1965] JPL 111, 115 LJ 128, LT�����������������������������������������������������������������������������������   16.5, 16.93; 21.8; 22.16

lviii

Table of Cases Robinson’s Application, Re [2010] 1 P&CR 20��������������������������������������������������������������������   20.84 Rock Portland Cement Co v Wilson (1882) 48 LT 386���������������������������������������������������������   30.23 Rogers v Challis, 54 ER 68, (1859) 27 Beav 175, Ct of Chancery��������������������������������  30.5, 30.19 Rogers v Hosegood [1900] 2 Ch 388, CA���������������������������������������������   1.26, 1.51; 6.1, 6.2, 6.8, 6.18, 6.53, 6.70, 6.77, 6.83, 6.98, 6.99, 6.100, 6.101; 7.3, 7.29, 7.44, 11.39, 11.192, 11.193, 11.194, 11.195, 11.201, 11.227; 13.30; 27.30, 27.38 Rogers v Rice [1892] 2 Ch 170, CA��������������������������������������������������������������������������������������   29.27 Rolls v Miller (1884) 27 Ch D 71, CA�������������������������������������������������  11.8, 11.10, 11.173, 11.229 Roper v Williams, 37 ER 999, (1822) Turn & R 18, Ct of Chancery��������������������������������   4.2; 8.22 Rosher, Re (1884) 26 Ch D 801, Ch D����������������������������������������������������������������������������������  29.4 Rother v Colchester Corp [1969] 1 WLR 720, [1969] 2 All ER 600, (1969) 113 SJ 243, Ch D������������������������������������������������������������������������������������������������������������������  11.176, 11.177 Rowell v Satchell [1903] 2 Ch 212, Ch D�����������������������������������������������������������������������������  8.87 Royal Mail Estates v Pridebank Ltd [2015] EWHC 1540 (Ch)����������������������������������  11.16, 11.124 Royal Victoria Pavilion, Ramsgate, Re [1961] Ch 581, [1961] 3 WLR 491, [1961] 3 All ER 83, (1961) 12 P & CR 349, (1961) 105 SJ 684, Ch D���������������������������������������������������   11.52 Rudkin’s Application, Re (1965) 16 P & CR 75, LT�������������������������������������������������������������   16.93 Russell v Archdale [1964] Ch 38, [1962] 3 WLR 192, [1962] 2 All ER 305, (1963) 14 P & CR 24, (1962) 106 SJ 390, Ch D������������������������������������������������������  6.9, 6.34, 6.58, 6.68, 6.71, 6.73, 6.78; 7.4 Russell v Baber (1870) 18 WR 1021������������������������������������������������������������������������  11.220, 11.228 Russell v Watts (1885) 10 App Cas 590, HL�������������������������������������������������������������������������  11.3 Rutherford’s Conveyance, Re [1938] Ch 396, [1938] 1 All ER 495, (1957) 7 P & CR 322, Ch D��������������������������������������������������������������������������������������������������������   1.51, 1.68, 1.69; 7.9; 8.17, 8.22; 9.36; 11.4 Ruxley Electronics & Construction Ltd v Forsyth [1996] AC 344, [1995] 3 WLR 118, [1995] 3 All ER 268, [1995] CLC 905, 73 BLR 1, 45 Con LR 61, (1995) 14 Tr LR 541, (1995) 11 Const LJ 381, [1995] EG 11 (CS), (1995) 145 NLJ 996, (1995) 139 SJLB 163, HL�������������������������������������������������������������������������������������  30.33, 30.37, 30.38 Ryan v Mutual Tontine Westminster Chambers Association [1893] 1 Ch 116, CA��������������  30.5 Rye v Rye [1962] AC 496, [1962] 2 WLR 361, [1962] 1 All ER 146, (1962) 106 SJ 94, HL��������������������������������������������������������������������������������������������������������   8.17; 32.54

S

Sack v West [1925] Ch 235, Ch D�����������������������������������������������������������������������������������������    1.8 Saddington’s Application, Re (1965) 16 P & CR 81, 189 EG 455, [1964] JPL 203, LT������   20.26 Sahota v RR Leisureways (UK) Ltd [2010] EWHC 3114, Ch D������������������������������������������   11.28 Salford Estates (No 2) Ltd v Durham CC [2012] EWHC 2512 (Admin), [2013] JPL 293, QBD�������������������������������������������������������������������������������������������������������������������������������   32.24 Sampson, Re [2017] UKUT 127, LC�������������������������������������������������������������������������������������  11.104 Samuels & Son (Newbury) Ltd’s Application, Re (1962) 13 P & CR 212, 179 EG 431, [1961] JPL 774, 111 LJ 536, LT������������������������������������������������������������������������������������  16.135 Sandbrook, Re [1912] 2 Ch 471, Ch D����������������������������������������������������������������������������������  29.4 Sarfraz v Disclosure and Barring Service [2015] EWCA Civ 544, [2015] 1 WLR 4441, CA��������������������������������������������������������������������������������������������������������������  24.115 Sarum Trust v Duke of Westminster, 161 EG 104, [1953] CPL 86, CA����������������������  15.33, 15.34 Savage v Foster, 88 ER 299, (1722) 9 Mod 35, Ct of KB�����������������������������������������������������  13.147 Saviker’s Application (No 2), Re (1973) 26 P & CR 441, LT�������������������   16.103, 16.108, 16.112; 20.40, 20.43; 22.9 Sayers v Collyer (1884) 28 Ch D 103, CA��������������������������������   11.65; 13.23, 13.49, 13.74, 13.75, 13.82, 13.132, 13.166 Scala House & District Property Co v Forbes [1974] QB 575, [1973] 3 WLR 14, [1973] 3 All ER 308, (1973) 26 P & CR 164, (1973) 117 SJ 467, CA�������������������������   29.16 Schreiber v Creed, 59 ER 515, (1839) 10 Sim 9, Ct of Chancery�����������������������   4.1; 7.12; 8.4, 8.5 Scmlla Properties Ltd v Gesso Properties (BVI) Ltd [1995] BCC 793, [1995] EG 52 (CS), [1995] NPC 48, (1995) 70 P & CR D1, Ch D���������������������������������������������������������������   33.11 Scolefield v Whitehead, 23 ER 690, (1690) 2 Vern 127, Ct of Chancery������������������������������  30.6 Segal Securities Ltd v Thoseby [1963] 1 QB 887, [1963] 2 WLR 403, [1963] 1 All ER 500, (1962) 106 SJ 1053, QBD����������������������������������������������������������������������������������������������  11.206 Selwyn’s Conveyance, Re [1967] Ch 674, [1967] 2 WLR 647, [1967] 1 All ER 339, (1967) 111 SJ 134, Ch D������������������������������������������������������������������������������������  6.9, 6.49, 6.62 Serjeant Rudhall’s Case (1596) Sav 76����������������������������������������������������������������������������������  29.4 Severn Trent Water Ltd’s Application, Re (1994) 67 P & CR 236, LT����������������������������������  24.141

lix

Table of Cases Seymour Road (Southampton) Ltd v Williams [2010] EWHC 111 (Ch), [2010] 2 P & CR DG5, Ch D���������������������������������������������������������������������������������������������������������������������  6.26 Shafto v Bolckow Vaughan & Co (1887) 34 Ch D 725, Ch D����������������������������������������������   13.40 Shah and Shah’s Application (1991) 62 P & CR 450, [1991] JPL 762, LT���������������������������  16.138 Sharp v Harrison [1922] 1 Ch 502, Ch D������������������������������������������������������   11.121; 13.23, 13.39, 13.43, 13.83, 13.85, 13.89 Sharp v Waterhouse, 119 ER 1449, (1857) 7 El & Bl 816, Ct of QB�����������������������   7.1; 25.3; 27.6 Shaw v Applegate [1977] 1 WLR 970, [1978] 1 All ER 123, (1978) 35 P & CR 181, (1977) 121 SJ 424, CA���������������������������������������������������   11.73, 11.122, 11.157; 13.30, 13.31, 13.49, 13.55, 13.83, 13.84, 13.108, 13.124, 13.125, 13.126, 13.129, 13.133, 13.145, 13.149 Shaw v Foster (1872) LR 5 HL 321, HL����������������������������������������������������������������   1.51; 7.15, 7.19 Shaw’s Application, Re (1967) 18 P & CR 144, LT�����������������������������������������   16.65, 16.75; 22.16 Shaw’s Application, Re (1994) 68 P & CR 591, LT������������������������������������������������������   3.4; 11.116 Shayler v Woolf [1946] Ch 320, [1946] 2 All ER 54, [1947] LJR 71, 175 LT 170, (1946) 90 SJ 357, CA��������������������������������������������   13.7; 25.3; 27.4, 27.6, 27.24, 27.26, 27.38 Shears v Wells [1936] 1 All ER 832�����������������������������������������������������������������   9.24; 11.59, 11.105 Sheehy’s Application, Re (1992) 63 P & CR 95, [1992] JPL 78, LT������������������������  16.88, 16.103, 16.108, 16.109; 20.26; 22.9 Shelfer v City of London Electric Lighting Co (No 1) [1895] 1 Ch 287, CA�������������  13.33, 13.52, 13.87, 13.92, 13.95, 13.96, 13.97, 13.98 Shepherd Homes Ltd v Sandham (No 1) [1971] Ch 340, [1970] 3 WLR 348, [1970] 3 All ER 402, (1970) 21 P & CR 863, (1970) 114 SJ 636, Ch D����������������������   13.42, 13.67, 13.181 Shepherd Homes Ltd v Sandham (No 2) [1971] 1 WLR 1062, [1971] 2 All ER 1267, (1971) 22 P & CR 835, (1971) 115 SJ 487, Ch D������������������������������   1.10, 1.50, 1.51; 13.12, 13.32; 16.29, 16.92; 25.5 Shephard v Turner [2006] EWCA Civ 8, [2006] 2 P & CR 28, [2006] 2 EGLR 73, [2006] 20 EG 294, [2006] RVR 299, (2006) 103(7) LSG 26, (2006) 150 SJLB 166, [2006] NPC 6, CA����������������������������������������������������������������������������   11.129, 11.129; 16.102, 16.107, 16.108; 20.23, 20.26, 20.36, 20.38, 20.51, 20.52, 20.67, 20.68; 22.7, 22.10; 23.15 Sheppard v Gilmore (1887) 57 LT 614����������������������������������������������������������������������������������  8.23 Sherwood Close (Barnes) Management Co’s Application, Re [1972] Ch 208, [1971] 3 WLR 902, [1971] 3 All ER 1293, (1971) 22 P & CR 1031, (1971) 115 SJ 740, Ch D�����������������������������������������������������������������������������������������������������������������������   28.23 Shiloh Spinners Ltd v Harding [1973] AC 691, [1973] 2 WLR 28, [1973] 1 All ER 90, (1973) 25 P & CR 48, (1972) 117 SJ 34, HL���������������   8.117; 13.6; 29.5, 29.6, 29.12, 29.16, 29.24, 29.32, 29.33, 29.34, 29.48, 29.64 Shropshire CC v Edwards (1983) 46 P & CR 270, Ch D����������������������   6.9, 6.11, 6.12, 6.20, 6.25; 7.29; 8.52; 11.9, 11.143, 11.151; 13.12, 13.13; 14.11, 14.22 Sidney v Clarkson, 55 ER 839, (1865) 35 Beav 118, Ct of Chancery�����������������������������������  8.98 Signature of St Albans (Property) Ltd v Wragg [2017] EWHC 2352 (Ch), [2017] HLR 45, Ch D������������������������������������������������������������������������������������������������������   11.69; 13.150, 13.161 Simeon & Isle of Wight RDC, Re [1937] Ch 525, [1937] 3 All ER 149, Ch D����������  10.37, 10.44, 10.45, 10.46, 10.52 Simper v Foley, 70 ER 1179, (1862) 2 John & H 555, Ct of KB������������������������������������������   27.34 Singh v Singh [2014] EWHC 2762 (Ch), [2015] 1 P & CR DG4, Ch D������������������������������   13.13 Site Developments (Ferndown) Ltd v Cuthbury Ltd [2010] EWHC 10 (Ch), [2011] Ch 226, [2011] 2 WLR 74, [2010] NPC 4, Ch D������������������������������������������������������������������������  6.82 SJC Construction Co Ltd v Sutton LBC (1974) 28 P & CR 200, LT������������   16.123; 20.26, 20.36, 20.37, 20.47, 20.58, 20.59, 20.63, 20.88, 20.91, 20.92; 22.16; 23.17, 23.18, 23.19 SJC Construction Co Ltd v Sutton LBC (1975) 29 P & CR 322, CA�������������������������  20.37, 20.47, 20.54, 20.91, 20.92; 23.2, 23.6, 23.7, 23.17, 23.20, 23.22, 23.28, 23.29, 23.34, 23.36, 23.38, 23.52; 24.107 Skupinski’s Application, Re (2004) LP/34/03, [2005] RVR 269, LT�����������������������   11.118; 23.14, 23.36, 23.44, 23.46 Slack v Hancock (1912) 107 LT 14����������������������������������������������������������������������������������  9.18, 9.19 Small (Hugh) v Oliver & Saunders (Developments) Ltd [2006] EWHC 1293 (Ch), [2006] 3 EGLR 141, [2006] 23 EG 164 (CS), Ch D�������������������������������������������   6.77; 13.107

lx

Table of Cases Smith & Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500, [1949] 2 All ER 179, 65 TLR 628, (1949) 113 JP 388, 47 LGR 627, (1949) 93 SJ 525, CA����������������������������������������������������������������������������   3.4; 11.51; 13.30; 25.3; 27.4, 27.6, 27.7, 27.9, 27.18, 27.19, 27.20, 27.21, 27.22, 27.23, 27.25, 27.26, 27.34, 27.38; 28.2, 28.9, 28.11 Smith & Stott, Re (1883) 29 ChD 1009n�������������������������������������������������������������������������������  29.101 Smith v Colbourne [1914] 2 Ch 533, CA������������������������������������������������������������������������������  25.3 Smith v Jones [1954] 1 WLR 1089, [1954] 2 All ER 823, (1954) 98 SJ 540, Ch D�������������   11.28 Smith v Morgan [1971] 1 WLR 803, [1971] 2 All ER 1500, (1971) 22 P & CR 618, (1971) 115 SJ 288, Ch D������������������������������������������������������������������������������������������������  25.6 Snaith and Dolding’s Application, Re [1995] 71 P & CR 104��������������������������������  16.102, 16.103, 16.106,16.108; 20.26; 22.8, 22.9 Snook, Re [2014] UKUT 623 (LC), [2016] 1 P & CR DG18, LC����������������������������������������   20.33 Snooks’ Application, Re [2016] 1 P&CR DG 18������������������������������������������������������������������   20.82 Snow v Whitehead (1884) 51 LT 253, (1884) 27 Ch D 588, Ch D���������������������������������������  11.200 Sobey v Sainsbury [1913] 2 Ch 513, Ch D�����������������������������������������������������������������   1.55; 13.168, 13.170; 16.53 Solarfilms (Sales) Ltd’s Application, Re (1994) 67 P & CR 110, LT���������������   16.108; 19.3; 20.26 Solicitors Arbitration, Re [1962] 1 WLR 353, [1962] 1 All ER 772, (1962) 106 SJ 221, Ch D�������������������������������������������������������������������������������������������������������������������������������  11.203 Somerset Coal Canal Company v Harcourt, 53 ER 478, (1857) 24 Beav 571, Ct of Chancery������������������������������������������������������������������������������������������������������������������������  13.147 South Eastern Rly Co & Wiffin’s Contract, Re [1907] 2 Ch 366, Ch D��������������������������������  1.66 South of England Dairies Ltd v Baker [1906] 2 Ch 631, Ch D���������������������������������������������   27.16 Southampton City Council v Hallyard Ltd [2008] EWHC 916 (Ch), [2009] 1 P & CR 5, [2008] JPL 1440, Ch D�����������������������������������������������������������������������������������������  32.32, 32.41 Southampton Corp’s Application, Re (1957) 7 P & CR 237, [1956] JPL 381, LT���������������������������������������������������������������������������������������������������������������   16.135; 19.12 Southend on Sea BC’s Application, Re (1966) 17 P & CR 55, 195 EG 725, [1965] JPL 571, LT��������������������������������������������������������������������������������������������������������   16.135; 21.12 Spencer v Bailey (1893) 69 LT 179�����������������������������������������������������������������������������������   1.51; 3.8 Spencer’s Case, 77 ER 72, (1583) 5 Co Rep 16a, Ct of QB��������������������������������������� Int; 1.5, 1.24; 11.4; 16.33; 29.98 Spicer v Martin (1888) 14 App Cas 12, HL�����������������������������������������������   4.4; 8.9, 8.9, 8.10, 8.11, 8.18, 8.19, 8.22, 8.24, 8.47, 8.59, 8.66; 11.229 Spring House (Freehold) Ltd v Mount Cook Land Ltd [2001] EWCA Civ 1833�������  11.21, 11.231A Spruce Enterprises Ltd v Palmer [2004] WL 1640384����������������������������������������������������������   11.10 Spruit v John Smith’s Tadcaster Brewery Ltd (No 1) (1958) 9 P & CR 24, CA�������������������  24.107 St Albans Investments Application, Re (1957) 7 P & CR 260, 167 EG 509, [1956] JPL 462, LT�����������������������������������������������������������������������������������������������������������������������������������   16.26 St Albans Investments Application, Re (1958) 9 P & CR 536, LT������������������������������   16.48; 22.16 St Bernards Park’s Application, Re (1964) 15 P & CR 90, 185 EG 899, [1963] JPL 196, LT��������������������������������������������������������������������������������������������������������   19.6, 19.15; 22.16 St Edmundsbury & Ipswich Diocesan Board of Finance v Clark (No 2) [1975] 1 WLR 468, [1975] 1 All ER 772, (1975) 29 P & CR 336, (1974) 119 SJ 220, CA�������������������������   11.21 St Mary Magdalene, Stoke Bishop and the Bristol Diocesan Board of Finance’s Application, Re (1969) 20 P & CR 508, [1967] JPL 32, LT��������������������������������������������������������������   22.16 St Marylebone Property Co Ltd v Tesco Stores [1988] 2 EGLR 40, [1988] 27 EG.72, Ch D������������������������������������������������������������������������������������������������������������������  11.180, 11.182 Stafford-Flowers v Linstone Chine Management Co Ltd [2015] UKUT 82, LC�����������������������������������������������������������������������������������������������������   16.108; 19.36; 20.26 Standard Commercial Properties Securities Ltd v Glasgow City Council [2006] UKHL 50, 2007 SC (HL) 33, 2006 SLT 1152, 2007 SCLR 93, [2007] JPL 758, [2006] 47 EG 181 (CS), (2006) 103(46) LSG 31, (2006) 150 SJLB 1534, [2006] NPC 122, 2006 GWD 38-748, HL���������������������������������������������������������������������������������������������������������������������   10.71 Stanhope v Haworth (1886) 3 TLR 34�����������������������������������������������������������������������������������   29.26 Stannard v Issa [1987] AC 175, [1987] 2 WLR 188, (1987) 84 LSG 340, (1987) 131 SJ 133, Pc (Jam)��������������������������������������������������������������������������������������������������   16.37; 20.20, 20.21, 20.23 Star Cinemas (London) and Central & Surburban Finance’s Application, Re (1970) 21 P & CR 825, LT�����������������������������������������������������������������������������������������������������   17.19; 22.2 Star v Rookesby, 91 ER 295, (1710) 1 Salk 335, Ct of KB���������������������������������������������������  29.113

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Table of Cases Starlight Shipping Co v Allianz Marine & Aviation Versicherungs AG [2014] EWHC 3068 (Comm); [2015] 2 All ER (Comm) 747, [2014] 2 Lloyd’s Rep 579, [2014] 2 CLC 503, [2015] Lloyd’s Rep IR 54, QBD������������������������������������������������������������������������������������   11.98 Starside Properties v Mustapha [1974] 1 WLR 816, [1974] 2 All ER 567, (1974) 28 P & CR 95, (1974) 118 SJ 388, CA�������������������������������������������������������������������������������   29.24 Startup v Macdonald, 134 ER 1029, (1843) 6 Man & G 593, Ct of Comm Pleas����������������   29.15 Steedman v Drinkle [1916] 1 AC 275, Pc (Can)��������������������������������������������������������������������   29.24 Stein v Stein [2004] EWHC 3212 (Ch), Ch D�����������������������������������������������������������������������   14.15 Stephen’s Application, Re (1969) 20 P & CR 513, [1969] JPL 209, LT�������������������   16.135; 22.16 Steven’s Application, Re (1963) 14 P & CR 59, LT���������������������������������������������������   16.92; 22.16, 22.17; 23.10 Stevens v Hutchinson [1953] Ch 299, [1953] 2 WLR 545, [1953] 1 All ER 699, (1953) 97 SJ 171, Ch D�����������������������������������������������������������������������������������������������������   14.18; 16.5 Stevens v Ismail [2016] UKUT 43 (LC), [2016] L & TR 21, LC�����������������������������������������  1.10 Stevens v Willing & Co Ltd [1929] WN 53���������������������������������������������������������������������������  11.142 Stilwell v Blackman [1968] Ch 508, [1967] 3 WLR 1397, [1967] 3 All ER 514, (1967) 111 SJ 413, Ch D��������������������������������������������������������������������������  6.64, 6.71, 6.73, 6.78, 6.91, 6.98, 6.100, 6.104, 6.106; 7.4 Stockport Metropolitan Borough Council v Alwiyah Developments (1986) 52 P & CR 278, CA�������������������������������������������������������������������������   1.29, 1.30; 11.120; 20.18, 20.19, 20.26, 20.40, 20.84, 20.86, 20.92; 22.17; 23.6, 23.7, 23.10, 23.12, 23.29, 23.30, 23.31, 23.32, 23.36, 23.40, 23.41, 23.42; 24.107, 24.143 Stokes v Cambridge Corp (1962) 13 P & CR 77, (1961) 180 EG 839, LT��������������   13.015; 20.19; 23.19, 23.32 Storer v Great Western Railway Company, 63 ER 21, (1842) 2 Y & C. Ch 48 Ct of Chancery������������������������������������������������������������������������������������������������������������������������  30.6 Strand Music Hall Co Ltd, Re, 55 ER 853, (1865) 35 Beav 153, Ct of Chancery����������������   15.22 Stromdale & Ball Ltd v Burden [1952] Ch 223, [1952] 1 All ER 59, [1951] 2 TLR 1192, Ch D�������������������������������������������������������������������������������������������������������������������������������    3.4 Stuart v Diplock (1889) 43 Ch D 343, (1890) 59 LJ Ch 142, CA�����������������������������������������  11.177 Sturges v Bridgman (1879) 11 Ch D 852, (1879) 43 JP 716, (1879) 48 LJ Ch 785, (1879) 41 LT 219, CA����������������������������������������������������������������������������������������������������  11.239 Sugarman v Porter [2006] EWHC 331 (Ch), [2006] 2 P & CR 14, [2006] 11 EG 195 (CS), Ch D����������������������������������������������������������������������������������������������   6.81, 6.87; 7.33, 7.38, 7.40 Sunnyfield, Re [1932] 1 Ch 79, (1957) 7 P & CR 293, Ch D����������������������������  14.21, 14.25, 14.30 Surana’s Application, Re [2016] UKUT 368, LC������������������������������������������������������������������  16.108 Surrey CC and Mole DC v Bredero Homes Ltd [1992] 3 All ER 302, (1992) 64 P & CR 57, [1993] 03 EG 112, [1991] EG 127 (CS), [1991] NPC 125, Ch D���������������������������������  25.3 Surrey CC and Mole DC v Bredero Homes Ltd [1993] 1 WLR 1361, [1993] 3 All ER 705, [1993] 25 EG 141, [1993] EG 77 (CS), (1993) 137 SJLB 135, [1993] NPC 63, CA����������������������������������������������������������������������������������������  13.103, 13.107, 13.187, 13.188; 30.5, 30.27, 30.38 Sutton & East Surrey Water plc’s Application, Re [2017] UKUT 248, LC���������������������������  6.40 Swainland Builders v Freehold Properties [2002] EWCA Civ 560, [2002] 2 EGLR 71, [2002] 23 EG 123, [2002] 17 EG 154 (CS), CA�����������������������������������������������������������   11.27 Swatman v Ambler, 155 ER 1264, (1852) 8 Ex 72, Ct of Exchequer�����������������������������������  26.3 Sykes v Williams [1932] 2 Ch 190, Ch D���������������������������������������������������������������������  29.24, 29.42 System Floors Ltd v Ruralpride Ltd [1995] 1 EGLR 48, [1995] 07 EG 125, [1994] EG 162 (CS), [1994] NPC 127, (1995) 69 P & CR D18, CA����������������������������������������������   15.13

T

T Lucas & Co Ltd v Mitchell [1974] Ch 129, [1972] 3 WLR 934, [1972] 3 All ER 689, (1972) 116 SJ 711, CA���������������������������������������������������������������������������������������������������  6.48 Taddy & Co v Sterious & Co [1904] 1 Ch 354, Ch D�����������������������������������������������������������    Int Tailby v Official Receiver (1888) 13 App Cas 523, HL���������������������������������������������������������    Int Tailors of Aberdeen v Coutts (1834) 13 S 226, CSIH�����������������������������������������������������������   33.10 Taite v Gosling (1879) 11 Ch D 273, Ch D�����������������������������������������������   6.1; 11.39; 27.16, 27.33 Tamares (Vincent Square) Ltd v Fairpoint Properties (Vincent Square) Ltd [2007] EWHC 212 (Ch), [2007] 1 WLR 2167, [2007] 1 EGLR 26, [2007] 14 EG 106, [2007] 7 EG 143 (CS), Ch D��������������������������������������������������������������������������������������������������������������  13.106 Tanfern Ltd v Cameron-MacDonald [2000] 1 WLR 1311, [2000] 2 All ER 801, [2001] CP Rep 8, [2000] 2 Costs LR 260, (2000) 97(24) LSG 41, CA������������������������������������  24.109 Tarhale Ltd’s Application, Re (1990) 60 P & CR 368, LT���������������������  20.26, 20.42, 20.50, 20.51

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Table of Cases Taroad’s Application, Re (1957) 7 P & CR 42, 158 EG 262, LT�����������������������   16.5, 16.18; 17.11, 17.24, 17.25, 17.31 Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd [1982] QB 133, [1981] 2 WLR 576, [1981] 1 All ER 897, [1981] Com LR 34, (1979) 251 EG 159, Ch D�����������������������������������������������������������������������������������������������������  13.124, 13.153, 13.154 Taylor v London & County Banking Co [1901] 2 Ch 231, CA����������������������������������������  9.18, 9.19 Taylor’s Application, Re (1965) 16 P & CR 169, 189 EG 753, [1964] JPL 351, 114 LJ 192, LT����������������������������������������������������������������������������������������������������  16.63, 16.108 Tea Trade Properties Ltd v CIN Properties Ltd [1990] 1 EGLR 150, [1990] 22 EG 67, [1990] EG 9 (CS), Ch D������������������������������������������������������������������������������������������������   11.15 Teagle Application, Re; Sparkes Application, Re (1963) 14 P & CR 68, 183 EG 143, [1962] JPL 552, LT�����������������������������������������������������������������������������������������������   16.106; 22.6, 22.13 Tendler v Sproule [1947] 1 All ER 193, CA�������������������������������������������������������������  11.208, 11.209 Tesco Stores Ltd v Secretary of State for the Environment [1995] 1 WLR 759, [1995] 2 All ER 636, 93 LGR 403, (1995) 70 P & CR 184, [1995] 2 PLR 72, [1995] 2 EGLR 147, [1995] 27 EG 154, [1995] EG 82 (CS), (1995) 92(24) LSG 39, (1995) 145 NLJ 724, (1995) 139 SJLB 145, HL����������������������������������������������������������������������������������������������   32.25 Texaco Antilles Ltd v Kernochan [1973] AC 609, [1973] 2 WLR 381, [1973] 2 All ER 118, (1973) 117 SJ 146, PC (Bah)��������������������������������������������   1.8; 8.18, 8.22, 8.78, 8.111, 8.119; 11.8, 11.174; 15.19, 15.21, 15.22, 15.24 Thames Valley Holdings Ltd, Re [2011] UKUT 325 (LC), [2012] JPL 66, LC����������   20.97; 24.48 Thames Valley Holdings Ltd v National Trust for Places of Historic Interest or Natural Beauty [2012] EWCA Civ 1019, [2012] 5 Costs LO 630, [2012] RVR 344, CA����������������������������������������������������������������������������������������������������  24.132, 24.136 Thames Water Utilities v Oxford City Council (1999) 1 LGLR 291, [1999] 1 EGLR 167, [1998] EG 133 (CS), (1998) 95(31) LSG 37, (1999) 77 P & CR D16, Ch D����������������������������������������������������������������������������������������������������������  10.46, 10.50, 10.52, 10.53, 10.55 Thameside Estates Ltd v Greater London Council (1977) 249 EG 346��������������������������������   20.93 Thamesmead Town Ltd v Allotey (1998) 30 HLR 1052, (2000) 79 P & CR 557, [1998] 3 EGLR 97, [1998] 37 EG 161, (1998) 95(3) LSG 26, (1998) 76 P & CR D20, CA�����������������������������������������������������������������������������������������������������  29.80, 29.81, 29.82 Thomas Bates & Son v Wynhams Ltd [1981] 1 WLR 505, [1981] 1 All ER 1077, (1981) 41 P & CR 345, (1980) 257 EG 381, (1981) 125 SJ 32, CA����������������������������������������������   11.27 Thomas v Hayward (1869) LR 4 Exch 311, Ct of Exchequer�����������������������������������������������  1.27 Thomas’s Application, Re [2011] UKUT 128 (LC), [2012] JPL 1139, LC��������������������������  16.108 Thorn v Madden [1925] Ch 847, Ch D��������������������������������������������������������  11.206, 11.208, 11.229 Thornewell v Johnson (1881) 50 LJ Ch 641������������������������������������������������������������������������  11.47 Three Rivers District Council v Bank of England [1996] QB 292, [1995] 3 WLR 650, [1995] 4 All ER 312, [1995] CLC 99, CA���������������������������������������������������������������������    Int Tichborne v Weir [1891-94] All ER Rep 449, 67 LT 735�������������������������������������   1.51; 9.69; 11.47 Tilley v Thomas (1867-68) LR 3 Ch App 61, CA�����������������������������������������������������������������  30.6 Tillotsons’ Application (2008) LP/56/2006���������������������������������������������������������������������������   20.26 Tiltwood, Sussex, Re [1978] Ch 269, [1978] 3 WLR 474, [1978] 2 All ER 1091, (1978) 36 P & CR 397, (1978) 122 SJ 573, Ch D������������������������������   1.8; 8.22; 14.22, 14.30, 14.33; 15.20, 15.21 Tindall v Castle [1893] WB 40�������������������������������������������������������������������������������������������  8.5, 8.60 Tipping v Eckersley, 69 ER 779, (1855) 2 Kay & J 264, Ct of Chancery���������  13.32, 13.39, 13.40 Tithe Redemption Commission v Runcorn UDC [1954] Ch 383, [1954] 2 WLR 518, [1954] 1 All ER 653, (1954) 118 JP 265, 52 LGR 231, (1954) 98 SJ 212, CA������������  1.53 Tito v Waddell [1977] Ch 106, [1977] 2 WLR 496, [1977] 3 All ER 129, (1976) 121 SJ 10, Ch D�����������������������������������������������������������������������������������   13.10, 13.11; 29.72, 29.73, 29.74, 29.77, 29.84, 29.85, 29.86, 29.87, 29.88; 30.5, 30.19, 30.27 Tod-Heatly v Benham (1888) 40 Ch D 80, CA�������������������������������������������  11.127, 11.129, 11.136 Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd [1902] 2 KB 660, CA����������������������������������������������������������������������������������������������������������������    Int Tompkins v Rogers [1921] 2 KB 94, KBD������������������������������������������������������������������������  11.229 Tophams Ltd v Earl of Sefton [1967] 1 AC 50, [1966] 2 WLR 814, [1966] 1 All ER 1039, (1966) 110 SJ 271, HL�����������������������������������������������������������������  11.58, 11.66, 11.77, 11.127, 11.240; 13.38, 13.40; 28.11 Torbay Hotel Ltd v Jenkins [1927] 2 Ch 225, Ch D������������������������������������������������  8.38, 8.39, 8.51 Towner’s and Goddard’s Application, Re (1989) 58 P & CR 316, LT�����������������������   16.86; 17.16, 17.18; 19.44 Trenchard, Re [1902] 1 Ch 378, Ch D�����������������������������������������������������������������������������������  6.48

lxiii

Table of Cases Truman, Hanbury, Buxton & Co’s Application, Re [1956] 1 QB 261, [1955] 3 WLR 704, [1955] 3 All ER 559, (1957) 7 P & CR 348, (1955) 99 SJ 796, CA��������������������   18.5; 19.24, 19.25, 19.26,19.30, 19.32, 19.39; 24.107 TRW Steering Systems v North Cape Properties and Cornerstone Estates (1995) 69 P & CR 265, CA�������������������������������������������������������������������������������������   16.22, 16.30; 29.109 Tubbs v Esser (1909) 26 TLR 14�������������������������������������������������������������������������������������������  13.120 Tucker v Vowles [1893] 1 Ch 195, Ch D����������������������������������������������������������������  8.33, 8.37, 8.65, 8.68, 8.76, 8.79 Tulk v Moxhay, 41 ER 1143, (1848) 2 Ph 774, (1848) 18 LJ Ch. 83, Ch D��������������  1.3, 1.6, 1.10, 1.16, 1.17, 1.18, 1.20, 1.26, 1.27; 6.51; 8.7, 8.105, 8.115, 8.116; 11.67, 11.76, 11.77; 13.28; 16.36; 26.8; 28.5, 28.7; 33.11 Turner v Pryce [2008] RVR 165, [2008] 1 P & CR DG 20, Ch D��������������������������  13.144, 13.162, 13.164, 13.166; 16.54 Turner’s Application, Re (2005) LP/45/2003������������������������������������������������������������������������   20.84 Tweddle v Atkinson, 121 ER 762, (1861) 1 B & S 393, Ct of QB����������������������������������������    Int Twiname’s Application, Re (1972) 23 P & CR 413, LT�������������������������������������������   11.158; 20.26, 20.58, 20.84

U

Union of London & Smith’s Bank Ltd’s Conveyance, Re [1933] Ch 611, 89 ALR 797, CA�����������������������������������������������������������  6.7, 6.15, 6.22, 6.28, 6.34, 6.51, 6.53, 6.57, 6.68, 6.70, 6.76, 6.98, 6.100; 7.3, 7.7, 7.10, 7.12; 27.11, 27.26 University of Chester’s Application, Re [2016] UKUT 457, LC����������������������������   11.231, 11.242; 19.61; 20.70 University of East London Higher Education Corp v Barking and Dagenham LBC (Costs) [2004] EWHC 2908 (Ch), [2005] Ch 354, [2005] 2 WLR 1334, [2005] 3 All ER 416, [2005] 2 Costs LR 287, Ch D�������������������������������������������   14.33; 15.25A; 25.6 University of Westminster’s Application, Re (1997) 74 P & CR 86, [1997] 1 EGLR 191, [1997] 22 EG 147, LT�������������������������������������������������������������������������������   16.61; 17.20; 24.32 University of Westminster’s Application, Re [1998] 3 All ER 1014, (1999) 78 P & CR 82, [1999] RVR 8, [1998] EG 118 (CS), (1998) 95(33) LSG 33, (1998) 142 SJLB 245, [1998] NPC 120, (1998) 76 P & CR D44, CA�����������������������������   16.57, 16.61, 16.66; 17.20; 20.16; 21.13; 24.32 Urban Housing Co Ltd v Oxford City Council [1940] Ch 70, [1939] 4 All ER 211, CA����������������������������������������������������������������������������������������������������������   11.144; 13.3

V

Vaizey’s Application, Re (1974) 28 P & CR 517, LT�����������������������������������������   16.5; 20.40, 20.81 Vernon v Smith, 106 ER 1094, (1821) 5 B & Ald 1, Ct of KB���������������������������������������������  29.102 Vertical Properties Ltd v New Hampstead Garden Suburb Trust Ltd [2010] UKUT 51 (LC), [2010] JPL 793, LC���������������������������������������������������������������������������������   16.108; 20.26, 20.96 Victoria Recreation Ground, Portslade’s Application, Re (1979) 41 P & CR 119, LT����������  8.22 Villar, Re [1929] 1 Ch 243, CA��������������������������������������������������������������������������������������  29.5, 29.52 Viscount Chelsea v Muscatt [1990] 35 EG 63, [1990] WL 754255, CA������������������������������   13.44 Voice v Bell (1994) 68 P & CR 441, [1993] EG 128 (CS), [1993] NPC 105, CA����������������  6.10

W

Waggot v Yip [2017] UKUT 108, LC������������������������������������������������������������������������������������   19.59 Wahab v Khan [2011] EWHC 908, Ch D������������������������������������������������������������������������������   24.67 Wake’s Application, Re (2002) LP/2/2001������������������������������������������������������������������   20.26; 22.16 Wakeham v Wood (1982) 43 P & CR 40, [1982] JPL 242, (1981) 125 SJ 608, CA������������������������������������������������������������������������������������������������   11.31; 13.47, 13.89 Walker v Kenley [2008] EWHC 370 (Ch), [2008] 1 P & CR DG21, Ch D��������������������������  11.244 Walker, Re [2010] UKUT 16, LC������������������������������������������������������������������������������������������   20.26 Wallace and Co’s Application, Re (1993) 66 P & CR 124, [1993] JPL 690, LT����������  20.26, 20.74 Wallersteiner v Moir (No 1) [1974] 1 WLR 991, [1974] 3 All ER 217, (1974) 118 SJ 464, CA���������������������������������������������������������������������������������������������������������������������   13.13 Walsh v Lonsdale (1882) 21 Ch D 9, CA������������������������������������������������������������������������������  1.51 Waltham Forest LBC v Oakmesh Ltd [2009] EWHC 1688 (Ch), [2010] JPL 249, Ch D����������������������������������������������������������������������������������������������������������������������  32.55, 32.58

lxiv

Table of Cases Walthamstow Building Society v Davies (1990) 22 HLR 60, (1990) 60 P & CR 99, CA���������   15.10 Wandsworth Board of Works v United Telephone Co (1884) 13 QBD 904, CA������������������  1.53 Ward v Paterson [1929] 2 Ch 396, Ch D�������������������������������������������������������������������������������  11.172 Wards Construction (Medway) Application, Re (1973) 25 P & CR 223, LT������������������������   20.26 Warner Bros Pictures Inc v Nelson [1937] 1 KB 209, [1936] 3 All ER 160, KBD���������������   13.38 Watson’s Application, Re (1966) 17 P & CR 176, [1966] JPL 347, LT���������������������   16.29, 16.95; 22.17; 23.53 Waughton v Coppard [1899] 1 Ch 92, Ch D����������������������������������������������������   8.5; 11.132, 11.246 Webb v Fagotti Bros (1898) 79 LT 683, CA������������������������������������������������������   8.94; 11.72, 11.73, 11.137, 11.156, 11.222, 11.223, 11.224, 11.225 Webb v Hewitt, 69 ER 1181, (1857) 3 Kay & J 438, Ct of Chancery�����������������������������������   15.13 Webb v Russell, 100 ER 639, (1789) 3 Term Rep 393, Ct of KB��������������������������������  27.13, 27.31 Webb’s Lease, Re [1951] Ch 808, [1951] 2 All ER 131, [1951] 2 TLR 530, (1951) 95 SJ 367, CA ���������������������������������������������������������������������������������������������������������������    Int Weeks v Thames Water Authority (40/1979) (1980) 39 P & CR 208, (1979) 252 EG 280, [1979] JPL 774, LT��������������������������������������������������������������������������������������������������������   20.93 Wells v Attenborough (1871) 24 LT 312�������������������������������������������������������������������������������  11.253 Wells v Maxwell (No 1), 55 ER 160, (1863) 32 Beav 408 Ct of Chancery��������������������������  30.6 Wembley Park Estate Co Ltd’s Transfer, Re [1968] Ch 491, [1968] 2 WLR 500, [1968] 1 All ER 457, (1968) 112 SJ 152, Ch D���������������������������������������������������������������  14.26, 14.27 Wesson’s Application, Re (1964) 15 P & CR 109, 187 EG 435, [1963] JPL 614, LT����������   22.16 West v Blakeway, 133 ER 940, (1841) 2 Man & G 729, Ct of Comm Pleas������������������������   15.13 West v Williams [1899] 1 Ch 132, CA����������������������������������������������������������������������������������   29.58 Western v MacDermott (1866) LR 1 Eq 499, Ct of Chancery, affd (1866–67) LR 2 Ch App 72, CA�������������������������������������������������������������������������������   1.16, 1.51; 8.9, 8.27, 8.38, 8.50; 8.71, 8.81, 8.94, 8.96; 11.31, 11.146; 13.159, 13.160 Western v Macdermott (1866–67) LR 2 Ch App 72, CA������������������������������������������������������  11.146 Westhoughton UDC v Wigan Coal & Iron Co Ltd [1919] 1 Ch 159, CA�����������������������  6.1, 11.39, 11.42; 27.16, 27.16; 29.72, 29.73 Westminster City Council v Duke of Westminster (1992) 24 HLR 572, CA������������������������   16.47 Westminster City Council v Duke of Westminster [1991] 4 All ER 136, (1991) 23 HLR 174, [1990] EG 146 (CS), Ch D������������������������������������������������������������������   1.10; 16.34, 16.35, 16.115 Westminster City Council v Haymarket Publishing Ltd [1981] 1 WLR 677, [1981] 2 All ER 555, 80 LGR 528, (1981) 42 P & CR 29, (1981) 258 EG 641, [1981] JPL 751, (1981) 125 SJ 220, CA����������������������������������������������������������������������������������  29.63, 29.70 Whatman v Gibson, 59 ER 333, (1838) 9 Sim 196, Ct of Chancery���������������������������   8.5, 8.6, 8.7; 11.137, 11.233 Wheeler v JJ Saunders Ltd [1996] Ch 19, [1995] 3 WLR 466, [1995] 2 All ER 697, [1995] Env LR 286, [1994] EG 209 (CS), [1995] NPC 4, CA���������������������������   10.96; 19.38, 19.65, 19.70 White (Marion) v Francis [1972] 1 WLR 1423, [1972] 3 All ER 857, (1972) 116 SJ 822, CA���������������������������������������������������������������������������������������������������������������������   13.22 White v Bijou Mansions Ltd [1937] Ch 610, [1937] 3 All ER 269, Ch D������������������� Int; 3.4; 4.5; 8.66, 8.68, 8.82, 8.102, 8.113; 9.48 White v Damon, 32 ER 13, (1802) 7 Ves Jr 30, Ct of Chancery�������������������������������������������  30.6 Whitehouse v Hugh [1906] 2 Ch 283, CA����������������������������������������������������������������������  8.98, 8.100 Whitgift Homes Ltd v Stocks [2001] EWCA Civ 1732, [2001] 48 EG 130 (CS), [2001] NPC 169, CA�����������������������������������������������������������������������������   1.37; 6.19; 8.22, 8.40, 8.42, 8.45, 8.54, 8.74, 8.94 Whiting’s Application, Re (1989) 58 P & CR 321, [1989] EG 3 (CS), LT���������������������������  20.6 Whiting’s Application, Re (1989) 58 P & CR 321, [1989] EG 3 (C.), LT����������������������������   21.12 Wickenden v Thomas Webster, Katherine Elder and Fanny Elder, 119 ER 909, (1856) 6 El & Bl 387, Ct of QB�����������������������������������������������������������������������������������  11.229, 11.246 Wickin’s Application, Re, 183 EG 541, [1962] RVR 571, CA��������������������������   11.3; 16.62, 16.65, 16.84, 16.88; 24.107, 24.109 Wickins Application, Re (1962) 13 P & CR 227, 181 EG 259, [1962] JPL 118, LT������������   16.26 Wigram v Buckley [1894] 3 Ch 483, CA������������������������������������������������������������������������������   11.69 Wigsell v School for the Indigent Blind Corp (1882) 8 QBD 357, QBD�����������������������  25.3, 30.37 Wild Duck Ltd v Smith [2017] EWHC 1252 (Ch), Ch D������������������������������������������������������  11.136

lxv

Table of Cases Wildtree Hotels Ltd v Harrow London Borough Council [2001] 2 AC 1, [2000] 3 WLR 165, [2000] 3 All ER 289, [2000] BLGR 547, (2001) 81 P & CR 9, [2000] 2 EGLR 5, [2000] RVR 235, [2000] EG 80 (CS), (2000) 97(28) LSG 31, (2000) 150 NLJ 984, [2000] NPC 71, (2001) 81 P & CR DG9, HL�������������������������������������������������������  10.39, 10.42 Wilkes v Spooner [1911] 2 KB 473, CA������������������������������������������������������������������������������  9.7, 9.8 Wilkinson v Kerdene Ltd [2013] EWCA Civ 44, [2013] 2 EGLR 163, [2013] 7 EG 98 (CS), [2013] 1 P & CR DG19, CA��������������������������������������������������������������������������������   29.83 Willé v St John [1910] 1 Ch 325, CA��������������������������������������������������������������������������   8.22; 11.156 William Aldred’s Case, 77 ER 816, (1610) 9 Co Rep 57, Ct of KB��������������������������������������   11.31 William Brandts Sons & Co v Dunlop Rubber Co Ltd [1905] AC 454, HL����������������������  Int; 7.11 Williams and Others v Earl of Jersey, 41 ER 424, (1841) Cr & Ph 91, Ct of Chancery�������   13.49 William’s Application under Section 84 of the Law of Property Act 1925, Re [2017] UKUT 341, LC�����������������������������������������������������������������������������������������������������  20.26, 20.28 Williams‘ Application, Re (1988) 55 P & CR 400, LT������������������������������������������������   20.26; 22.16 Williams v Atlantic Assurance Co Ltd [1933] 1 KB 81, (1932) 43 Ll L Rep 177, CA�����������������������������������������������������������������������������������������������������������   7.11; 13.30 Williams v Greatrex [1957] 1 WLR 31, [1956] 3 All ER 705, (1957) 101 SJ 43, CA����������  30.6 Williams v Kiley (t/a CK Supermarkets Ltd) (No.1) [2002] EWCA Civ 1645, [2003] L & TR 20, [2003] 1 EGLR 46, [2003] 06 EG 147, [2002] 49 EG 122 (CS), (2003) 100(4) LSG 32, (2002) 152 NLJ 1809, (2002) 146 SJLB 270, [2002] NPC 149, [2003] 1 P & CR DG20, CA����������������������������������������������������������������  11.180, 11.181, 11.182 Williams v Kiley (t/a CK Supermarkets) (No 2) [2004] EWCA Civ 870, CA����������������������  11.185 Williams v Unit Construction Co Ltd (1955) 19 Conv (NS) 262���������������������������  6.66, 6.67, 6.69, 6.73, 6.78, 6.90; 28.11 Willis, Re [1997] 6 P&CR 97�������������������������������������������������������������������������   16.108; 20.26, 20.95 Wills v Adams (1908) 25 TLR 85������������������������������������������������������������������������������������������  11.176 Willson v Leonard, 49 ER 146, (1840) 3 Beav 373, Ct of Chancery������������������������������������  26.3 Wilson v Furness Railway Co (1869-70) LR 9 Eq 28, Ct of Chancery���������������������������������   30.13 Wilson v Hart (1866) 1 Ch App 463, CA������������������������������������������������   1.16; 11.47, 11.59; 13.52 Wilson v Northampton and Banbury Junction Railway Co (1873–74) LR 9 Ch App 279, CA�������������������������������������������������������������������������������������������  30.5, 30.19, 30.31 Wilson’s Application, Re (1954) 164 EG 269�����������������������������������������������������������������������  19.5 Wimpey Homes Holdings v Secretary of State for the Environment and Winchester City Council [1993] 2 PLR 54, [1993] JPL 919���������������������������������������������������  32.43, 32.51 Windsor Hotel (Newquay) v Allan [1981] JPL 274, CA�������������������������������������������������������  11.145 Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173, [1947] 2 All ER 331, 63 TLR 529, [1947] LJR 1422, 177 LT 349, (1947) 91 SJ 504, HL������������������������������������������������������������������������������������������������������� Int; 1.51; 16.30 Winter v Traditional & Contemporary Contracts Ltd [2006] EWCA Civ 1740, [2007] 2 All ER 343, [2007] RVR 122, [2007] 3 EG 124 (CS), CA���������������  24.130, 24.131, 24.133 Winter v Traditional & Contemporary Contracts Ltd [2007] EWCA Civ 1088, [2008] 1 EGLR 80, [2008] 3 EG 180, [2007] RVR 353, [2008] JPL 1011, [2007] 46 EG 177 (CS), (2007) 104(45) LSG 30, [2007] NPC 117, CA������������������������������ 16.128; 20.92; 23.14, 23.36 Wolverhampton Corp v Emmons [1901] 1 QB 515, CA�������������������������������������������������������  30.7 Wood v Cooper [1894] 3 Ch 671, Ch D�����������������������������������������  11.132, 11.135, 11.139, 11.144 Woodhouse, Re [2010] UKUT 235, LC��������������������������������������������������������������������������������   16.55 Worsley v Swann (1882) 51 LJ Ch 576��������������������������������������������������������������������  11.155, 11.227 Wreford’s Application, Re (1957) 7 P & CR 257, [1956] JPL 454, LT��������������������������������   19.15 Wright v Berry (1903) 19 TLR 259���������������������������������������������������������������������������������������  11.226 Wright v Dean [1948] Ch 686, [1948] 2 All ER 415, 64 TLR 467, [1948] LJR 1571, (1948) 92 SJ 393, Ch D��������������������������������������������������������������������������������������������������   8.115 Wrighton’s Application, Re (1962) 13 P & CR 189, 177 EG 367, [1961] JPL 189, LT����������������������������������������������������������������������������������   1.44; 16.26, 16.110, 16.118 Wroth v Tyler [1974] Ch 30, [1973] 2 WLR 405, [1973] 1 All ER 897, (1973) 25 P & CR 138, (1972) 117 SJ 90, Ch D�����������������������������������������������������   13.79, 13.101, 13.109; 30.18, 30.19, 30.21, 30.23, 30.24, 30.25 Wrotham Park Estate Co v Parkside Homes Ltd [1974] 1 WLR 798, [1974] 2 All ER 321, (1974) 27 P & CR 296, (1973) 118 SJ 420, Ch D������������������������  1.26, 1.27, 1.31, 1.37, 1.41, 1.42, 1.48, 1.52; 6.42, 6.47; 11.79, 11.90, 11.107, 11.160, 11.163; 13.22, 13.39, 13.55, 13.89, 13.91, 13.92, 13.104, 13.109; 14.3; 20.65; 23.28, 23.29, 23.38; 30.21, 30.22, 30.24

lxvi

Table of Cases Wrotham Park Settled Estates v Hertsmere Borough Council [1993] 2 EGLR 15, [1993] 27 EG 124, [1993] RVR 56, [1994] JPL 832, [1993] NPC 48, CA������������������������������������   10.78 Wrotham Park Settled Estates v Naylor (1991) 62 P & CR 233, [1991] 1 EGLR 274, Ch D�������������������������������������������������������������������������������������������������������������������������������  11.204 Wycombe DC v Williams [1995] 3 PLR 19, [1995] EG 83 (CS), QBD�������������������������������  32.9 Wyllie v Pollen, 46 ER 767, (1863) 3 De GJ & S 596, Ct of Chancery��������������������������������  9.18 Wynyates Smith’s Application, Re (1964) 15 P & CR 85, 185 EG 720, [1963] JPL 269, LT��������������������������������������������������������������������������������������������������������������������   16.92

Y

Yogmin v Heath [1974] 1 WLR 135, [1974] 1 All ER 461, (1973) 26 P & CR 570, (1973) 117 SJ 795, CA���������������������������������������������������������������������������������������������������    9.1 Young v Bristol Aeroplane Co Ltd [1944] KB 718, [1944] 2 All ER 293, (1945) 78 Ll L Rep 6, CA�����������������������������������������������������������������������������������������������������������������������   23.37

Z

Zenios v Hampstead Garden Suburb Trust Ltd. See Zenios, Re Zenios, Re [2010] UKUT 260, LC���������������������������������������������������������������   16.104, 16.108; 20.96 Zenios, Re; sub mom Zenios v Hampstead Garden Suburb Trust Ltd [2011] EWCA Civ 1645, CA������������������������������������������������������������������������������������������������   16.105, 16.108; 18.4; 20.26, 20.34; 21.17; 22.10 Zetland v Hislop. See Earl of Zetland v Hislop Zetland, Marquess of v Driver. See Marquess of Zetland v Driver Zopat Developments Application, Re (1967) 18 P & CR 156, 119 EG 941, [1966] JPL 589, LT����������������������������������������������������������������������������������������������������������   20.26; 22.16

lxvii

lxviii

Introduction Covenants generally

THE DOCTRINE OF PRIVITY1 At common law, covenants2 entered into between two or more parties are, as a class, enforceable only by the parties themselves and their personal representatives.3 This doctrine of privity thus prevented enforcement of a covenant by a non-party notwithstanding that he was clearly intended to benefit from the promise.4 It also excluded the possibility of the benefit of the covenant being effectively assigned to a third party since such third party was (by definition) not a party to the deed.

MODIFICATIONS OF THE DOCTRINE OF PRIVITY In its application to covenants generally, the strict common law doctrine of privity has been modified both by rules of equity and by statute.

I: Benefit In equity, a stranger to a deed will be allowed to enforce it if, on its true construction, a trust of its benefit in his favour can be established.5 Further, 1

For an illuminating article on the early history of the doctrine, see Dr Vernon V Palmer ‘The History of Privity—The Formative Period (1500–1680)’ The American Journal of Legal History, vol XXXIII (1989). 2 The word ‘covenant’ is of venerable antiquity and it frequently appears in the English translation of both the Old and the New Testaments where it has the meaning of a solemn promise. It is not, however, as solemn as an oath, breach of which may be visited by criminal (as well as religious) sanctions. In English law it means a promise contained in a deed. 3 It may well have been otherwise with promises contained in simple contracts prior to the decision in Tweddle v Atkinson (1861) 1 B & S 393: see Dutton v Poole (1678) 2 Lev 210; but the principle of privity clearly existed in the case of contracts made by deed: see Carnegie v Waugh (1823) 2 Dow & Ry KB 277 and the judgment of Denning LJ in Drive Yourself Hire Co (London) Ltd v Strutt [1953] 3 WLR 1111, at pp 1119–1122. Naturally, in the case of a deed poll (ie a deed executed by the promisor but to which no promisee is a party), the rule of privity was qualified so as to permit the intended benficiary of the deed to enforce it: see Cooker v Child (1673) 2 Lev 74; Chelsea and Walham Green Building Society v Armstrong [1951] Ch 853 (concerning a transfer of registered land expressed to be made, and executed, only by the transferor and to which the transferee was not a party). 4 See, eg White v Bijou Mansions Ltd [1937] Ch 610, although in this case there was the additional ground (which section 56 of the Law of Property Act 1925 could do nothing to overcome) that the intended promisee was not identified at the date when the deed was executed. 5 See Gregory v Williams (1817) 3 Mer 582; Lloyd’s v Harper (1880) 16 ChD 290; Affréteurs Réunis SA v Walford [1919] AC 801; Harmer v Armstrong [1934] Ch 65.

1

Covenants generally the benefit of a covenant the performance of which does not involve personal confidence or skill6 might be the subject of an equitable assignment entitling the assignee to use the name of the assignor in enforcing the covenant.7 Such an ‘assignment’ is not, however, a true case of assignment since (as the need for joining the assignor as a party signifies) it does not create privity between the assignee and the covenantor.8 By statute, the benefit of a covenant relating to property (unless inherently non-assignable) is now assignable in a way which simulates privity between the assignee and the covenantor.9 Furthermore, an identifiable person who, by the terms of the covenant, is clearly intended to benefit,10 may enforce the covenant although not a party,11 thus placing such a person on a par with the covenantees who are actual parties and equating the position of such person with that of the intended beneficiary under a deed poll. Further, even where not identifiable at the date of the covenant, a person intended to benefit may enforce the covenant where it has been entered into on or after 11 May 2000.12 Moreover, even at common law, the non-recognition of an assignment was often readily side-stepped by the device of the intended assignee taking a letter of attorney from the covenantee authorising the assignee to sue in the covenantee’s name. In such a case, although the assignee sued and recovered as agent for the covenantee, nevertheless, as against his principal, the terms of the assignment gave him a good title to retain what he recovered.

II: Burden It will be observed, however, that all the foregoing relaxations to the strict doctrine of privity relate to the passing of the benefit of a covenant. Under them there was no corresponding relaxation in relation to the burden of a covenant.13 Accordingly, whilst the benefit could properly be recognised as a property interest in a chose in action, it could not enjoy the status of a property interest in any subject matter out of which the covenant fell to be performed. This can be illustrated by reference to two cases. In Winter Garden Theatre (London) Ltd v Millennium Productions Ltd,14 a licensee of a theatre whose 6

Ie, a covenant which amounted to a chose in action: see HW Elphinstone ‘What is a Chose in Action?’ 9 LQR 311. 7 See Tailby v Official Receiver (1888) 13 App Cas 523; William Brandts Sons & Co v Dunlop Rubber Co Ltd [1905] AC 454; Three Rivers District Council v Bank of England [1995] 4 All ER 312. 8 See Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd [1902] 2 KB 660 and Fitzroy v Cave [1905] 2 KB 364. 9 Law of Property Act 1925, section 136, re-enacting section 25(6) of the Judicature Act 1873. 10 An issue which has given rise to divergence of judicial opinion as to the correct approach: see below para 3.4(2). 11 Law of Property Act 1925, s 56, re-enacting with modifications the provisions of the Real Property Act 1845, s 5. These sections are considered in detail in Chapter 3 (para 3.3 et seq). 12 By reason of the Contracts (Rights of Third Parties) Act 1999. 13 The cases of Lucas v Commerford (1790) 3 Bro CC 166 and Flight v Bentley (1835) 7 Sim 149 decided by Lord Thurlow and V-C Shadwell respectively, which appear to recognise the assignability of the burden of covenants on the basis of the availability of the remedy of specific performance as between the assignor and the assignee (although that remedy was not shared by the covenantee), were expressly overruled in Cox v Bishop (1857) 8 De G M & G 815 on the basis of the judges’ mistaken application of the doctrine of specific performance. 14 [1948] AC 173.

2

Covenants relating to land contractual rights were threatened with premature determination was held to be entitled to an injunction as against the licensor to restrain interference with the chose in action (or licence) created by the contract. On the other hand, in Clore v Theatrical Properties Ltd,15 where an assignee of the lessor of a theatre (the claimant) sought to prevent the lessor assignee (the defendant) from exercising similar rights, the Court of Appeal held that the defendant could not prevent this—the licence did not create a proprietary interest in the theatre and so it could not bind the assignee of the licensor.16 In relation to chattels, there has (with one common law and one statutory exception17) been no relaxation of the rule that the burden of a covenant relating to the chattels cannot bind a successor in title of the chattels. Thus, attempts by manufacturers (prior to the passing of the Fair Trading Act 1973) to impose price maintenance agreements on retailers who were not parties to them, signally failed.18

COVENANTS RELATING TO LAND However, in the case of covenants relating to land, the law has made significant departures from the doctrine of privity in recognising that certain categories of such covenants may have greater-than-contractual enforceability by and against third parties.19

15 16

[1936] 3 All ER 483. There is no reason why the benefit of a licence should not, in principle, be assignable although whether it is capable of assignment no doubt depends upon the construction of the particular licence. It may be that (unlike a proprietary interest such as an option which is presumed to be assignable unless the contrary appears: see Re Button’s Lease [1964] Ch 263), a licence will be presumed to be non-assignable unless the contrary appears. This is, however, by no means certain and it is noteworthy that in all the precedents of licences appearing in the precedents volumes of The Conveyancer and Property Lawyer an express provision appears declaring that the licence is personal and non-assignable. In an illuminating article in The Conveyancer and Property Lawyer vol 16, p 323 at 343, Professor Crane concludes that ‘the assignability of licences must, it seems, depend on the nature of the particular licence. Probably most licences involving full occupation or possession will be personal in character, but the benefit of commercial licences—such as the advertising arrangements in Re Webb’s Lease [1951] Ch 808 – ought to be assignable’. 17 The common law exception relates to the anomalous position of a charterparty of a ship having been held to be binding upon a subsequent owner of the ship: Lord Strathcona SS Co v Dominion Coal Co [1926] AC 108; De Mattos v Gibson (1858) 4 De G & J 276; Messageries Imperiales Co v Baines (1863) 7 LT 763. The statutory exception relates to the case of documents of title relating to the property of another where the person retaining them gives an acknowledgment in writing of the right of that other to production and an undertaking for their safe custody: see, now, the Law of Property Act 1925, section 64. Under subsections (2) and (9), the obligations to produce and keep the documents safe are binding upon each individual possessor of the documents as long as he has ‘possession or control’ thereof. These provisions re-enacted earlier statutory provisions which, in turn, embodied rules which had been established at common law. It is to be noted, however, that although title deeds are now treated by the law as chattels, they were, at common law, regarded as part of the land (since they devolved on the heir with such land) and were thus originally treated as realty. Lord Coke referred to them as ‘the sinews of the land’. 18 See Elliman Sons & Co v Carrington & Son Ltd [1901] 2 Ch 275; Taddy & Co v Sterious & Co [1904] 1 Ch 354; McGruther v Pitcher [1904] 2 Ch 306. 19 By ‘third parties’ is meant persons who were neither parties nor privy (by reason of devolution on death or by operation of law) to the covenant.

3

Covenants generally It is this feature of greater-than-contractual enforceability (where it exists) which invests covenants relating to land with the character of rights in the subject matter20 to which they relate, ie the status of property rights; and this, in turn, occasions the need to consider such covenants as a separate species—if not, indeed, as a genus in their own right.21 Precisely how far covenants relating to land are capable of having greater-­thancontractual enforceability, and how far they enjoy the status of property rights, depends upon the particular category into which they fall. These categories are as follows. Covenants relating to land

Covenants entered into between landlord and tenant

Where there is privity of estate

Where there is no privity of estate

Covenants not entered into between landlord and tenant

Restrictive covenants (ie covenants restrictive of the user of land)

Covenants which are not restrictive covenants

Positive covenants

Negative covenants not being restrictive covenants

Of the above categories, covenants entered into between landlord and tenant where there is privity of estate between the parties lie, for the most part, outside the scope of this volume.22 But in the case of covenants in leases which cannot be enforced under the doctrine of privity of estate,23 the rules which apply are substantially the same as the corresponding rules in the case of freehold covenants (although not identical).24

20

The term ‘subject matter’, although seemingly pedantic, is used advisedly. Whilst it is tempting to refer to rights in ‘land’, to do so would confuse the issue. As will be seen later in this volume, the subject matter against which covenants are enforceable may (in differing sets of circumstances) consist of a particular estate in land, a group of different estates or the physical land itself. Section 80(2) and (3) of the Law of Property Act 1925, refers to covenants ‘running with the land’, but gives a technical meaning to the expression in subsection (4). 21 The covenant in Clore v Theatrical Properties Ltd, above, was not within these. 22 The rules relating to enforceability as between landlord and tenant based upon privity of estate are well known and are substantially governed by Spencer’s Case (1583) 5 Co Rep 16a (in the case of assignments of the lease) and by sections 141 and 142 of the Law of Property Act 1925, replacing sections 10 and 11 of the Conveyancing Act 1881 (in the case of transfers of the reversion). 23 Eg, restrictive covenants in a head lease sought to be enforced against an underlessee and covenants in leases sought to be enforced by one lessee against another. 24 Thus, restrictive covenants in leases cannot be registered as land charges under the Land Charges Act 1972 even though they relate to land of the reversioner which is not comprised in the lease: Dartstone Ltd v Cleveland Petroleum Co Ltd [1969] 1 WLR 1807. Further, personal liability is now limited by the Landlord and Tenant (Covenants) Act 1995.

4

Covenants relating to land The categories of covenants dealt with in this book consist (in order or treatment) of the following: ●● ●● ●●

Part I deals with restrictive covenants. Part II deals with positive covenants and negative covenants which are not restrictive covenants (ie covenants which, although negative, do not restrict the use of land). Part III of the book deals with Planning Obligations under the Town & Country Planning Act 1990, the rules in relation to which are in many respects similar to the rules relating to covenants but which also have significant differences and are subject to special statutory provisions.

In Part IV, proposed reforms in relation to the law of land covenants will be considered.

5

6

Part I Restrictive covenants

8

1 Meaning of ‘restrictive covenant’ (including general consideration of requirements for transmissibility)

THE QUALITY OF TRANSMISSIBILITY 1.1 Any covenant can, of course, be enforced within the limits of the doctrine of privity of contract. Broadly speaking, in land law terms, a restrictive covenant is an obligation in a binding written agreement (usually, but not necessarily, a deed) which restricts the use that can be made of land. The term is generally used, however, to refer to such an obligation that benefits other land and is also enforceable by successors in title of the land which benefits from it and against successors in title of the land the use of which is restricted (or ‘burdened’) by it. This book is essentially concerned with freehold restrictive covenants, that is to say covenants entered into between the owners of different pieces of freehold land,1 the burden and benefit of which are capable of running with the land. Covenants between landlord and tenant have developed separately and are subject to different principles governed by the separate law of landlord and tenant. 1.2 During the course of the nineteenth century, the law relating to restrictive  covenants entered into between freeholders developed so that such covenants came to have a degree of enforceability going far beyond the limits allowed by the rules of privity of contract. Ultimately, the restrictive covenant became much more than a mere personal right and became that of a fully-fledged equitable interest in land. In the course of this development a number of technical requirements were evolved which a restrictive covenant has to satisfy in order for the benefit and burden to be transmissible. A full account of these as they now stand will be given in this book. Before considering these requirements in detail, however, it will assist in getting them into legal perspective, and in the understanding of them, to look briefly at the history of their development. 1

And between leaseholders of different pieces of land, eg where the lessee of Land A covenants with the lessee of Land B not to use land A in a certain way.

9

1.3  Meaning of ‘restrictive covenant’ etc

THE DEVELOPMENT OF THE RULES RELATING TO TRANSMISSIBILITY 1.3 The decision in Tulk v Moxhay2 is generally seen as the effective starting point. Though there had been earlier cases along the same lines,3 in Tulk v Moxhay the courts of equity (in which Cottenham LC upheld the injunction of the Vice-Chancellor) clearly recognised the greater than contractual enforceability of the restrictive covenant. The task which subsequently confronted the courts was the formulation of principles and rules governing such extended enforceability. 1.4 The development of the wider enforceability of restrictive covenants was unlike the majority of other historical developments of the Court of Chancery’s equitable jurisdiction since the maxim that ‘Equity follows the Law’ could not be applied – as it was, for example in the case of the recognition, in equity, of interests such as equitable easements, mortgages, leases and the like. There was, in fact, no legal counterpart for the transmissible restrictive covenant in relation to freehold land; it was sui generis. The result was that the court had no ready-made jurisprudential blueprint by which to sustain the development of this branch of its jurisdiction and it was compelled to improvise as occasion arose. In the process, it paid lip service to at least three4 different jurisprudential theories and borrowed from each of these in formulating the special restrictive covenant rules. These theories were as follows.

1  The extension of Spencer’s Case theory 1.5 One theory propounded was that equity was in fact acting by way of extension of the common law doctrine in Spencer’s Case5 relating to leases: see, for example, Jessel MR in London & South Western Rly v Gomm6 (who described this or the equitable rules relating to negative easements, below, as each being the possible origin of the doctrine. However, had the doctrine in Spencer’s Case been seen as supplying the relevant principles then not only would the limitation relating to user7 have been unnecessary but it would also have applied to positive covenants. This possible basis for allowing the transmission of the burden of a covenant was finally set to rest by the decision of the Court of Appeal in Austerberry v Oldham Corporation.8 This is notwithstanding that some of the

2 3 4

5 6 7 8

10

(1848) 2 Ph 744 (41 ER 1143). It was, however, by no means the first case of its kind; see, for example, Barret v Blagrave (1800) 5 Ves 555; Duke of Bedford v British Museum Trustees (1822) 2 My & K 552 (Lord Eldon); Mann v Stephens (1846) 15 Sim 377 (Lord Cottenham). A possible fourth, adumbrated by Farwell J in Re Nisbet and Potts’ Contract [1905] 1 Ch 391; affd [1906] 1 Ch 386, at p 397 was that the equity created by a restrictive covenant ‘stands on the same footing with, and is completely analogous to, an equitable charge on real estate created by some predecessor in title of the present owner of the land charged’. This does not, however, apppear to have received any degree of acceptance. (1583) 5 Co Rep 16a. (1882) ChD 562, at p 583. Considered below, at para 1.11 et seq. (1885) 29 ChD 750.

The development of the rules relating to transmissibility 1.8 language from Spencer’s Case, in terms of obligations ‘touching and concerning the land’ has been borrowed in relation to the doctrine that developed in relation to restrictive covenants.

2  The conscience theory 1.6 The second theory was that enforcement against a third party rested on an assumed principle that if such party acquires property knowing that the assignor is bound by a contract relating to the property, then equity would enforce the contract against the third party on the ground that his conscience was affected. This seems to have been the principle applied by Lord Cottenham in Tulk v Moxhay but so wide a principle would in other respects have given free rein to the enforceability of negative land covenants, whether relating to user or not, and to the enforcement of positive covenants. General unconscionability as the basis of enforceability has since been soundly rejected.9

3  Analogy to negative easements theory 1.7 The third theory was that enforceability was based on ‘an extension in equity of the doctrine of negative easements – for instance, a right to the access of light which prevents the owner of the servient tenement from building so as to obstruct the light’.10 This theory has effectively been adopted and applied by the Court of Appeal in such cases as Formby v Barker,11 where – as in the case of an easement – the absence of land benefited by the covenant precluded enforceability against a successor of the burdened land; Re Nisbett and Potts’ Contract,12 where the burden of a restrictive covenant was held to bind the land in the hands of a squatter who had acquired a title by adverse possession and who accordingly did not claim through or under the covenantor; and Long v Gray,13 where the benefit of a restrictive covenant entered into with a tenant for life under a strict settlement whose only interest in the land was a legal life estate, was held to enure for the benefit of a fee simple owner of part of the benefited land in the same manner as a negative easement, although the legal life estate of the covenantee had come to an end. 1.8 Whilst, in relation to the rules relating to the acquisition of a negative easement14 and to the running of the benefit of such an easement, this theory is out of line,15 nevertheless, unlike the other two theories, it would appear to fit

9 See Formby v Barker [1903] 2 Ch 539; Re Nisbet and Potts’ Contract [1905] 1 Ch 391; Millbourn v Lyons [1914] 1 Ch 34 (affd [1914] 2 Ch 231) and LCC v Allen [1914] 3 KB 642. 10 Per Sir George Jessel MR in London and South Western Rly Co v Gomm (1882) 20 ChD 562, at p 583. 11 [1903] 2 Ch 539. 12 [1905] 1 Ch 391; affd [1906] 1 Ch 416. 13 (1913) 58 Sol Jo 46. 14 To which alone prescription, implied grant and acquisition under s 62 of the Law of Property Act 1925 apply. 15 For the rules applying to restrictive covenants, see Chapters 5, 6, 7 and 8 below.

11

1.9  Meaning of ‘restrictive covenant’ etc reasonably comfortably (although not perfectly16) with the rules relating to the running of the burden of restrictive covenants. Thus, the following similarities are found: (1) In the case of negative (as well as other) easements, there must be a dominant and a servient tenement;17 in the case of restrictive covenants, there must be both benefited and burdened land.18 (2) Neither can exist (as such) in gross. A negative easement (in common with other easements) must accommodate the dominant tenement;19 a restrictive  covenant must touch and concern (or benefit) the land of the covenantee.20 (3) The dominant and the servient tenements and the benefited and burdened land respectively, must be in different ownership.21 (4) The obligations imposed by both negative easements and restrictive covenants must be capable of being complied with without the expenditure of money or the doing of any act.22 (5) In the case of both negative easements and restrictive covenants, the obligations imposed are restrictive of the use and enjoyment of land. In the case of negative easements, mainly the easements of support, light and air, the inherent nature of the right in each case is such that the corresponding obligation is limited to restricting the use and enjoyment of the servient tenement. In the case of restrictive covenants, a corresponding limitation was evolved.23 (6) In each case, an intention to benefit successors has always been readily inferred from informal language.24

THE CURRENT RULES IN RELATION TO TRANSMISSIBILITY 1.9 By reference to one or other of the foregoing theories, the conditions which must be met before the benefit and burden of a restrictive covenant is 16 There are departures, especially statutory, both ways. Thus, restrictive covenants entered into with certain public bodies can run with the burdened land although not benefiting any land of the covenantee and (unlike easements) restrictive covenants can be discharged or modified by the Upper Tribunal under s 84(1) of the Law of Property Act 1925. Further, the potential scope of restrictive covenants is much wider: see Chapter 11. 17 Hill v Tupper (1863) 2 H&C 121. 18 As to benefited land, see LCC v Allen [1914] 3 KB 642; as to burdened land, see Re Fawcett and Holmes’ Contract (1889) 42 ChD 150; Osborne v Bradley [1903] 2 Ch 446, and cf Manchester Ship Canal Co v Manchester Racecourse Co [1901] 2 Ch 37. 19 Ackroyd v Smith (1850) 10 CB 164, at p 188. 20 For the details, see below, para 1.19 et seq. 21 For easements, see Bolton v Bolton (1879) 11 ChD 968; for restrictive covenants, see Re  Tiltwood, Sussex [1978] Ch 269 (although where a building scheme exists, unity of ownership of benefited and burdened plots merely suspends the existence of a restrictive covenant: Texaco Antilles Ltd v Kernochan [1973] AC 609, PC). 22 For negative easements, see Jones v Pritchard [1908] 1 Ch 630, per Parker J at p 637, and Sack v West [1925] Ch 235; for restrictive covenants, see para 1.10 below. The rule also applies to other easements (see Regis Property Co Ltd v Redman [1956] 2 QB 612) with the exception of the easement of fence (see Lawrence v Jenkins (1873) LR 8 QB 274; Jones v Price [1965] 2 QB 618, and Crow v Wood [1971] 1 QB 77). 23 See the cases cited in connection with this required attribute, below para 1.11 et seq. 24 See below, para 1.57 et seq.

12

The current rules in relation to transmissibility 1.10 capable of enjoying the maximum degree of transmissibility (in accordance with the rules considered in Chapters 6, 7 and 8) were evolved. To qualify, a restrictive covenant must satisfy the following six requirements, namely: (1) it must be negative in substance;25 (2) it must be restrictive of the user of land;26 (3) the original covenantee must have an interest in some land for the benefit of which the covenant was taken;27 (4) the covenant must in fact benefit land in which the claimant has an interest at the date when it is sought to enforce the covenant;28 (5) the words of covenant must be such as to show that the covenant was not intended to be personal to the original covenantee or to be confined to a category of persons to whom the claimant does not belong;29 (6) the covenant must have been entered into by a competent covenantor.30 Each of these general requirements will be considered in summary in turn.

1  The covenant must be negative in substance 1.10 A restrictive covenant can only qualify as such if it can be fully complied with without the doing of any act or the expenditure of any money.31 Four points fall to be noted: (1) If the covenant satisfies this test of negativity,32 it is immaterial whether the covenant is phrased in positive or negative language. Thus, in the leading case of Tulk v Moxhay33 itself, the covenant took the form of a covenant by the covenantor to ‘keep and maintain the said piece of ground and Square Garden, the iron railing round the same in its then form, and in sufficient and proper repair as a Square Garden and Pleasure Ground, in an open state, uncovered with any buildings in neat and ornamental order’. In the proceedings, the only matter complained of was the defendant’s action in commencing to build on the Square Garden, ie breach of the obligation to ‘keep … the Square Garden … in an open state, uncovered with any buildings …’. Although expressed in positive

25 See para 1.10 below. 26 See para 1.11 et seq below. 27 See para 1.19 et seq below. 28 See para 1.52 et seq below. 29 See para 1.56 et seq below. 30 See para 1.62 et seq below. 31 See Haywood v Brunswick Permanent Benefit Building Society (1881) 8 QBD 403: an owner of land cannot be compelled ‘to put his hand into his pocket’; Hall v Ewin (1887) 37 ChD 74 (freehold covenantor could not be compelled to bring an action against his lessee to prevent a breach of the restrictive covenant); Zetland v Driver [1939] Ch 1: ‘No affirmative covenant requiring the expenditure of money or the doing of some act can ever be made to run with the land’, per Farwell J (delivering the judgment of the Court of Appeal) at p 8. 32 Ie, if it can be complied with without the doing of any act or the expenditure of any money. 33 (1848) 2 Ph 774. This is the leading case on restrictive covenants in the sense that Lord Cottenham there contrived to lay down an acceptable equitable principle, but it was not in fact the first of its kind: see, eg Barret v Blagrave (1800) 5 Ves 555; Duke of Bedford v British Museum Trustees (1822) 2 My & K 552 (Lord Eldon); Mann v Stephens (1846) 15 Sim 377 (Lord Cottenham).

13

1.10  Meaning of ‘restrictive covenant’ etc language, it amounted in substance to a prohibition on building and this obligation amounted therefore to a restrictive covenant. Similarly, in Abbey Homesteads Developments Ltd v Northamptonshire County Council,34 the Court of Appeal, after referring to the covenant in Tulk v Moxhay, held that a provision in a ‘section 52 agreement’35 that ‘An area of 1.3 hectares adjacent to the playing field and amenity open space areas shall be reserved for school purposes’ was a negative, and not (as the Lands Tribunal had held) a positive covenant.36 More recently, in Blumenthal v Church Commissioners for England,37 the Court of Appeal held that a covenant that part of a building should be occupied by a particular entity (the Royal Society of Literature) amounted, in its context, to a covenant that was restrictive in nature, namely not to allow occupation of the premises by anyone else. Construing it as a positive obligation that the premises must be occupied by the entity would mean the covenantor would be in breach of it if the entity failed to take up occupation or left it afterwards, which could not have been intended. In Re Carbury 2000’s Application (2006),38 a covenant that ‘Not more than nine garages shall be erected on the site and there shall be a single garage for each flat’ was construed by the Lands Tribunal to be entirely negative in nature. The Tribunal held as follows:39 ‘On the face of it restriction 5 is a hybrid with a restriction at the beginning not to erect more than nine garages but a positive obligation at the end that each flat shall have a single private garage. I agree with the applicant’s submission, however, that the deed does not contain a positive covenant to build garages and that the substance of restriction 5, when read in the context of the deed as a whole, is that of a negative covenant restricting the construction of flats without garages. The words “… and there shall be” in restriction 5, taken in context, do not show “a clear shift of meaning from restraint to activity” (per Harman J in Westminster City Council v Duke of Westminster [1991] 4 All ER 136 at 147d).’

34 (1986) 53 P&CR 1. 35 An agreement made under the former s 52 of the Town and Country Planning Act 1971 (as to which, see Chapter 10). 36 See also, Gooiden v Anstee (1868) 18 LT 898 (covenant to build a house within 12 months to the satisfaction of the vendor’s architect – house built after 12 months and not to the architect’s satisfaction – held this was a breach of a negative stipulation); Catt v Tourle (1869) 4 Ch App 654 (covenant that vendor of land should have the exclusive right to supply beer to any public house erected on the land – purchaser sold part of land to defendant who erected a public house and supplied with his own beer – held the covenant was in substance negative); Abbey v Gutteres (1911) 55 Sol Jo 364 (covenant to keep windows obscured and fixed – held negative); Collins v Castle (1887) 36 ChD 243 (covenant to spend on each dwelling house built not less than £1,200 – held negative); Graham v Newcastle-upon-Tyne Corpn (1892) 67 LT 790 (covenant that certain land ‘should for ever thereafter be kept open and unbuilt upon’ – negative but construction of an underground urinal was not a breach); and Blumenthal v Church Commissioners for England [2005] 2 P&CR 20 (covenent to keep and use premises as the headquarters of a particular organisation amounting to restrictive covenants not to use them for any other purpose). But a positive covenant as to the type of buildings which can be erected will not always imply a negative covenant that no other type of building can be erected: see Holford v Acton UDC [1898] 2 Ch 240. 37 [2005] 2 P&CR 20. 38 LP/84/2004. 39 At para 48.

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The current rules in relation to transmissibility 1.10 To similar effect is the decision in Stevens v Ismail.40 A 999-year lease contained a covenant ‘to use and occupy the demised premises solely and exclusively as a self-contained residential flat’. It was contended that this was a positive covenant and positively required that it be used and occupied as a self-contained flat. The form of words used was held by the Upper Tribunal to indicate an intention that, if the demised premises were to be used and occupied at all, then it had to be as a self-contained flat; if the owner chose not to use and occupy the premises he was free to leave them vacant. (2) Whilst, in the covenants referred to above, nothing turned on the intermingling of the positive and restrictive obligations,41 it is clear, as stated by Megarry J in Shepherd Homes Ltd v Sandham (No 2),42 that ‘what is worded or set out in the instrument as a single covenant may give rise to more obligations than one; and if one obligation is positive, that is no reason why another obligation should not be negative, and be enforced as such. There cannot be any doctrine of contagious proximity whereby the presence of the positive inhibits the enforcement of the neighbouring negative’. This assumes, of course, that the positive and negative obligations can be singled out, for, as Megarry J went on to say: ‘There may perhaps be cases where the positive and the negative are inextricably intertwined, and these cases may give rise to different considerations’. However, ‘The thing ought not to depend on whether the draftsman tends to the fragmentary or comprehensive in his style of drafting covenants’. (3) The fact that something is prohibited unless a positive act is done, does not prevent the covenant from being negative since one way of complying with the covenant is to do nothing. Thus, the commonly imposed covenant ‘not to erect any building without first submitting plans for the approval of” the covenantee is a restrictive covenant.43 In Ridley v Taylor,44 the Court of Appeal construed a covenant ‘to complete in a proper and workmanlike manner and with suitable materials to the satisfaction of the estate surveyor of the landlord and in accordance with the said drawing the alterations to the said premises and the works consequent thereon’ as a restrictive covenant not to carry out the conversion except in the specified manner. In Norval v Pascoe45 a similar construction was held to apply to a covenant by the owners and occupiers of mines not to let down the surface without paying compensation. (4) In construing the scope of the obligations imposed by a covenant which is prima facie a negative covenant, those obligations will stop short of requiring the person bound to do anything which may involve him in positive action or expense.

40 41

[2016] L&TR 21. The importance of the distinction did not, in fact, clearly emerge until the decision in Haywood v Brunswick Permanent Building Society (1881) 8 QBD 403. 42 [1971] 1 WLR 1062, at p 1067E-G. 43 See Powell v Hemsley [1909] 1 Ch 680 (at first instance) and [1909] 2 Ch 252 (on appeal). 44 [1965] 1 WLR 611. 45 (1864) 10 LT 809.

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1.11  Meaning of ‘restrictive covenant’ etc Thus, in Hall v Ewin,46 a covenant against ‘using or permitting’ land to be used for any ‘noisome and offensive trade’ did not require a purchaser of the freehold to take proceedings to prevent his lessee from committing a breach (consisting of running a ‘wild beast show’ on the land), even though such omission might ordinarily fall within the scope of the words ‘permitting’ the breach.47

2  The covenant must be restrictive of the user of land 1.11 It is sometimes inferred from the fact that all restrictive covenants must be negative48 that therefore all negative covenants are restrictive covenants. Such syllogistic inference is, however, incorrect. The only negative covenants which are restrictive covenants are covenants which are restrictive of the user of land.49 Thus, whilst a covenant against using land for any purpose other than a private dwelling house is a restrictive covenant, a covenant not to sell land for less (or more) than a stated price or a covenant not to sue an adjoining owner for nuisance, would not appear to satisfy this requirement. Such covenants, although restrictive do not restrict the user of the land.50 1.12 In Re Milius’s Application51 a covenant (on a sale under right to buy provisions) prevented the disposal of premises without the written consent of the covenantee council, but with such consent not to be withheld where the conveyance or grant was to a person who had been resident in a particular area. It was doubted by the Lands Tribunal whether this was restrictive of the user of the property, However, the question was not actually decided and it was said52 that: ‘it is perhaps arguable that the user of the property may in practice be limited or restricted by the restriction on free disposition of a legal interest. On the other hand, some limitation on user may be seen as a possible indirect consequence of the restriction on disposal and not as the effect or the purpose of the covenant. As Mrs Williams put it, reasonable user of the property could not be said to be impeded by this restriction, but only if an application for 46 47

(1887) 37 ChD 74. The scope of the obligations should not, however, be confused with the scope of the injunctive relief which may be awarded for breach of those obligations. Thus, if in such a case as that mentioned, the freeholder is himself in breach, as by initially facilitating a breach by his lessee, the injunctive relief against the freeholder may well require him to take positive steps to determine the lease: see Carter v Williams (1870) LR 9 Eq 678. Similarly, a mandatory injunction may be appropriate to redress a breach of covenant not to build, etc: see, eg Achilli v Tovell [1927] 2 Ch 243. 48 Ie, negative in substance, see para 1.10 above. 49 Farwell J in Re Nisbet and Potts’ Contract [1905] 1 Ch 391 (affd [1906] 1 Ch 386), summed up the position in the words, at p 397: ‘But if the covenant be negative, so as to restrict the mode of use and enjoyment of the land, then there is called into existence an equity attached to the property of such a nature that it is annexed to and runs with it in equity’. 50 Similarly, a right of pre-emption, although negative in substance (ie, not to sell without first offering the land to the grantee of the right) is not a restrictive covenant: see Manchester Ship Canal Co v Manchester Racecourse Co [1901] 2 Ch 37. These and other negative (but not ‘restrictive’) covenants are more fully considered in Chapter 25. 51 (1995) 70 P&CR 427(HH Judge Marder QC, President). 52 At p 432.

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The current rules in relation to transmissibility 1.15 consent to a disposal were unreasonably refused. The issue is not without difficulty, and I am unaware of any direct judicial authority.’ 1.13 In Blumenthal v Church Commissioners for England53 (above) the Court of Appeal held that a covenant part of a building be occupied by a particular entity (the Royal Society of Literature) amounted, in its context, to a restrictive covenant, not to let the premises be occupied by anyone else, and that the Lands Tribunal therefore had jurisdiction in respect of it under section 84(1) of the Law of Property Act 1925 (ie it was a legally enforceable covenant restrictive of the user of the land). A covenant not to apply for a resident’s on-street parking permit or to permit others to do so was held not to be restrictive of the use of the land by the Court of Appeal in R (Khodari) v Royal Borough of Kensington and Chelsea Council.54 1.14 As in the case of assessing the negativity of a covenant, however, so also in the present context the question is one of construction as to the substance of the restriction. This is illustrated by Nicoll v Fenning,55 the facts of which were as follows. Upon the sale in 1863 of land forming part of a 25-acre field known as ‘Great Star Field’, West Ham, Essex, upon which the purchaser (Collins) intended to erect a public house, the vendors covenanted that they ‘their heirs and assigns will not thereafter sell or convey any portion of Great Star Field without requiring the purchaser to enter into a covenant with them not to allow any building to be erected thereon to be used as a public-house, tavern, or beer-shop.’ Shortly thereafter, Collins erected a public house and named it the ‘Alexandra Tavern’. On a conveyance on sale of another part of Great Star Field in 1870, the vendors duly took a covenant from the purchaser, the Gas Light and Coke Company, not to use or permit to be used any building erected on the land as a tavern, public house or beershop. The claimant was the successor in title of Collins in respect of the Alexandra Tavern and the defendant, Fenning, was a yearly tenant of the successor in title of the Gas  Light and Coke Company. Upon Fenning obtaining an excise licence for the sale of beer to be consumed off the premises, the claimant brought an action for an injunction to restrain him from selling beer from the premises. 1.15 The arguments and the judgment of Bacon V-C proceeded on the footing that the covenant sought to be enforced was the 1863 covenant rather than the 1870 covenant and although the 1863 covenant did not, in terms, restrict the use of the rest of Great Star Field, but merely required that it should not be sold without imposing a user restriction, the 1963 covenant was nevertheless treated as restricting the user even prior to any such sale and imposition. In the course of his judgment, Bacon V-C said:56 ‘Whether for convenience sake, for police purposes, or otherwise, it was at all events agreed that the vendors should sell one lot only for a public-house, and they bound themselves not to sell any other portion of the land unless

53 [2005] 2 P&CR 20. 54 [2018] 1 WLR 591. See, in relation to this case (where the actual obligation before the court was entered into under s 106 of the Town and Country Planning Act 1990), para 16.40 below. 55 (1881) 19 ChD 258 (Bacon V-C). 56 Ibid, at pp 265–266.

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1.16  Meaning of ‘restrictive covenant’ etc impressed with the burden of the restrictive covenant. From that date the rest of the property was subject to that restriction, and from that date it was not competent for the vendors in equity to dispose of that property, unless they protected not only Collins, but all the rest of the owners of the property … .’57 As with a number of the rules relating to restrictive covenants, the emergence of the present rule would appear to have occurred empirically rather than as a result of conscious formulation. 1.16 The early cases involving negative58 covenants which relied on the doctrine in Tulk v Moxhay were concerned with user covenants rather than any of the other types of negative covenants.59 and over the course of time in cases where judgments have sought to define the nature of the covenants which fall within the doctrine, they adopted this limitation. Thus, in Re Nisbet and Potts’ Contract,60 Farwell J stated the position as follows: ‘But if the covenant be negative, so as to restrict the mode of use and enjoyment of the land,61 then there is called into existence an equity attached to the property of such a nature that it is annexed to and runs with it in equity.’ 1.17 The doctrine in Tulk v Moxhay is in the result confined to negative covenants which are restrictive of the use and enjoyment of land and does not extend to other negative covenants notwithstanding that in relation to those covenants all the other requirements for the application of the doctrine may be satisfied. 1.18 In confirmation of this, the draftsman of the Land Charges Acts 1925 and 1972, the Land Registration Act 1925 and the Law of Property Act 1925, made special provision only for covenants restrictive of the user of land.62 Thus, section 2(5) of the Land Charges Act 192563 makes provision for the registration under the Act of ‘a restrictive covenant’ as a Class D(ii) land charge and defines ‘a restrictive covenant’ as ‘a covenant or agreement (other than a

57 Since there had been no breach of the restriction not to sell without imposing the restrictive covenant, it seems clear that the reference to ‘that restriction’ is a reference to a restriction against the user itself; only in this sense was there a threatened breach (by the defendant) of the 1863 covenant. Whilst (on this basis) the decision illustrates the proposition for which it is cited, the case itself is far from satisfactory. In the later case of Brigg v Thornton [1904] 1 Ch 386, the Court of Appeal held that a covenant not to let for the purpose of a particular trade did not preclude the covenantor from himself carrying on the trade (or selling the property free from the restriction). In contrast, in Oceanic Village Ltd v United Attractions Ltd [2000] Ch 234, Neuberger J, considered it implicit that if a covenantor agrees that he will not permit something to be done, that carries with it also an obligation on the covenantor not to do that thing, so as to amount to a restrictive user covenant (see p 240). 58 Tulk v Moxhay was relied upon as one of the grounds for the decision in Morland v Cook (1868) LR 6 Eq 252 which related to a positive covenant, but the decision on this point was afterwards discredited: see Austerberry v Oldham Corpn (1885) 29 ChD 750 and see also Chapter 28. 59 See, eg Coles v Sims (1854) 5 De G M & G 1; Western v MacDermott (1866) LR 1 Eq 499; Wilson v Hart (1866) 1 Ch App 463; Harrison v Good (1871) LR 11 Eq 338; Richards v Revitt (1877) 7 ChD 224; 60 [1905] 1 Ch 391, at p 397; affd [1906] 1 Ch 386. 61 Italics interpolated. 62 In the Land Registration Act 2002 the matter is dealt with by only intrests in the land (which would exclude covenants other than restrictive covenants under the rule in Tulk v Moxhay) being able to be the subject of a notice under s 32. 63 Re-enacting s 10(1) of the Land Charges Act 1925.

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The current rules in relation to transmissibility 1.20 covenant or agreement beween a lessor and a lessee) restrictive of the user of land64 and entered into on or after 1 January 1926’. Similarly, section 50(1) of the Land Registration Act 1925 made provision for applications to enter a notice on the register of the burdened land of ‘a restrictive covenant or agreement (not being a covenant or agreement made between a lessor and lessee) with respect to the building on or other user of registered land’. Further, section 84(1) of the Law of Property Act 1925 (as amended) confers on the Upper Tribunal65 certain powers to discharge or modify ‘any restriction arising under covenant or otherwise as to the user’ of any freehold land.66

3 The covenant must have been entered into for the benefit of land ‘belonging’ to the covenantee 1.19 There are two separate aspects of this requirement which need to be considered: (A) the circumstances in which a covenant can be said to satisfy the test of benefiting land belonging to the covenantee; and (B) what ‘belonging’ to the covenantee means, ie what estate or interest in the land must be held by the covenantee at the date of the covenant in order to qualify. Each of these will be considered to in turn.

A: The covenant must benefit land belonging to the covenantee at the date the covenant is entered into 1.20 In Tulk v Moxhay this requirement was satisfied, since in that case the claimant who sold what is now Leicester Square, London, to the defendant’s predecessor in title (at the same time taking a covenant against building on the Square) retained certain houses bordering the Square. Lord Cottenham did not expressly state that such retention was essential to success, but in the course of his judgment, in answer to the argument that a successor in title to the covenantor was not bound, he said: ‘If that were so, it would be impossible for an owner of land to sell part of it without incurring the risk of rendering what he retains worthless’ and it seems clear that the existence of retained land at the date of the covenant was a significant factor in the decision.67

64 Italics interpolated. 65 Previously the Lands Tribunal. 66 There are many other examples of provisions in the property legislation (and other Acts) showing that the meaning of restrictive covenants is confined to covenants which restrict the use of land; see, eg s 49(1)(b) of the Settled Land Act 1925; ss 2(3)(ii), 2(5)(a), 78(1), 79(1) and 200(1) of the Law of Property Act 1925; s 237(1)(b) of the Town and Country Planning Act 1990 (re-enacting with amendments s 127 of the Town and Country Planning Act 1971). 67 However, in the course of his judgment in the Court of Appeal in LCC v Allen [1914] 3 KB 642, Scrutton J expressed the view that at the time of Tulk v Moxhay and for at least 20 years afterwards, a covenantee might have succeeded against a successor of the original covenantor even though the covenantee had not retained any land which benefited. It may also be noted that it does not specifically appear whether the claimant in Tulk v Moxhay continued

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1.21  Meaning of ‘restrictive covenant’ etc All the restrictive covenant cases which were decided between 1848 (the date of Tulk v Moxhay) and 1903 were cases in which the covenantee held land for the benefit of which the covenant was taken and the question of whether this was actually required did not directly arise68 until the case of Formby v Barker69 in 1903. 1.21 In Formby v Barker the claimant sold all the land which he owned to the predecessor in title of the defendant, taking a covenant restricting the use of the land. The Court of Appeal held that no land ever having benefited from the covenant, it could not be enforced as a restrictive covenant against a successor of the covenantor. In so holding, the court appears to have been guided not so much by analogy to negative easements as by reference to the fact that in all the earlier cases where the claimant succeeded, he was the owner of land which, either from the terms of the covenant or by inference from surrounding circumstances, it appeared that the covenant was intended to benefit. The same point came before the Court of Appeal again in London County Council v Allen70 where, in applying Formby v Barker and arriving at the same result, Buckley LJ and Scruton J expressly drew on the analogy of negative easements, and the rule that such easements could not exist in gross ‘at the date of the covenant’. For the purposes of the present requirement, ‘the date of the covenant’ is the date of the instrument which effectively imposes the covenant. 1.22 Where the conveyance or transfer imposing the covenant is preceded by  a contract making provision therefor, then even though the contractual interest of the purchaser in the land to be subjected to the covenant is sufficient to make him a competent covenantor,71 and even though the contract contains the  terms of the covenant so as to make it effective pending completion, nevertheless when completion takes place and the purchaser covenants in the conveyance or transfer, the contract is superseded by such conveyance or transfer so that thereafter the date of the covenant is the date of that instrument. 1.23 In cases where there is no building scheme, this can present anomalies where, between the date of the contract and the date of completion, the vendor sells all or part of the land owned by him at the time of the contract. Thus, in Milbourn v Lyons:72 ‘The freehold owner of a hotel and adjoining houses and land contracted in 1898 to sell the hotel to H, the predecessor in title of the claimant. The contract provided that the conveyance should contain a restrictive covenant

68

69 70 71 72

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to own any of the houses as the date of the proceedings (40 years after the covenant was taken) but this is a separate point relating to whether the covenant continues as a restrictive covenant, a matter which is discussed below. The view expressed by Farwell J in Osborne v Bradley [1903] 2 Ch 446 (immediately before the Court of Appeal’s decision in Formby v Barker [1903] 2 Ch 539) that if a restrictive covenant is taken simply for the vendor’s own benefit, and not in his capacity as owner of specified neighbouring land, he can enforce it against a successor of the covenantor, was purportedly founded upon the rule enunciated by Lord Cairns in Doherty v Allman (1878) 3 App Cas 709; but Lord Cairns was there dealing with the entirely different case of enforcement between the original parties to the agreement. [1903] 2 Ch 539. [1914] 3 KB 642. See below, para 1.69 et seq. [1914] 2 Ch 231, CA.

The current rules in relation to transmissibility 1.26 by H for the benefit of the adjoining houses and land restrictive of the user of the hotel. Shortly afterwards, the vendor died and completion of the contract by his executors did not take place until 12 months later when the covenant in the conveyance was entered into by H. Prior to such completion, however, the executors had sold and conveyed all the adjoining houses and land forming part of the estate and retained no property capable of benefiting from the covenant. In 1912 the claimant contracted to sell the hotel to the defendant free from the covenant but on investigating the title the defendant refused to complete claiming that the covenant was binding on the hotel land.’ In an action for specific performance, the Court of Appeal held that the material date for determining whether the covenantees owned land capable of benefiting from the covenant was the date of the conveyance, not the date of the contract, since (whatever may have been the position prior to completion) the contract had been superseded by the conveyance and since at that date the covenantees held no land capable of benefiting, there was no restrictive covenant which ran with the hotel land.

The Congleton test of ‘touching and concerning’ 1.24 Despite judicial reliance on occasions on the analogy of negative easements as the foundation for the present requirement, in considering whether individual covenants benefit the land of the covenantee, the courts have frequently applied the language of the test of ‘touching and concerning’ the land which grew up from the rule in Spencer’s Case (1583)73 relating to covenants in leases (where an assignee was at common law not bound by a covenant to do something which was merely collateral, and so did not ‘touch or concern’ the land demised74). 1.25 In the context of leases, in Congleton Corpn v Pattison,75 Bayley J held that a covenant by a lessee not to hire persons from certain other parishes to work in a mill was not binding on an assignee of the lessee since: ‘In order to bind an assignee, the covenant must either affect the land itself … as [to] the mode of occupation, or it must be such as per se, and not merely from collateral circumstances, affects the value of the land … .’76 1.26

Four points fall to be made about this test.

(1) It was enunciated by Bayley J in the context of whether the burdened estate (of the lessee) was affected by the covenant. In the case of restrictive covenants between freeholders, although there is undoubtedly a corresponding requirement relative to the running of the burden, the fact that the restrictive covenant, by definition, affects the mode of use and enjoyment of the land automatically ensures the first limb of the test, that of affecting ‘the land itself as to the mode of occupation’ is satisfied.

73 (1583) 5 Co Rep 16a (where the expression used in the third resolution of the Kings’s Bench Justices was ‘touches or concerns’). 74 This historical position is now altered in relation to leases by reason of the Law of Property Act 1925, s 77. 75 (1808) 10 East 130. 76 Ibid at p 135.

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1.26  Meaning of ‘restrictive covenant’ etc (2) In relation to the second limb, that of affecting ‘the value of the land’, at least one other judicial test of ‘touching and concerning’ in relation to leasehold covenants generally has incorporated a reference to ‘value’77 and so long as due emphasis is given to the words ‘per se and not merely from collateral circumstances’78 in assessing the impact of a covenant on the value of the land of the covenantee, it seems clear that the effect of a covenant on maintaining or enhancing such value is correctly regarded as one way (but by no means the only way79) of showing that such land is ‘benefited’.80 (3) Whilst the test itself could be said to embrace two separate issues namely, first, whether the covenant of such a nature as to be capable of benefiting the land of the covenantee, and second, if it is, whether it benefits such land on the facts, as applied to covenants in leases, the cases have been much more concerned with the first of these issues than the second so that it has become possible to draw up a list of covenants of which it can be said that they will touch and concern the land in the case of almost any lease.81 Similarly in relation to restrictive covenants, it is possible to draw up a list of covenants which have been held to be capable of benefiting freehold land – such  as a covenant not to erect more than one private dwelling house,82 not to erect any building without first submitting plans for the approval of the vendor,83 not to develop land for building purposes except in accordance with a lay-out plan to be submitted to and approved by the vendor,84 not to use the land for any purpose except agriculture,85 or other than as smallholdings or allotments,86 or not to do or permit any act on the land which in the opinion of the vendor may be a public or private nuisance

77

‘The true principle is that no covenant or condition which affects merely the person, and which does not affect the nature, quality, or value of the thing demised or the mode of using or enjoying the thing demised, runs with the land’: per Lord Russell CJ, in Horsey Estate Ltd v Steiger [l899] 2 QB 79, at p 89. 78 For example, the covenant in Congleton Corpn v Pattison, above, may well have increased the value of the lessor’s reversion but, if so, it would be by reason of collateral circumstances, ie, fuller employment in the parish. As to ‘ransom’ value, see paras 1.28–1.30 below. 79 An argument put by counsel in Kelly v Barrett [1924] 2 Ch 379, that unless a covenant increased the value of the covenantee’s land it could not be said to ‘touch and conern’ the land, was firmly rejected by Tomlin J at p 396. On appeal, Warrington LJ (ibid, p 411) indicated that he was not prepared to differ from Tomlin J on this point and suggested that the question which has to be determined in all such cases is: ‘May the land to which the benefit purports to be attached be reasonably regarded as capable of being affected by the performance or the breach of the obligation in question, as the case may be?’. 80 In Tulk v Moxhay itself, Lord Cottenham, in dealing with the contention that a purchaser from the covenantor might violate the covenant with impunity, said: ‘If that were so, it would be impossible for an owner of land to sell part of it without incurring the risk of rendering what he retains worthless.’ 81 See, for example, Cheshire and Burn’s Modern Law of Real Property,18th edn, pp 305–306. The further test, originally suggested by Professor Cheshire, of whether the covenant ‘affects either the landlord qua landlord or the tenant qua tenant’ and which was expressly approved by Scott LJ in Breams Property Investment Co Ltd v Stroulger [1948] 2 KB 1, again points to the nature of the covenant rather than to the nature of a factual inquiry. 82 Eg, Rogers v Hosegood [1900] 2 Ch 388; Brunner v Greenslade [1971] Ch 993; Gilbert v Spoor [1983] Ch 27. 83 Powell v Hemsley [1909] 1 Ch 680. 84 Wrotham Park Estate Co v Parkside Homes Ltd [1974] 1 WLR 798. 85 Marten v Flight Refuelling Ltd [1962] Ch 115. 86 Earl of Leicester v Wells-next-the-Sea UDC [1973] Ch 110.

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The current rules in relation to transmissibility 1.26 or prejudicial or detrimental to the vendor or to the neighbourhood,87 not to carry on the trade of an ironmonger,88 and many others.89 The Congleton test was adopted by Farwell J in Rogers v Hosegood90 as applicable (and satisfied) in relation to a restrictive covenant by a purchaser of a freehold plot with his vendor that no more than one dwelling house should at any time stand on the plot, as benefiting other plots retained by the vendor. In Re Gadd’s Land Transfer,91 Buckley J ‘was willing to accept’ the test, holding, on the facts, that it was satisfied in relation to a similar covenant benefiting an unadopted service road which was retained by the original covenantee. In many recent cases, however, the language of ‘touching and concerning’ has either not featured at all in determining whether a restrictive covenant is capable of benefiting the land of the covenantee or, where it has featured, it has done so, as in Re Gadd’s Land Transfer, in the context of the requirement considered below, namely whether, assuming the covenant to be inherently capable of benefiting land, it did in fact ‘touch and concern’ the land (or all the land) in the sense of benefiting it, not only at the date of the covenant, but also at the date of the proceedings. Thus, in Earl of Leicester v Well-next-the-Sea UDC92 and Wrotham Park Estate Co v Parkside Homes Ltd,93 the question posed in each case was whether the covenant ‘benefited’ the land of the covenantee, and in considering this question no reference was made either to the test, or to the language, of ‘touching and concerning’. In Gilbert v Spoor,94 Eveleigh LJ alone of the three members of the Court of Appeal referred to whether the land of the respondents was ‘touched and concerned’; but again, this was in the context not of considering the nature of the covenant but of whether the covenant which was clearly capable of benefiting land, did in fact benefit the respondents’ land.95 In Federated Homes Ltd v Mill Lodge Properties Ltd96 Brightman LJ referred to the covenant in question as being clearly intended for the protection of adjoining property retained by the vendor, so that it ‘related to the land of the covenantee’, which he described as equating to the use of ‘the oldfashioned expression, that it touched and concerned the land’ (at p 604F). In Crest Nicholson Ltd v McAllister,97 Chadwick LJ for the court referred to the question of whether a covenant ‘does in fact touch and concern land of the covenantee’ in para 30, which the context of the case shows 87 88

89 90 91 92 93 94 95 96 97

Marquess of Zetland v Driver [1939] Ch 1. Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd [1952] Ch 286. In Re Quaffers Ltd’s Application (1988) 56 P CR 142, the President of the Lands Tribunal (VG Wellings QC) expressed the view that there was no reason in law why a restrictive covenant should not be taken for the benefit of a trade and that whether it is, is a question of construction. Particular restrictive covenants are considered in Chapter 11 below. [1900] 2 Ch 388, at p 395, affd ibid, at p 399. [1966] Ch 56. [1973] Ch 110. [1974] 1 WLR 798. [1983] Ch 27. The observations of Eveleigh LJ on this point were not necessary for the decision. [1980] 1 WLR 594. [2004]1 WLR 2409.

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1.27  Meaning of ‘restrictive covenant’ etc he understood to mean whether it benefited land of the covenantee (before going on to consider specific matters relating to annexation, as to which see below). (4) ‘Affects the value’ – in this context, it is clear that ‘value’ is not confined to monetary value. Thus, in Wrotham Park Estate Co v Parkside Homes Ltd,98 Brightman J found as a fact that the construction of a road and the erection of 14 houses in breach of a restrictive covenant ‘had not diminished by one farthing’ the market value of the land claimed to be benefited by the covenant, although he found, on the evidence, the existence of other types of benefit which satisfied the benefit requirement. In some cases, indeed, the existence or continued existence of a restrictive covenant which has a sterilising effect on the burdened land, may well have a knock-on sterilising, and therefore depreciating, effect on the market value of the neighbouring land of the covenantee, yet this would not necessarily prevent the covenant from ‘benefiting’ the covenantee’s land. Thus, in Marten v Flight Refuelling Ltd,99 the question was whether a covenant restricting the use of Crook Farm, formerly part of the Crichel Estate in Dorset, to agricultural purposes, benefited the remainder of the Crichel Estate (consisting of some 7, 000 acres). It was argued that if Crook Farm were developed, this would actually enhance the value of the Crichel Estate, since it would bring with it the development or the possibility of development of that estate which would therefore be better off without the covenant than with it. But Wilberforce J rejected this argument on the ground that there were other values which could be relevant to the estate other than enrichment (see (iii) below). 1.27 In the present context, the following kinds of value have been held to be material. (i)

Monetary value The qualifying nature of such value is implicit in the decision in Tulk v Moxhay itself100 and is illustrated in the context of leases by the decision of the House of Lords in P & A Swift Investments v Combined English Stores Group plc.101 In the case of freehold covenants, this kind of value clearly manifests itself in connection with the benefit conferred by covenants restricting the type of trade or business which can be carried on102 and, in the case of housing development, by covenants restricting the type of housing which can be built.103

98

[1974] 1 WLR 798. See also Allen v Veranne Builders Ltd [1988] NPC 11, Browne-Wilkinson V-C. [1962] Ch 115. Above, para 1.20. [1989] AC 632. See, also, Coronation Street Industrial Properties v Ingall Industries plc [1989] 1 WLR 304, HL and Kumar v Dunning [1989] QB 193, CA. See, for example, Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd [1952] Ch 286 (Wynn-Parry J). On the other hand, in Thomas v Hayward (1869) LR 4 Exch 311, a covenant by a lessor of a public house not to use adjoining land for the sale of liquor, was held not to touch and concern the demised land since its value to the tenant was considered to be collateral. As in Baxter v Four Oaks Properties Ltd [1965] Ch 816 (Cross J).

99 100 101 102

103

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The current rules in relation to transmissibility 1.28 (ii) Amenity value Examples from the decided cases include covenants which operate to preserve a view, even though only seen from a road giving access to the benefited land;104 a covenant restricting the layout and density of residential development, even though the change of layout and increase in density take place in an area some distance removed from the benefited land;105 a covenant restricting the use of a 562 acre farm to agricultural use, even though the benefited land extended to some 7, 000 acres;106 a covenant restricting the use of any building otherwise than as a private residence, whether or not the offending building was visible from the benefited land;107 and a covenant not to use land except for the housing of the working classes, now equated broadly to social housing (this having the potential to attract people to land benefiting from the covenant because of the particular social value of an area).108 (iii) Control value The essence of the findings of fact of Wilberforce J in Marten v Flight Refuelling Ltd109 was that it was of value to the whole of the Crichel Estate in Dorset that through the enforcement of the covenant a measure of control could be exercised over the adjoining Crook Farm. Two particular examples of such value referred to in evidence which were accepted as valid by Wilberforce J were that the construction of a substantial industrial undertaking on Crook Farm would make it more difficult to recruit and retain estate employees and that the installation of increased services in the way of roads, electrical cables and the like would change the character of the place. Benefit accruing from the element of control afforded by the enforceability of covenants was also successfully relied upon in Wrotham Park Estate Co v Parkside Homes Ltd.110 1.28 However, it is considered that in the present context, control value, in order to qualify as such, must be shown to be attributable to the value which arises from the ability to enforce the covenants – not to the value which might be able to be realised by negotiating the release or modification of the covenants. In other words, the benefit claimed must be shown to accrue from the continued observance of the covenants, not from the price which might be able to be exacted for permitting non-observance. The ‘ransom’ value of a covenant would appear to be attributable to ‘collateral circumstances’ so as not per se to affect the value of the land. Only if the covenant can first be shown to confer an intrinsic benefit on the land of the covenantee will it confer any bargaining power for its release or modification and the converse cannot, it is considered, be logically argued. If these conclusions are correct, then the retention of a small area of ‘ransom’ land with a view primarily to exercising bargaining power against successors from the covenantors for the release or variation of covenants, would fail in 104 105 106 107 108 109 110

Gilbert v Spoor [1983] Ch 27, CA. Wrotham Park Estate Co v Parkside Homes Ltd [1974] 1 WLR 798 (Brightman J). Marten v Flight Refuelling Ltd [1962] Ch 115 (Wilberforce J). Baxter v Four Oaks Properties [1965] Ch 816 (Cross J). Dano v Earl Cadogan [2003] 2 P&CR 10. [1962] Ch 115. [1974] 1 WLR 798. See, also, Ridley v Taylor [1965] 1 WLR 611 (where control through restrictions contained in a lease of premises in Mayfair was treated as a benefit to the landlord (the Duke of Westminster) in pursuing his estate policy of securing the high residential quality of the area).

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1.29  Meaning of ‘restrictive covenant’ etc its purpose by reason of that land not being ‘touched and concerned’ by the covenants. 1.29 Support for this view is provided indirectly by certain decisions of the Court of Appeal on appeal from the Lands Tribunal in section 84 applications involving the like issue in the context of whether a covenant has become ‘obsolete’ or whether it secures ‘practical benefits’ to the person entitled to enforce the covenant. Thus, in Driscoll v Church Comrs for England,111 Denning LJ said: ‘If he uses it [the power to consent to a discharge or modification of covenants restricting the use of premises on an estate] reasonably, not in his own selfish interests but in the interests of the people of the neighbourhood generally, as, for instance, when he gives his consent for any sensible change of user, then it will serve a useful purpose. I should have thought that he uses it unreasonably, for instance, to exact a premium as a condition of his consent; or if he refuses consent altogether when he ought to give it, as, for instance, for turning it into flats, it would no longer serve a useful purpose. In short, so long as the landlord uses the covenant reasonably in the interests of the public at large it is not obsolete, but, if he seeks to use it unreasonably, then it is obsolete.’ In Stockport Metropolitan Borough Council v Alwiyah Developments,112 Eveleigh LJ, after referring to the above observations, said (in relation to section 84(1)): ‘Bargaining power is only a benefit when it results in the receipt of the price upon the covenant being discharged. Such a benefit cannot be of the kind contemplated by the subsection for it results from the discharge and not the continuance of the covenant.’ The judgment of Dillon LJ was to similar effect and Griffiths LJ agreed with both judgments. 1.30 In the Lands Tribunal case of Re Bennett’s and Tamarlin Ltd’s Applications,113 the Tribunal applied the principle of the Stockport decision in considering whether the person entitled to the benefit of a covenant would be ‘injured’ by the discharge or modification of a covenant under paragraph (c) of section 84(1) as well as in the context of whether the covenant secured any ‘practical benefits’ to such person.114

The question of a possible value arising out of a moral obligation to enforce covenants for the benefit of others 1.31 It has been considered by some that a moral obligation might be sufficient because in Wrotham Park Estate Co v Parkside Homes Ltd,115 the 111 112 113 114

[1956] 3 All ER 802, at 8071. (1986) 52 P&CR 278, at 281, CA. (1987) 54 P&CR 378 (VG Wellings QC). Unfortunately for the clarity of the law, the earlier Court of Appeal decision in Ridley v Taylor [1965] 1 WLR 611, where the existence of bargaining power to negotiate for the payment of a lump sum or extra rent in return for a variation of a covenant in a lease was treated as relevant to paragraph (c) of s 84(1), was not cited in either the Stockport or the Bennett cases. This whole matter is considered further in Chapter 23 below. 115 [1974] 1 WLR 798. But the issue of moral obligation is referred to only in [1974] 2 All ER 321 at 333h.

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The current rules in relation to transmissibility 1.32 claimant company based its claim to be entitled to enforce certain restrictive covenants on two grounds; first, that the covenants continued as a fact to benefit the part of the original Wrotham Park Estate which was now vested in it; secondly that it was under a moral obligation to enforce the covenants owed to the present owners of land formerly forming part of the Wrotham Park Estate which had been sold off, the position being that the restrictive covenants in question had been entered into for the benefit of ‘the Vendor’s Wrotham Park Estate’ (construed as referring only to the remaining part of the estate for the time being remaining in the ownership of the vendor as an estate entity, so that the present owners of other parts of the estate could not themselves enforce the covenants). However, whilst Brightman J accepted evidence that such a moral duty was owed,116 he did not actually decide whether the existence of such a moral duty would in itself have been sufficient to justify enforceability. In this connection, whilst the existence of an obligation by way of trust would no doubt extend the purview of the benefited land to that owned by the trust beneficiaries,117 since this depends on the existence of a trust, such a trust obligation would not apply to owners of land who were objects of a mere moral obligation. It has been suggested, however, in the context of applications under section 84(1) for the discharge or modification of restrictive covenants that the reason for the insistence in subsection (1)(c) of injury to ‘the persons entitled to the benefit of the restriction’ is to exclude in relation to applications under section 84(1) objectors whose only interest in enforcing the restriction is ‘out of a sense of duty or moral obligation to others’, as opposed to their own proprietary interest118 and this in turn may be seen as implying that for general purposes (ie absent section 84(1) coming into play), such an interest may be a sufficient benefit to satisfy the requirement now being considered. 1.32 In Marquess of Zetland v Driver,119 where the opening of a fried fish shop on the burdened land was complained of as being in breach of a covenant ‘that no act or thing shall be done or permitted thereon which in the opinion of the vendor may be a public or private nuisance or prejudicial or detrimental to the vendor and the owners or occupiers of any adjoining property or to the neighbourhood’, the Court of Appeal,120 in a single judgment delivered by Farwell J, expressed the view that if the covenant prohibited acts which were a nuisance or annoyance to an adjoining owner or the neighbourhood which were not also a nuisance or annoyance to the unsold land of the vendor, then the covenant might well be one which did not run with the vendor’s unsold land. But the enforceability of the covenant by a successor in title of the original vendor was upheld by construing it as meaning that nothing which would be a nuisance or annoyance to an adjoining owner or the neighbourhood was within the covenant unless it was also detrimental or injurious to the unsold land of the vendor. The question of whether a moral duty to enforce the covenant would be sufficient was not actually determined therefore.

116 [1974] 2 All ER 321 at 335e. 117 See Nicoll v Fenning (1881) 19 ChD 258, at 267 and Chapter 4 below. 118 Per Russell LJ in Ridley v Taylor [1965] 1 WLR 611 at 622. 119 [1939] Ch 1, CA. 120 Consisting of Sir Wilfred Greene MR, Luxmoore LJ and Farwell J.

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1.33  Meaning of ‘restrictive covenant’ etc 1.33

There is therefore no decided case directly on point.

It is difficult to see how in principle a moral duty will be sufficient unless the enforcement of it can be seen as beneficial to the value of the covenantee’s land itself since it is the benefit of the covenant to the covenantee’s land that it is necessary to consider. However, depending on the facts, it could be argued that ensuring practical good neighbourliness may tend to lead to reciprocation where possible and therefore be to the benefit of that land. Only where by some means the benefit to others or a wider area can in some way  be regarded as being of benefit to the covenantee’s land itself is such a benefit to the wider community or society likely to be sufficient. 1.34 In Dano Properties Ltd v Earl Cadogan,121 Etherton J, proceeding on the basis of the defendant’s submission it was necessary for the benefit of a restrictive covenant to benefit the covenantee’s land rather than just the public and the community in general, considered that a covenant not to use land other than for the housing of the working classes was of benefit to the covenantee’s land because it was a reasonable view that people may be attracted to occupying the covenantee’s land because of both the particular social atmosphere in the area and the provision of adequate services by competent people who may only be willing to work there if affordable housing is available to them in the locality (see in particular para 67).

The burden of proof as to whether a covenant benefits the land of the covenantee 1.35 The court will normally presume without evidence that the land identified in the deed as being intended to be benefited at the time the covenant is made was capable of being benefited. This presumption was first adumbrated by Sargant J in Lord Northbourne v Johnston & Son122 in the following terms: ‘When once a building plot or house had passed from the hands of the original purchasers to those of a third party, it would be incumbent on the owner of the estate to show, as a condition precedent to the enforcement of the covenant, first, that he had intended the covenant to be for the benefit of such portions of the estate as he still retained and, secondly, that it was in fact for their benefit at the time when enforcement was sought … . Benefit or detriment is often a question of opinion on which there may be the greatest divergence of view, and the greatest difficulty in arriving at a clear conclusion. It is, in my judgment, sufficient for the vendor to say, at any rate in the first instance, that the bargain was that he should be protected against certain acts which were recognized as being likely to prove noxious or detrimental to his building estate treated as a whole. The covenantor, being then, in my judgment, bound at the very least to show that the estate remaining to the covenantee at the date of the action was not intended to be protected by the

121 [2003] 2 P&CR 10. 122 [1922] 2 Ch 309, at 318–319.

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The current rules in relation to transmissibility 1.39 covenants, or that the breach of the covenants could not possibly hurt such remaining estate, the question arises whether this onus has been discharged in the present case.’ 1.36 In Marten v Flight Refuelling Ltd,123 Wilberforce J set out the presumption in the following terms: ‘If an owner of land, on selling part of it, thinks fit to impose a restriction on user, and the restriction was imposed for the purpose of benefiting the land retained, the court would normally assume that it is capable of doing so. There might, of course, be exceptional cases where the covenant was, on the face of it, taken capriciously or not bona fide, but a covenant taken by the owner of an agricultural estate not to use a sold-off portion for other than agricultural purposes could hardly fall within either of these categories.’ 1.37 This statement of the law was cited with approval and applied by Plowman J in Earl of Leicester v Wells-next-the-Sea UDC,124 by Brightman J in Wrotham Park Estate Co v Parkside Homes Ltd,125as well as more recently by the Court of Appeal in Whitgift Homes Ltd v Stocks.126 In the Wrotham Park case, Brightman J restated the matter thus:127 ‘If a restriction is bargained for at the time of sale with the intention of giving the vendor a protection which he desires for the land he retains, and the restriction is expressed to be imposed for the benefit of the estate so that both sides are apparently accepting that the restriction is of value to the retained land, I think that the validity of the restriction should be upheld so long as an estate owner may reasonably take the view that the restriction remains of value to his estate, and that the restriction should not be discarded merely because others may reasonably argue that the restriction is spent.’ This approach was followed by Etherton J in Dano v Earl Cadogan.128 1.38 The presumption is accordingly a continuing presumption and in the absence of evidence of a change of circumstances at least, will continue to hold good at the date when the issue comes before the court. 1.39 Where it is not possible to see from the deed containing the covenant  itself what the physical land intended to be benefited is, but it uses words such as ‘the vendor’s land remaining unsold’ at the date of the deed, which is able to be ascertained, then evidence will clearly be required to show what physically the land benefited was. Once ascertained, however (the burden of proof being on the asserting party to establish it applies to the land contended for), the presumption will apply. Notwithstanding the presumption, where the land expressed to be benefited consists of a very large area, it would clearly be wise for evidence to be led to show that all the land referred to was originally, and still is, benefited.

123 124 125 126 127

[1962] Ch 115, at pp 136–137. [1973] Ch 110. [1974] 1 WLR 798. [2001] EWCA Civ 1732 at para 106. [1974] 1 WLR 798 at 808. This statement was cited with approval by Slade LJ in Cryer v Scott Bros (Sunbury) Ltd (1986) 55 P&CR 183 at 196–197. 128 [2003] 2 P&CR 10 – see paras 49–68, esp para 68.

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1.40  Meaning of ‘restrictive covenant’ etc 1.40 Thus, in Re Ballard’s Conveyance,129 on the sale of several acres of land known as Bamville Farm, the purchaser covenanted to perform and observe a set of restrictions and stipulations including a restriction forbidding erection of buildings other than private dwelling houses. The covenant was expressed to be entered into with the vendor ‘her heirs and assigns and successors in title owners from time to time of the Childwickbury Estate’ consisting of some 1,700 acres. During the course of the hearing, counsel for the respondent company, the present owner of the Childwickbury Estate, asked for an adjournment in order to consider whether to call evidence to prove that a breach of the restrictions and stipulations, or of some of them, might affect the whole of the estate, but although the judge (Clauson J) had indicated that he was prepared to allow such evidence, none was called. In the result, Clauson J came to the conclusion that ‘while the covenant may concern or touch some comparatively small portion of the land to which it has been sought to annex it, it fails to concern or touch far the largest part of the land’ and that (no severance being then regarded as possible130) it therefore failed to be effectively annexed to any land at all with the result that the covenant was no longer enforceable.131 1.41 In Lord Northbourne v Johnston & Son, Marten v Flight Refuelling Ltd (the Crichel Estate, Dorset, comprising 7,000 acres), Wrotham Park Estate Co v Parkside Homes Ltd,132 and Earl of Leicester v Wells-next-the-Sea UDC, referred to above, extensive evidence was adduced133 to show that the whole of the land expressed to be benefited could in fact benefit from the relevant restrictions at the time of the proceedings and in each of those cases the court found that a covenant restricting or precluding development did extend to the whole of the land expressed to be benefited notwithstanding that in Lord Northbourne v Johnston & Son134 the benefited land extended to a large estate of unspecified area known as Shipcote Estate, Gateshead (in Marten v Flight Refuelling Ltd135 it involved the 7,000 Crichel Estate in Dorset), in Wrotham Park Estate Co v Parkside Homes Ltd it involved an extensive area known as Wrotham Park Estate, Potters Bar, Hertfordshire and in Earl of Leicester v Wellsnext-the-Sea UDC136 it concerned the 32,000 acre Holkham Estate in Norfolk. 1.42 It does not follow, however, that all the land originally specified as the benefited land, will continue to be capable of qualifying as such in the hands of a successor from the original covenantee. Whether it is so capable is a matter of construction. Thus, in Wrotham Park Estate Co v Parkside Homes Ltd,137 the restrictions were expressed to be ‘for the benefit of the Vendor’s  said Wrotham Park Estate’ with the added qualification ‘using that

129 [1937] Ch 473. 130 See now, as to severence, Chapter 6 below. 131 See also National Trust for Places of Historic Interest or Natural Beauty v Midlands Electricity Board [1952] Ch 380 where Vaisey J held that a covenant that ‘No act or thing shall be done or placed or permitted to remain upon the land which shall injure prejudice affect or destroy the natural aspect and condition of Midsummer Hill in the Malvern Hills, could not be said to benefit Midsummer Hill which was at least 1,100 yards away (the covenant also being held to be void for uncertainty). 132 [1974] 1 WLR 798. 133 In Earl of Leicester v Wells-next-the-Sea UDC, unchallenged affidavit evidence; in the other three cases, witness evidence. 134 [1922] 2 Ch 309. 135 [1962] Ch 115. 136 [1973] Ch 110. 137 [1974] 1 WLR 798.

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The current rules in relation to transmissibility 1.44 term in the broad and popular sense’. Brightman J, after referring to the judgment of Romer J in Everett v Remington,138 said of the latter words: ‘Their purpose seems to be to restrict the right to enforce the covenant to the person who is properly to be regarded from time to time as the owner of, in substance, the Wrotham Park estate, as distinct from lessees and purchasers of parts thereof, and to annex the benefit of the covenant to such estate.’ Brightman J then found as a fact that at the time the covenant was entered into in 1935, the Wrotham Park Estate then included all the land (apparently consisting of many hundred acres) which had subsequently been built upon and sold to individual purchasers and that the bulk of the remainder of the Estate was vested in the claimant company. From Brightman J’s above observations it would seem to follow that, at the time of the proceedings, the land treated as capable of benefiting was (as a matter of construction of the covenant) confined to that part of the original Wrotham Park Estate which remained as an integral whole in the hands of the claimant company and did not extend to the individual plots which had been sold off. 1.43 In other cases, the words of covenant have been more specific in confining the benefit to ‘the land of the vendor for the time being remaining unsold’ so that the construction issue has been avoided. Thus, in Marquess of Zetland v Driver,139 on a sale by the tenant for life under a settlement of a small part of the settled land, the vendor took a covenant which was expressed to be for the benefit and protection of ‘such part or parts of the lands in the borough, township or parish of Redcar then subject to the settlement as shall for the time being remain unsold or shall have been sold by the vendor or his successors in title with the express benefit of the covenants’.140 Similarly, in Cryer v Scott Bros (Sunbury) Ltd,141 the covenant was expressed to be ‘for the benefit of the remainder of the land comprised in the above title or the part thereof for the time being unsold’ and was treated as annexed only to the last part remaining unsold.142 1.44 Again, in the Lands Tribunal case of Re Wrighton’s Application,143 a covenant (of which modification was sought under section 84(1) of the Law of Property Act 1925) contained in a conveyance of 1911 was expressed to be made ‘with Sarah Anne Chattock her heirs executors administrators and assigns and the owner or owners for the time being of the land and premises forming the residuary real estate of Thomas Piercy Chattock situate at Solihull’. Between 1919 and 1944 the trustees of the Chattock residuary estate sold off various plots of land forming part of the residuary estate subject to a covenant similar in effect to the 1911 covenant, including the plots owned by 11 objectors all of whom claimed to be entitled to the benefit of the covenant. The President of the Lands Tribunal rejected their claims on the ground that having regard to the terms of the 1911 covenant and to the terms of the covenants (to the like effect) contained in the later conveyances, he was ‘forced to the conclusion that they [the stipulations in the 1911 covenant] were imposed for the benefit of the vendors and not for the benefit of parts of the land forming the estate after it had been sold off’. 138 139 140 141 142

[1892] 3 Ch 148 at 157. [1939] Ch 1, CA. See, further, para 6.85 below. (1986) 55 P&CR 183, CA. Although passing to a transferee on a transfer of the whole (fairly small) unsold land, although it is not clear why. 143 (1961) 13 P&CR 189 (Erskine Simes QC).

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1.45  Meaning of ‘restrictive covenant’ etc Similarly, in Roake v Chadha,144 on a sale of a plot forming part of the vendors’ Sudbury Court Estate, the purchaser entered into a restrictive covenant ‘with the Vendors but so that this covenant shall not enure for the benefit of any owner or subsequent purchaser of any part of the Vendors’ Sudbury Court Estate at Wembley unless the benefit of this covenant shall be expressly assigned’. It was held that the benefit had been effectively so confined.145 In this connection, imprecise language can give rise to difficult questions of construction whose resolution can frequently only be achieved by adducing extensive evidence of the surrounding circumstances. 1.45 In Re Jeff’s Transfer (No 2),146 the benefited land was described as ‘the remainder of Chorleywood Estate (Loudwater) belonging to the vendor’ and in Eagling v Gardner147 the benefited land was described as ‘remainder of the Mimms Hall Estate of the Vendor’.148 The question in each case was whether the benefited land consisted only of that part of the estate as was for the time being in the ownership of the vendor or whether it extended to the whole of the estate originally owned by the vendor including those parts which, at the date of the covenant, had already been sold off. In each case, the claimant was the owner of a part sold off and his success therefore depended upon establishing the latter construction. Prima facie, it might have been expected, since the words being construed in each of the two cases were to all intents and purposes identical, that the answer to the question would have been the same in each case. But according to the ordinary rules of construction, the meaning to be accorded to words in a document depends upon all the surrounding circumstances in which the document was executed so that identity of construction of any given set of words is never guaranteed.149 In the two instant cases, those surrounding circumstances were, on the evidence, found to differ markedly with the result that in the first case the words were construed restrictively as excluding any part of the estate which, at the date of the covenant, had already been sold off whilst in the second case, the words were given the wider meaning and treated as comprehending the parts of the estate which had already been sold off.150 1.46

See also the cases referred to at paras 6.86–6.89 below.

144 [1984] 1 WLR 40 (HH Judge Paul Baker QC sitting as a High Court judge). 145 Such formulas as those contained in the last two cases have been common for many years and were held, in the last-cited case, to be effective to negative annexation to the whole of the land under s 78(1) of the Law of Property Act (as to which see Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594, CA, discussed in Chapter 6). As Brightman LJ said in the latter case, at p 606, ‘I can understand that a covenantee may expressly or by necessary implication retain the benefit of a covenant wholly under his own control, so that the benefit will not pass unless the covenantee chooses to assign’. The object of retaining such control is, usually, in order to have the exclusive power of negotiating any subsequent releases of the restrictions. 146 [1966] 1 WLR 841 (Stamp J). 147 [1970] 2 All ER 838 (Ungoed-Thomas J). 148 See also Allen v Veranne Builders Ltd [1988] NPC 11, Browne-Wilkinson V-C (covenant with vendor as owner of the unsold parts of an estate). 149 See Chapter 11. 150 In the Eagling and Allen cases it was found that there was a building scheme, thus entitling the claimant to enforce the covenants in question. The moral of these cases is clear, namely, that if expensive litigation is to be avoided, the draftsman should spell out exactly what he means. As to the drafting of covenants, see Chapter 11.

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The current rules in relation to transmissibility 1.48 1.47 In the case of covenants entered into since 1925 which answer the description of ‘relating to any land of the covenantee’,151 such covenants are, under section 78(1) of the Law of Property Act 1925, ‘deemed to be made with the covenantee and his successors in title and the persons deriving title under him or them, and shall have effect as if such successors and other persons were expressed.’ In view of the decision of the Court of Appeal in Federated Homes Ltd v Mill Lodge Properties Ltd,152 it would now seem that whenever that section applies,153 the presumption that the whole of the land in question is capable of being benefited will also apply. In all cases, however, the presumption remains a presumption, and if the evidence  shows that in reality there was no benefit to retained land of the covenantee, the requirement that the covenant must be taken for the benefit of such land will not be satisfied. 1.48 By way of example, in Cosmichome Ltd v Southampton City Council154 the BBC acquired land for use as a broadcasting centre site and entered into a covenant with the transferor confining the use of the site to a broadcasting centre and restricting the use to the BBC or someone exercising the BBC’s franchise. The covenant was expressed to be for the benefit and protection of so much of the adjoining or adjacent land of the Council as was capable of being benefited thereby. The BBC sold the site and its purchaser sought a declaration that this covenant was not enforceable against it. Sir William Blackburne, sitting as a High Court judge, accepted that where, as here, the restrictive covenant was expressed to be for the benefit and protection of so much of the adjoining or adjacent land of the covenantee as is capable of being benefited, the court starts with the assumption that the restriction is capable of doing this, and quoted the words from Marten v Flight Refuelling Ltd155 at pp 136–137 set out above. He accepted, at p 2442, that the burden was on the person who seeks to challenge the assumption to prove that, notwithstanding that a restriction is expressed to benefit the covenantee’s retained land, it does not in fact do so and quoted from the passage of Sargant J in Lord Northbourne v Johnston & Son156 also set out above. He also noted the importance of respecting the apparent acceptance by the original covenantor and the original covenantee at the time it is entered into, that the restriction was intended to and was capable of benefiting the covenantee’s land was emphasised by Brightman J in Wrotham Park Estate Co Ltd v Parkside Homes Ltd.157 The Judge went on to consider, however, whether, notwithstanding this, the claimant had discharged the burden of showing that, despite the wording of the covenant, the restrictive covenant was not intended, at the time it was imposed,

151 As to the meaning of these words, see the discussion below, para 6.28 et seq. 152 [1980] 1 WLR 594, CA. This decision is discussed below, para 6.31 et seq, in the context of the annexation of the benefit of covenants. 153 The question when s 78(1) applies is considered fully below, para 6.28 et seq. 154 [2013] 1 WLR 2436. 155 [1962] Ch 115. 156 [1922] 2 Ch 309 at p 319. 157 [1974] 1 WLR 798 at p 808.

33

1.49  Meaning of ‘restrictive covenant’ etc to benefit the covenantee’s adjoining or adjacent land or, if it was, that it was incapable of doing so. Having reviewed the relevant evidence, he concluded (in para 36) that: ‘the restrictive covenant cannot be said to have benefited the Council’s adjoining or adjacent land when it was imposed in 1989 and it does not do so now. Moreover, the balance of the evidence strongly suggests that the reason for its imposition was twofold: to seek thereby to maintain the BBC at the Site and to serve as the lever for extracting a payment if and when the BBC should seek to have it removed and go elsewhere. As such it is in the nature of a money payment obligation rather than a restrictive covenant properly so called. It is not intended to protect or preserve the amenity or value of the Council’s adjacent land. It does not bind successors in title to the BBC.’ Accordingly, the court granted a declaration that the restrictive covenant was not enforceable against the claimant (the purchaser of the land from the BBC) or any successor in title to it. 1.49 In the absence of such evidence, though, the presumption will apply. For an example of a recent case decided on the basis of it, see Bryant Homes Southern Ltd and Others v Stein Management Ltd and Others,158 distinguishing Cosmichome (at para 25). 1.50 Where there is no express indication in the words of covenant that it was  taken for the benefit of any particular land, in such a case, it will be necessary for the claimant to adduce evidence to show: (a) precisely what land belonged to the covenantee at the date of the covenant; and (b) that the covenant was capable of benefiting that land, or the part of it now owned by the claimant. As to (a), extrinsic evidence is admissible (and must be adduced) to show what land was owned by the covenantee at the date of the covenant.159 As to (b), evidence to establish, as at the date of the covenant, one or more of the several kinds of potential benefit considered above will be required. Where the transmission of the benefit of the covenant is by annexation (see Chapter 6) the land must actually be defined in the document containing the covenant so as to be easily ascertainable (see para 6.35 et seq below).

B: The estate or interest in the benefited land which the covenantee must own 1.51 At common law, for the benefit of a covenant relating to land to be capable of running with the land, it was essential that the covenant was entered into with the owner of a legal estate in the benefited land.160 But in equity,

158 [2016] EWHC 2435 (Ch). 159 Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd [1952] Ch 286 (Upjohn J); Shepherd Homes Ltd v Sandham (No 2) [1971] 2 All ER 1267, per Megarry J at 1275b–d. 160 See Onward Building Society v Smithson [1893] 1 Ch 1, CA and see also Chapter 26.

34

The current rules in relation to transmissibility 1.51 the benefit of a covenant will be capable of running provided that the original covenantee has either a legal or an equitable interest in the benefited land.161 The estates and interests ownership of which by the covenantee are sufficient for this purpose in equity are as follows. ●●

●●

●●

●●

Legal fee simple estate Clearly the ownership of such a legal estate will satisfy the requirements of equity since (where it is consistent with equitable principles to do so) equity follows the law. Equitable fee simple estate In the case of restrictive covenants, equity treats an equitable owner as qualifying for the same recognition as a legal owner. Thus, the owner of an equity of redemption who, before 1926, had conveyed the legal estate to a mortgagee by way of legal mortgage, was a competent covenantee for the purpose of the running of the benefit of a restrictive covenant in favour of subsequent owners.162 So also is a contracting purchaser of the land to be benefited,163 since such purchaser has an equitable interest in the land corresponding in size to the legal estate contracted to be purchased.164 Legal or equitable fee simple held by trustees It is immaterial whether the covenantee is a beneficial owner of the estate or interest or a trustee provided that, in the latter case, the covenantee has power under the trust to take a restrictive covenant in the circumstances in question.165 Contracting vendor One case of trusteeship calling for special mention is that of a vendor who, before a covenant for the benefit of his land is entered into, contracts to sell the whole or part of it to a purchaser. Such a vendor is, at any rate for certain purposes, a constructive trustee of the land for the purchaser.166 As indicated above, the purchaser would thus himself be a competent covenantee. But there can be little doubt that if the covenant is entered into, not with the purchaser, but with the vendor, the vendor’s interest which he still holds pending completion will also be sufficient to satisfy the present requirement so as to enable the covenant to run with the land.

161 However, the requirement of some interest in the land would preclude the possibility of a covenant benefiting future acquired land in which the covenantee currently had no interest: cf Voice v Bell (1993) 68 P&CR 441, CA (an easement case). 162 Rogers v Hosegood [1900] 2 Ch 388, CA. 163 This was assumed in Re Rutherford’s Conveyance [1938] Ch 396 (Simonds J), although on the facts no covenants were held to have been entered into. 164 See Walsh v Lonsdale (1882) 21 ChD 9. 165 Thus, under s 49(1)(b) of the Settled Land Act 1925, a tenant for life or statutory owner under the Settled Land Act is a competent covenantee in respect of the settled land where the restrictive covenant is imposed on a sale or other disposition and trustees for sale and personal representatives have the like power by virtue of s 28(1) of the Law of Property Act 1925 and s 39(1) of the Administration of Estates Act 1925. In Marten v Flight Refuelling Ltd [1962] Ch 115, the original covenantees were special executors holding for an infant tenant in tail in possession and in Marquess of Zetland v Driver [1939] Ch 1 and Earl of Leicester v Wells-nextthe-Sea UDC [1973] Ch 110, the original covenantee was in each case a tenant for life under the Settled Land Act 1925. 166 See Shaw v Foster (1872) LR 5 HL 321 especially per Lord Hatherley at p 356; Lysaght v Edwards (1876) 2 ChD 499; Rayner v Preston (1881) 18 ChD 1; Lake v Bayliss [1974] 1 WLR 1073.

35

1.51  Meaning of ‘restrictive covenant’ etc

●●

●●

●●

Thus, if X, the freehold owner of Plots 1 and 2, contracts to sell Plot 1 to A on terms that B enters into restrictive covenants for the benefit of Plot 2 and X then contracts to sell Plot 2 to B, then provided the conveyance or transfer of Plot 1 to A (imposing the covenants) takes place before the conveyance or transfer of Plot 2 to B, B will get the benefit of the covenants. On the other hand, if (whether because of unavoidable delay or otherwise) completion of the sale of Plot 1 to A takes place after completion of the sale of Plot 2 to B, then since at the date when the covenants are entered into by A, X no longer had any interest whatsoever in Plot 2, the covenants would (in the absence of a building scheme167) be wholly ineffective.168 Reversioner subject to a lease The case of Regent Oil Co Ltd v JA Gregory (Hatch End) Ltd169 indicates that such a reversion may be a sufficient interest at least to enable the reversioner to enforce a restrictive covenant against a sublessee. Legal leasehold estates and equitable interests corresponding to pre-1926 legal estates less than a fee simple Where the estate or interest of the covenantee (having regard to the capacity in which he is the recipient of the benefit of the covenant) is less than equivalent to the fee simple estate, then the benefit of the covenant can run but only during the subsistence of the maximum duration of that lesser estate or interest.170 The reason for this is plain, namely, that no successor from the covenantee can be in any better position than the covenantee himself and since the duration of the covenantee’s proprietary right of enforcement will be confined to the duration of his interest in the benefited land, that is the maximum benefit which the covenantee can pass on. There may, of course, be more than one covenantee and in such a case, each covenantee’s position will depend upon the particular estate or interest which he owns. It would seem that neither the subsequent extension nor the premature determination of any such limited interest will affect the period during which the benefit of the covenant will run with the land.171 Mortgagees In the case of a mortgage effected by way of demise or subdemise for a long term of years, it is conceived that restrictive covenants entered into with such a mortgagee will enure for the benefit of the mortgaged property for the full duration of the term granted by the mortgage notwithstanding

167 If a building scheme existed then, in the case supposed, A would be deemed to be covenanting not only (ineffectively so far as successors are concerned) with X but also with B. As to building schemes generally, see Chapter 8. 168 Millbourn v Lyons [1914] 2 Ch 231. 169 [1966] Ch 402 at 433. See also Shepherd Homes Ltd v Sandham (No 2) [1971] 2 All ER 1267 at 1275a–b. 170 See Golden Lion Hotel (Hunstanton) Ltd v Carter [1965] 1 WLR 1189. 171 As to the effect of the statutory continuance of a lease under s 24 of the Landlord and Tenant Act 1927, see City of London Corpn v Fell [1994] 1 AC 458 and as to the effect of a renewal of a lease, see Collins v Plumb (1810) 16 Ves 454. Quaere in the latter case, whether if the renewal is pursuant to an option contained in the lease it makes any difference. As to the surrender and simultaneous grant of a new lease, see Birmingham Joint Stock Co v Lea (1877) 36 LT 843 and as to merger by acquisition of the reversion, the owner of the freehold land not being a party, see Golden Lion Hotel (Hunstanton) Ltd v Carter [1965] 1 WLR 1189 (Cross J).

36

The current rules in relation to transmissibility 1.51

●●

that the mortgage is paid off and the mortgage term comes to an end.172 Further, it is considered that the position would be the same in the case of a charge by way of legal mortgage by virtue of the operation of section 87(1) of the Law of Property Act 1925. The position in the case of an equitable charge is less clear but it seems likely that a restrictive covenant entered into with a mortgagee under such a charge would correspond in duration to the interest charged.173 Squatters I: Covenants entered into by the squatter before gaining title to the land The theory of the law in relation to such persons is that they have seisin as fee simple owners subject only to proof by the paper owner of his title paramount. Their estate is not a limited estate but a fee simple estate good against the whole world except the owner with title paramount and covenants entered into with them will enure for a corresponding interest. Accordingly, if and when, on the extinguishment by lapse of time of the title paramount,174 the estate becomes indefeasible, the covenants entered into by them will become similarly indefeasible. In the case of registered land, this will not occur until the squatter becomes registered as proprietor of the land.175 It is considered, however, that if the squatter is ousted by the true owner before the latter’s title is extinguished, then a covenant entered into by him would not run in favour of such owner since he is neither an original covenantee nor a successor in title to, or person claiming under, the squatter – the squatter’s former ‘ownership’ has simply come to an end, and with it the covenants.176 II: Squatter who has obtained title by adverse possession A squatter who has obtained title by adverse possession177 will be bound by restrictive covenants created by, or binding on, the owner before he gains title, to the same extent that any other person who obtains title to the land would be bound. Although he does not obtain the estate of the previous owner (rather that estate is extinguished by the Limitation Act178) the burden of the restrictive  covenants is not incident to the extinguished owner’s estate (which would mean they would be extinguished with that estate), but, rather, paramount to the previous owner’s title, and all the Act extinguishes

172 See the cases cited in footnote 171 above. 173 In the pre-1925 legal mortgage case of Lord Manners v Johnson (1875) 1 ChD 673, a purchaser from mortgagees with whom a restrictive covenant had been entered into by another purchaser was held entitled to enforce the covenant. In that case, transferees of the mortgagees were also held entitled to enforce the covenant but it does not appear that the continued existence of the mortgage was the basis of the purchaser’s right to enforce. Further, in the pre-1926 case of Long v Gray (1913) 58 Sol Jo 46, a covenant entered into with the owner of a legal life interest under a settlement was held to enure for the benefit of the fee simple estate. 174 Under s 17 of the Limitation Act 1980. 175 See Land Registration Act 2002, s 96; also s 97 and Sch 6. 176 However, in the case of post-1925 covenants, on retaking possession, the true owner may thereby become an ‘occupier’ within the meaning of s 78(1) of the Law of Property Act 1925. See below para 6.27, and for a discussion on this subsection, see below, para 6.28 et seq. 177 In the case of registered land, by becoming registered proprietor. 178 Tichborne v Weir [1891–94] All ER Rep 449. The current Limitation Act is the Limitation Act 1980 (s 17).

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1.51  Meaning of ‘restrictive covenant’ etc is the title of the previous owner. The right to enforce these covenants was no part of his title, and they are therefore enforceable against the squatter who subsequently becomes owner of the land by adverse possession: see Re Nisbet & Potts’ Contract.179 So far as the benefit of restrictive covenants is concerned, a squatter who gains title to registered land by adverse possession and is registered as proprietor of the land180 will be entitled as registered proprietor to all the rights relating to that land, and entitled therefore to enforce any restrictive covenants benefiting the land to the same extent as any other owner. In the case of unregistered land (or registered land where the squatter’s title has not yet been registered), so far as the position in relation to covenants annexed to land after 1925 is concerned, section 78(1) of the Law of Property Act 1925 provides as follows: ‘Benefit of covenants relating to land. (1) A covenant relating to any land of the covenantee shall be deemed to be made with the covenantee and his successors in title and the persons deriving title under him or them, and shall have effect as if such successors and other persons were expressed. For the purposes of this subsection in connexion with covenants restrictive of the user of land “successors in title” shall be deemed to include the owners and occupiers for the time being of the land of the covenantee intended to be benefited’ [Emphasis added].

●●

Aside from this (for example, where covenants have been entered into prior to 1926) restrictive covenants would seem not to be enforceable by the squatter even where he has gained title (subject to the particular wording of the covenant) as he does not obtain the title of the dispossessed owner or therefore his rights appurtenant to the land but an independent title.181 However, by registration of the land and becoming the registered proprietor the squatter would become entitled to enforce them (as referred to above). Non-proprietary occupiers (licensees) By this expression is meant persons who occupy land otherwise than by virtue of their ownership of any legal estate or equitable interest conferring a right to occupy and who do not claim to be in adverse possession of the land. Such persons will occupy by virtue of one or other of the various species of licence which can subsist in respect of land and will accordingly have no proprietary interest in the land.182 It follows that there can be no question of the benefit of a restrictive covenant entered into with such an occupier running with the land’.183

179 [1906] Ch 386 (CA), and also the clear exposition of the law by Farwell J at first instance reported at [1905] 1 Ch 391. 180 Under the Land Registration Act 2002, or earlier under the Land Registration Act 1925. 181 See Fairweather v St Marylebone Property Co Ltd [1963] AC 510 at p 535. 182 See National Provincial Bank Ltd v Ainsworth [1965] AC 1175. 183 See Forster v Elvet Colliery Co Ltd [1908] 1 KB 629, CA per Farwell LJ at p 641. This case subsequently went to the House of Lords sub nom Dyson v Foster [1909] AC 98 but the position of occupiers was not there canvassed.

38

The current rules in relation to transmissibility 1.51

●●

●●

Further, it is considered highly doubtful whether such an original covenantee  could have enforced a covenant so entered into before 1926 against a successor in title of the covenantor184 for two reasons: first, because  the covenant could not be said to relate to any ‘land’ of the covenantee185 and, second, because it would be inconsistent with principle to recognise a mere licensee, who had no interest in the land which he occupied under the licence, as having, in respect of that licence, a proprietary interest in the land of the covenantor. In the case of post-1925 covenants, it is considered the position remains the same since whilst some change in the law permitting mere occupiers to enforce restrictive covenants has been brought about by section 78(1) of the Law of Property Act 1925,186 that section only applies to covenants which when created relate to ‘land of the covenantee’. The definition of ‘land’ contained in section 205(1)(ix) of the Act clearly does not include a mere licence187 – and it is only the licence which is ‘of the covenantee’. Tenants at will Since 1925, it would seem that a tenancy at will cannot subsist at law since such an interest does not fall under any of the provisions of section 1(1) or (2) of the Law of Property Act 1925. Presumably it now subsists as an equitable interest in the land by virtue of section 1(3) of that Act and, if so, this would appear to qualify such an interest as sufficient to enable the benefit of a restrictive covenant entered into with the tenant at will to be capable of running with the land during the subsistence of the tenancy at will.188 In this respect, therefore, such a tenant is in a superior position to a licensee. Owners of rentcharges In Grant v Edmondson,189 it was finally190 held by the Court of Appeal that the benefit of a positive covenant to pay the sum due under a perpetual rentcharge is not capable of running with the rentcharge and so could not be enforced by a subsequent owner of the rentcharge.191 Although there is no specific authority on the question whether the benefit of a restrictive covenant entered into by a freeholder with a person entitled to a rentcharge192 is capable of running with the rentcharge (and with the

184 Of course, as against the original covenantor no problem as to enforcement arises: see Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173. 185 With the result that the decision in Formby v Barker [1903] 2 Ch 539, CA would apply so as to preclude enforcement. 186 See the second paragraph of s 78(1), set out at para 6.27 below. 187 Cf National Provincial Bank Ltd v Ainsworth [1965] AC 1175. 188 Cf Cobb v Lane [1952] 1 All ER 1199. 189 [1931] 1 Ch 1, CA. 190 The decisions in Brewster v Kidgill (1698) 12 Mod Rep 166 and Milnes v Branch (1816) 5 M & S 411 had already gone a long way to the same effect. 191 Such owner therefore being left only with the remedies of distress and entry for the purpose of taking the income which are now conferred by s 121 of the Law of Property Act 1925, re-enacting with amendments s 44 of the Conveyancing Act 1881. 192 Sales in consideration of a rentcharge, rather than a capital sum, were, prior to 1926, common in certain places in the north and west of England including Manchester, Liverpool, Bath and Bristol and, in order to preserve the value of the rentchargee’s security, it was usual for the purchaser/rentchargor to enter into both positive and restrictive covenants with the vendor/ rentchargee, such as to pay the annual sums due under the rentcharge, to keep the premises in repair, not to carry on any offensive trade and the like. For a precedent, see Key and Elphinstone’s Precedents in Conveyancing (15th edn), pp 817 et seq. By reason of the

39

1.51  Meaning of ‘restrictive covenant’ etc

●●

193

194 195 196

40

burdened land), the principle of the above decision would seem to be equally applicable to restrictive covenants. However, it might be argued that there is no sound reason in principle for a court which was being asked to exercise its equitable jurisdiction to grant an injunction for the protection of a proprietary interest in land, to distinguish in this respect193 between corporeal hereditaments (and their equitable equivalents) on the one hand and incorporeal hereditaments (and their equitable equivalents) on the other. On the other hand, if, as seems to be the case,194 negative easements are regarded as the main model for developments in the law of restrictive covenants, then the absence of anything analogous to a corporeal dominant tenement might, by analogy, be regarded as fatal to such protection. In Western v MacDermott,195 it was held that the owner (in 1866) of a rentcharge with whom restrictive covenants had (in 1767) been entered into by the predecessor in title of the defendant, had no power to extinguish the restrictive covenant by release since there was a building scheme under which other plot owners were entitled to the benefit of the covenant.196 It  was thus assumed, although the point was not fundamental to the decision, that the rentcharge owner was (apart from any release) entitled to enforce the restrictive covenant. By section 2(1) of the Rentcharges Act 1977, no new rentcharge can, except in the five cases set out in section 2(2), be created on or after the 22 August 1977 and provision is made in section 3 for the extinguishment of existing rentcharges except variable rentcharges (as defined in subsections (4) and (5)) and rentcharges falling within any of the five excepted classes set out in section 2(2). For present purposes, the most significant of the section 2(2) exceptions is that of the ‘estate rentcharge’ (as defined in section 2(4)) since this type of rentcharge has been by far the most commonly created in the last 40 years. It is likely, therefore, that the issue under consideration will, in due course, fall to be specifically decided by the courts. Subsequently diminished ‘interests’ of the covenantee which are nevertheless sufficient to justify continued enforceability Assuming that the original covenantee initially had a sufficient interest in the benefited land to render a restrictive covenant capable of being enforced against successors of the covenantor, the question arises as to what minimum ‘interest’ such covenantee must continue to hold in order to preserve such ability to enforce. I: Covenantee becoming a mere non-proprietary occupier (licensee) Although an occupier holding under a licence has no sufficient interest to enable either the benefit or the burden of a restrictive covenant entered difficulties highlighted in Grant v Emdondson, it became common practice to annex a right of re-entry not only to the non-payment of the rentcharge but also to the non-performance and non-observance of the covenants as in the precedent cited. Of course, all the other requirements for transmissibility considered above would also have to be satisfied and the nature of the incorporeal hereditament (such as a rentcharge) would considerably restrict the number of restrictive covenants which could be said to ‘touch and concern’ the rentcharge rather than being merely collateral. But, in the case of a rentcharge, if the restrictive covenant in question can be said to have a direct bearing on the preservation of the value of the rentcharge, then this test would prima facie be satisfied. See above, paras 1.7–1.8. (1866) LR 1 Eq 499, at 506; affd (1866) LR 2 Ch App 72. As to building schemes, see Chapter 8 below.

The current rules in relation to transmissibility 1.52 into with him in that capacity to run against a successor in title from the covenantor,197 nevertheless it is considered that such an ‘interest’ is sufficient to continue to qualify him to enforce a covenant already validly entered into. For example, if a restrictive covenant had initially been entered into with a covenantee having a qualifying interest in benefited land, then if such covenantee subsequently transferred his interest in the land but remained in occupation as a licensee, it is considered he could still enforce the covenant against a successor in title of the covenantor even before 1926.198 Since 1925, a licensee would qualify for protection as an ‘occupier’ ‘for the time being of the land’ under section 78(1) of the Law of Property Act 1925 (and the words of this provision seem wide enough to include an occupier who was an original covenantee). II: Covenantee ceasing to own but remaining subject to continuing personal liability under a subjective restrictive covenant In Spencer v Bailey,199 the claimant, who was originally the freehold owner  of land known as the Earlsfield Estate, granted a lease of part of the land, taking from the lessee a restrictive covenant expressed to be for the benefit of the rest of the Earlsfield Estate. Subsequently, the claimant sold off other parts of the estate and covenanted with the purchasers that the demised land would only be used for the purposes permitted by the restrictive covenant. Later, after the claimant had sold the freehold reversion of the demised land, an assignee of the lease infringed the restrictive covenant and the claimant brought an action to enforce it. Romer J held that the claimant was entitled to enforce it since his liability under the covenants with the subsequent purchasers gave him a sufficient interest to do so.

4 The covenant must in fact benefit land in which the claimant has a sufficient interest at the time of enforcement of it200 1.52 This requirement ensures that the raison d’être of enforceability as against a successor of the covenantor, namely benefit to land in which the covenantee has a sufficient interest, continues to hold good in the case of the claimant at the time of actual enforcement. 197 Of course, as against the original covenantor, no problem as to enforcement arises in such a case: see Winter Garden Theatre (London) Ltd v Millennium Productions Ltd [1948] AC 173. 198 See Spencer v Bailey (1893) 69 LT 179. The facts appear in the next section. In holding that the claimant remained entitled to enforce the restrictive covenant on the basis of his continuing liability under the other covenants, Romer J was recognising that a purely personal liability was sufficient qualification and it is conceived that a purely personal right under a licence would similarly qualify for protection. See also Fairclough v Marshall (1878) 4 Ex D 37 where the owner of land benefited by a restrictive covenant was held entitled to enforce the covenant without joining his mortgagee although he had mortgaged the land by way of conveyance subject to a proviso for reconveyance on repayment of the loan. 199 (1893) 69 LT 179 (Romer J). 200 This is a requirement both of the right to enforce the covenant and of the prima facie availability of the remedy of injunction by reference to which alone, as against a successor from the covenantor, it can be enforced. See, eg, Lord Northbourne v Johnston & Son [1922] 2 Ch 309; Re Ballard’s Conveyance [1937] Ch 473; Marten v Flight Refuelling Ltd [1962] Ch 115; Re Gadd’s Land Transfer [1966] Ch 56; Earl of Leicester v Wells-next-the-Sea UDC [1973] Ch 110; Wrotham Park Estate Co v Parkside Homes Ltd [1974] 1 WLR 798.

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1.53  Meaning of ‘restrictive covenant’ etc The presumption of benefit to the land referred to above which applies at the date the covenant is entered into applies equally to the presumed continuance of the benefit as at the date of enforcement provided that the claimant either has the whole of the land expressed to be benefited or (if he has part) the covenant was expressed to be for the benefit of the land or any part.201 The categories of benefit which may be relied upon for this purpose include each of the three kinds referred to in para 1.27 above (and, if moral benefit is sufficient that also – this question is referred to in paras 1.31–1.33 above) and reference may be made to the cases there cited. 1.53 In Re Gadd’s Land Transfer,202 in an application under section 84(2) of the Law of Property Act 1925 for a declaration as to the enforceability or otherwise of certain restrictive covenants, the only relevant benefited land consisted of the site of an unadopted service road known as Bridle Lane, Loudwater, Hertfordshire, which had been transferred to the defendant company in consideration of the sum of 10 shillings together with the benefit of a covenant restricting to one house development on a piece of land having a frontage to Bridle Lane. This land was later purchased by the plaintif company with a view, subject to planning permission, to erecting 76 houses on it. In holding that the site of the road was effectively benefited by the covenant, Buckley J took into account (i) the fact that increased user of the road would result in increased wear and tear with consequent risk of liability to road users if the road were not properly maintained, (ii) the fact that if the road were not properly maintained, there would be an increased likelihood of the road being taken over by the local authority, and (iii) the fact that an increase in the amount of traffic would decrease the defendant company’s chances of being able to dispose of the road. The benefit therefore consisted substantially of an asset of nominal value not being at risk of being turned into an asset of negative value. On the other hand, if the only land owned by the claimant consists of the subsoil of an adopted road, then this would be insufficient to establish a locus standi.203 1.54 It is considered that the same would apply to a ‘ransom strip’ to which the benefit of covenants was expressed to be annexed but which was retained primarily with a view to preserving bargaining power for the release or variation of the covenants rather than the benefit of the land as such.204

201 See Cryer v Scott Bros (Sunbury) Ltd (1986) 55 P&CR 183, at 196–197 and 202. In that case, the remaining part of the benefited land was very small but in the absence of any evidence to show that it could not benefit the presumption was not displaced. 202 [1966] Ch 56. 203 Kelly v Barrett [1924] 2 Ch 379. In such a case, the ownership of the surface and of the air space above to such a depth and height respectively as are required for highway purposes, will have vested in the highway authority, so that neither the land which is retained nor the highway land itself would, on the above tests, be capable of benefiting from any covenant. As to the depth of the road surface land which, on adoption, vests in the highway authority, see Tithe Redemption Commission v Runcorn UDC [1954] Ch 383, and as to the height of the air space above to which the highway authority becomes entitled, see Wandsworth Board of Works v United Telephone Co (1884) 13 QBD 904 and Finchley Electric Light Co v Finchley UDC [1903] 1 Ch 437. 204 See paras 1.28–1.30 above.

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The current rules in relation to transmissibility 1.56

Difficulties for succeeding owners in establishing whether land held by them has the benefit of a covenant 1.55 If the benefited land is unregistered, there will be no register on which the benefit (as opposed to the burden) of the restrictive covenant can be entered and none from which it can by such means be discovered. In the case of registered land, prior to the Land Registration Act 2002 and the Land Registration Rules 2003 coming into force on 13 October 2003, an indication that land had the benefit of a restrictive covenant could be entered on the register of that land.205 Such an entry did not guarantee the land did have the benefit of the covenant (as the entry made merely stated that the covenant was ‘expressed to be for the benefit of the title in the land’), but it alerted subsequent owners to the likely existence of it.206 Since 13 October 2003, the benefit of a covenant cannot be entered on the register under rule 33 of the Land Registration Rules 2002, which provides that an entry may be made if the Registrar is satisfied ‘the right subsists as a legal estate and benefits the registered estate’, as the benefit of it is not a legal estate in land but merely an equitable interest. Where, however, it is clear to the Land Registry that a properly constituted building scheme has been created,207 the existence of this might be referred to in the register of the titles affected. If adjoining land is registered, the charges register of that land may reveal the existence of restrictive covenants which could benefit the searcher’s land. Beyond this, no assistance is likely to be available through the land registration system.

5 The words of covenant must be such as to show that the covenant was not intended to be personal to the original covenantee or to be confined to a category of persons to whom the claimant does not belong 1.56 In the oft-quoted classification of restrictive covenants contained in the judgment of Farwell J in Osborne v Bradley,208 the covenants were classified, in ascending order of degrees of enforceability, as follows: ‘(i) covenants imposed by the vendor for his own benefit, (ii) covenants imposed by the vendor as owner of other land of which that sold formed a part, and intended to protect or benefit such unsold land, and 205 Under s 40(3) of the Land Registration Act 1925. This would be indicated by note or notice on the property register. In order for this to be done, a certified copy of the deed creating the covenant had to be produced and the Land Registry satisfied the land in question was that benefited by it, by reference to a clearly defined building scheme (in relation to which, see Chapter 8) or otherwise. 206 Though the absence of such an entry would mean nothing, as the benefit did not have to be registered. 207 Building schemes are the subject of Chapter 8. 208 [1903] 2 Ch 446, at p 450, cited with approval in Reid v Bickerstaff [1909] 2 Ch 305; Sobey v Sainsbury [1913] 2 Ch 513; Kelly v Barrett [1924] 2 Ch 379; Re Ballard’s Conveyance [1937] Ch 473; Marquess of Zetland v Driver [1939] Ch 1.

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1.57  Meaning of ‘restrictive covenant’ etc (iii) covenants imposed by a vendor upon a sale of land to various purchasers who are intended mutually to enjoy the benefit of, and be bound by, the covenants.’ The third category is concerned with building schemes which are dealt with in Chapter 8. Of the other two categories, the position varies according to the date of the covenant.

Pre-1882 covenants 1.57 At common law and apart from statute, the benefit of a covenant relating to freehold land prima facie enured only in favour of the covenantee and his heirs and it was therefore essential that the intention for it to have a wider operation (with a correspondingly increased burden upon the covenantor) should clearly appear from the terms of the covenant. There was, however, no strict common law requirement of any express mention of assigns or successors in title and (perhaps by analogy to the corresponding position in the case of easements) the position seems to have been that provided the covenant, taken as a whole, evinced an intention that the benefit should enure in favour of successors, then that would be sufficient.209 However, depending on the context, the absence of any reference to assigns may be an indication that the covenant was intended to be personal to the covenatee. Thus, in Re Fawcett and Holmes’ Contract,210 the purchaser of a plot of land, after entering into certain covenants ‘for himself, his heirs, executors, administrators and assigns’ then covenanted in the same deed that he ‘the said George Fawcett, on erecting any buildings on the land, shall only erect’ buildings of a specified description. The Court of Appeal held that in view of the difference of language in the two sets of covenants, the latter was to be construed as a mere personal covenant by Fawcett. This case concerned the question whether the covenant was personal to the covenantor, but the same principle of construction would, it is considered, apply to the corresponding question in relation to the covenantee. In the case of pre-1882 restrictive covenants, therefore, whether the covenant is personal to the covenantee and his estate is a pure question of construction untrammelled by any requirement for the use of any particular formula.

Covenants entered into after 1881 and before 1926 1.58 In the case of covenants entered into between these years, the provisions of section 58 of the Conveyancing Act 1881 applied which provided as follows: ‘(1) A covenant relating to land of inheritance, or devolving on the heir as special occupant, shall be deemed to be made with the covenantee, his heirs and assigns, and shall have effect as if heirs and assigns were expressed.’

209 See Chudleigh’s Case (1595) 1 Co Rep 120a, at 122b; sub nom Dillon v Freine Poph 70. This was a case of a positive covenant in an action at law, but clearly the position in equity was no  more exacting. And see, as to the corresponding position in the case of the benefit of warranties of title, Bracton De Legibus Angliae f 17b. For leaseholds, see Caerns Motor Services Ltd v Texaco Ltd [1995] 1 All ER 247. 210 (1889) 42 ChD 150.

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The current rules in relation to transmissibility 1.62 Subject to satisfying the opening pre-condition to the operation of subsection (1), the effect of the subsection is that words of limitation211 are to be read into the covenant212 which, in effect, (in the case of freehold land) prima facie make it a fee simple covenant rather than a personal covenant with the result that the benefit can be transmitted to others.213

Post-1925 covenants 1.59 In the case of covenants entered into after 1925, section 78 of the Law of Property Act 1925 will apply and once it is shown214 that the covenantee did  in fact own land capable of benefiting from a restrictive covenant, then such  covenant is deemed to have been made ‘with the covenantee and his successors in title and the persons deriving title under him or them, and shall have effect as if such successors and other persons were expressed’. 1.60 Moreover, for good measure section 80(3) of the Law of Property Act 1925 provides that: ‘(3) The benefit of a covenant relating to land entered into after the commencement of this Act may be made to run with the land215 without the use of any technical expression if the covenant is of such a nature that the benefit could have been made to run with the land before the commencement of this Act.’ The implied premise underlying this provision would appear to be that before 1926 it was, or may have been, necessary to use a ‘technical expression’ in order to make a covenant run with the land but as has been seen, so far as restrictive (and, indeed, positive) covenants entered into between freeholders were concerned, there was no strict requirement. 1.61 Unless the provisions of section 78(1) of the Act can be excluded or modified by express provision contained in the covenant then it would seem to follow that class (i) covenants in Farwell J’s above classification can no longer be created. This question is considered further in Chapter 6.216

6 The covenant must have been entered into by a competent covenantor having a sufficient interest in the burdened (subjected) land 1.62 The question of (i) a ‘competent’ covenantor, and (ii) a ‘sufficient interest’ will be considered in turn. The particular position of (iii) a contracting 211 Using the expression ‘words of limitation’ in the technical sense of words enlarging the size of the right or interest granted as contrasted with the expression ‘words of purchase’ which enlarge the category of persons upon whom a right or interest is initially conferred. 212 See the judgment of Cozens-Hardy MR in Forster v Elvet Colliery Co Ltd [1908] 1 KB 629, CA, at 635 (dealing with the words implied by the section in the case of covenants relating to leasehold land). On the subsequent appeal to the House of Lords, affd sub nom Dyson v Forster [1909] AC 98, no reference was made to section 58 of the Conveyancing Act 1881. 213 This statutory provision is considered further in Chapter 6. 214 As to whether, for the purposes of this section, it must be so shown from the contents of the instrument imposing the covenant or whether extrinsic evidence is admissible for those purposes, see below, para 6.35 et seq. 215 In the sense provided for in section 80(4) of the Act. 216 See below, para 6.42 et seq.

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1.63  Meaning of ‘restrictive covenant’ etc purchaser, and (iv) a covenantor having no interest in, or occupation of, part of the land will then be considered.

(i)  Competent covenantors 1  Beneficial owners 1.63 Beneficial owners clearly have the power to enter into restrictive covenants.

2  Fiduciary owners 1.64 Tenants for life and statutory owners under the Settled Land Act 1925, trustees for sale and personal representatives all have statutory power, on a sale or other disposition of or dealing with part of the trust or estate property, to enter into any restrictive covenant binding the whole or any part of the trust or estate property which is retained.217 This power is conferred on tenants for life and statutory owners by section 49(1)(b) of the Settled Land Act 1925, and the same power also extends to trustees for sale by virtue of section 28(1) of the Law of Property Act 1925 and to personal representatives by virtue of section 39(1)(ii) and (iii) of the Administration of Estates Act 1925. There appears to be no statutory power for any such owner to enter into a restrictive covenant except on the occasion of an authorised sale, disposition or dealing but an application to the court may be made under section 64 of the Settled Land Act 1925 for an order approving such a transaction. If a tenant for life or statutory owner purports to enter into a restrictive covenant  otherwise than on the occasion of a sale, disposition or dealing authorised by the Settled Land Act 1925, then the covenant will bind his equitable beneficial interest only to the exclusion of the legal estate vested in him.218 But a restrictive covenant entered into in similar circumstances by trustees for sale or personal representatives will be effective to bind the legal estate vested in them unless and until the covenant is set aside by the court on the ground that it amounted to a breach of trust.219

3  Companies incorporated under the Companies Acts 1.65 Under section 39(1) of the Companies Act 2006 (and since the coming into operation of section 35 of the Companies Act 1985, as substituted by section 108(1) of the Companies Act 1989), the validity of an act done by a company220 can no longer be called into question on the ground of lack of

217 As well as (under the same statutory provision) to take covenants from the purchaser binding on the land which is sold. 218 Settled Land Act 1925, s 18(1)(a). 219 Section 18 of the Settled Land Act 1925 does not apply to trustees for sale or personal representatives. Such fiduciary owners have the legal estate vested in them at common law and can make any disposition or dealing subject only to its liability to be set aside if not authorised. 220 Subject to certain exceptions in the case of companies that are charities: see s 42 of the Companies Act 2006 (and formerly s 35(4) of the Companies Act 1985, as substituted).

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The current rules in relation to transmissibility 1.67 capacity by reason of anything in the company’s memorandum. Restrictive covenants entered into by such companies will accordingly have the same effect as if they had, in the like circumstances, been entered into by an individual of full capacity.

4 Local authorities and other corporations created by special Act of Parliament 1.66 In the case of such corporations, their capacity to enter into valid restrictive covenants will depend upon the existence of an enabling power conferred by, or pursuant to, the provisions of their parent Act. The most commonly encountered corporations of this kind are public corporations including, in particular, local authorities whose powers generally come from the provisions of the Local Government Act 1972, as amended,221 and the Localism Act 2011. In the case of covenants having been entered into at any earlier time, however, it will be necessary to have regard to the provisions of the relevant enabling Act operative at that time. Thus, in Davis v Leicester Corpn,222 the authority to dispose of two lots on an estate, given by two Lords of the Treasury under the provisions of sections 108 and 109 of the Municipal Corporations Act 1882, extended to the conveyance of the land and the taking from the purchaser of restrictive covenants against erecting buildings other than private dwelling houses, but although the surrounding circumstances clearly showed an intention to create a building scheme, the Treasury authority did not specifically extend to the corporation committing itself to the implementation of such scheme. The Court of Appeal held that although the circumstances were such that, had the corporation been an ordinary individual, it would have been bound by a building scheme to sell other lots subject to the same covenants, yet as the Treasury authority did not authorise such scheme, the corporation was not bound by it and was not liable for having sold two other lots for the purpose of building a church. 1.67 Notwithstanding any general statutory power to enter into restrictive covenants, however, such covenants will be ultra vires and void if they interfere with the statutory purpose for which the would-be burdened land is acquired or held by the local authority, for a local authority cannot, by contract, stultify itself in the exercise of its statutory powers.223 Subject to this limitation, a local authority can bind itself to a restrictive covenant. Thus, in Earl of Leicester v Wells-next-the-Sea UDC,224 on a sale in 1948 of 19 acres of land to the Wells Urban District Council for allotments, the purchase being authorised by the Small Holdings and Allotments Acts 1908 to 1926, the council covenanted with the vendor ‘That they will not

221 As to the power of a local authority to dispose of land in any manner it wishes, see section 123 of the 1972 Act as amended by the Local Government, Planning and Land Act 1980, s 113 and Sch 23. 222 [1894] 2 Ch 208, CA. 223 See, generally, Ayr Harbour Trustees v Oswald (1883) 8 App Cas 623; Re South Eastern Rly Co and Wiffin’s Contract [1907] 2 Ch 366 and Re Heywood’s Conveyance [1938] 2 All ER 230. 224 [1973] Ch 110 (Plowman J).

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1.68  Meaning of ‘restrictive covenant’ etc use or permit the use of the property hereby conveyed for any other purpose than small holdings and allotments under the Small Holdings and Allotments Act 1926 or any Statutes amending or replacing the same’. In the 1960s demand for allotments declined and in 1971 planning permission was granted for building 53 houses on an area comprising the greater part of the land which the council were proposing to sell on the basis of requiring the purchaser to build the houses. On a motion for an injunction to restrain the council from conveying or agreeing to convey the land otherwise than expressly subject to the covenant it was argued, inter alia, that the covenant was ultra vires the council and void; but Plowman J held that far from fettering their use of the land for the purpose for which they bought it, the covenant in fact assisted that purpose.225

(ii)  Sufficient interest in the subjected land 1.68 The period during which the burden of a restrictive covenant is capable of running with the subjective land will be commensurate with the size of the interest in the land which the covenantor had (or had power to bind) at the date of the covenant. Any attempt by the covenantor to bind the land for any longer period will be ineffective.226 This does not imply, however, that the burden only runs with the covenantor’s interest since whoever occupies the subjective land will be bound (other requirements being complied with) whether such occupier claims through or under the covenantor or not.227

(iii)  Contracting purchaser 1.69 A contracting purchaser whose contract is specifically enforceable has an equitable interest in the land corresponding to the interest contracted to be purchased.228 This being so, there can be little doubt that such a contracting purchaser has the capacity to covenant so as to bind the land to the extent of such equitable interest and further, that if and when the contract is completed, the land will (unless the terms of the covenant otherwise provide or there has, in the meantime been a change of circumstances precluding enforceability229) be bound to the extent of the legal estate purchased.230 It is, however, a question of construction whether a restrictive covenant provided for in a contract is intended to operate independently of the contents of the follow-up conveyance. 1.70 Such a question arose in Re Rutherford’s Conveyance231 where, by a contract by way of subsale dated 24 July 1925, Davies contracted to subsell to Goadby part of a larger area land at Walton-on-the-Hill, Surrey, which Davies had contracted to purchase from Rutherford. In that contract, Goadby agreed

225 As to the action which a council might now take to overcome the covenant in such a situation, see Chapter 10. 226 See John Bros Abergarw Brewery Co v Holmes [1900] 1 Ch 188. 227 Re Nisbet and Potts’ Contract [1906] 1 Ch 386. 228 See Lysaght v Edwards (1876) 2 ChD 499, Jessel MR at p 506. 229 As in Millbourn v Lyons [1914] 2 Ch 231, discussed above. 230 This seems to have been accepted by Simonds J in Re Rutherford’s Conveyance [1938] Ch 396 although in that case the covenant was not established for the reason next referred to in the text. In LCC v Allen [1914] 3 KB 642, the Court of Appeal treated a person who was in possession of land under an option as a competent covenantor. 231 [1938] Ch 396.

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The current rules in relation to transmissibility 1.72 to enter into a covenant to observe certain stipulations and restrictions (for the most part restrictive in character) set out in the schedule to the contract. The contract was completed by a conveyance dated 27 November 1925 to which Rutherford, Davies and Goadby were parties, whereby Rutherford conveyed the land to Goadby in fee simple ‘subject nevertheless to the restrictions and stipulations set out in the Schedule hereto’ – these being verbatim the same as those contained in the schedule to the contract – but there was in the conveyance no express covenant by Goadby in relation thereto and Goadby did not execute the conveyance. 1.71 Simonds J held: (i) as a matter of construction the only covenants provided for by the contract were covenants to be entered into in the conveyance;232 (ii) whilst, in equity, it was no objection to finding a covenant that the purchaser had  not executed the conveyance containing it,233 the fact that the land was expressed to be conveyed subject to the restrictions and stipulations was not sufficient to justify the implication of a covenant to observe and perform them;234 (iii) whilst, as between the grantor (Rutherford) and the grantee (Goadby), Goadby might have been under an obligation to observe and perform the restrictions and stipulations,235 such obligation was not based upon covenant and did not create an equitable burden the benefit of which ran with the land; (iv) even if it were permissible to look at the contract, this would not, on the facts, justify reading an implied covenant to observe and perform the restrictions and stipulations into the conveyance since whilst the contracting vendor was Davies, the vendor in the conveyance was Rutherford (who was not therein expressed as conveying by the direction of Davies) and it was therefore impossible to determine with whom any implied covenant was to be treated as having been made.

(iv) Covenantors having no interest in or occupation of part of the intended subjective land 1.72 Clearly, in the absence of a power of attorney, such covenantors cannot bind the land of a third party. However, notwithstanding the absence of any control over such land, the covenantors will be personally liable in damages if in fact an act prohibited by the covenant takes place at any time in the future on the land referred to.236 If a restrictive covenant relates to land to be acquired by the covenantor in the future, then subject only to any limits imposed by the perpetuity rule, there would seem to be no reason for its not taking effect as such if and when the land in question is acquired.237

232 See also on this point, Millbourn v Lyons [1914] 2 Ch 231. 233 See Formby v Barker [1903] 2 Ch 539, CA. 234 Contrast on this point the Lands Tribunal’s approach in Re Crest Homes plc’s Application (1983) 48 P&CR 309. 235 On the principle that a grantee cannot approbate and reprobate. 236 Liverpool Corpn v Tomlinson (1826) 7 Dow & Ry KB 556. 237 By analogy to the corresponding position in the case of future easements.

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2 The benefit of the restrictive covenant

CATEGORIES OF POTENTIAL BENEFICIARIES 2.1 There are three categories of people potentially able to claim the benefit of restrictive covenants, namely: (1) original covenantees or their estates (and those entitled to enforce the benefit of the covenant in the same way under statute); (2) those for whom the original covenantees hold the benefit of the covenant on trust (‘covenant beneficiaries’); (3) subsequent owners and occupiers of land benefited by the restrictive covenant who can show title to the benefit of the covenant by express assignment, by annexation or under a building scheme. If it is found that there is no person falling within any of these categories, then the restrictive covenant will have become spent and be of no further effect1 since there cannot be a legal burden without a correlative legal right and the above-mentioned categories of potential claimant are exhaustive. 2.2 If there is such a person, then before it can be said that the covenant can be enforced, it will still remain to be determined whether there is also a person who can be called upon to observe the covenant, ie who is subject to the burden and so an apt potential defendant.

1

Proceedings for a declaration to that effect could then be instituted under section 84(2) of the Law of Property Act 1925 in order formally to clear the title. As to such proceedings, see para 14.4 et seq.

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3 1: Original covenantees

THE IDENTIFICATION OF ORIGINAL COVENANTEES 3.1 Persons falling within any of the following categories can claim the benefit of restrictive covenants as original covenantees: (1) those who are parties to the instrument containing the covenant; (2) those who, by virtue of suitable language in the instrument containing the covenant, are able to invoke in their favour the operation of section 5 of the Real Property Act 1845 (in the case of pre-1926 covenants) or section 56(1) of the Law of Property Act 1925 (in the case of post-1925 covenants); (3) those who are owners1 of land comprised within a building (or development) scheme2 at the time when other land within the scheme is sold off and subjected to the scheme covenants. In relation to covenants entered into on or after 11 May 2000, the position of those within the ambit of the Contracts (Rights of Third Parties) Act 1999 also requires to be considered.

1  Parties to the instrument containing the covenant 3.2 Subject to its terms, a party to the original deed or written agreement is plainly entitled to enforce a covenant in it against another party to it, so is a competent claimant (though he can enforce it against a successor in title to the other party it will depend on whether the burden of the covenant has passed). 1

‘Owners’ in the sense of having a qualifying interest of one of the kinds considered in Chapter 1 as sufficient to make them competent covenantees. 2 In Brunner v Greenslade [1971] Ch 993, at p 999F, Megarry J pointed out that the expression used by Parker J in Elliston v Reacher [1908] 2 Ch 374 in his famous dictum on the subject of such schemes, was ‘scheme of development’. Whilst acknowledging that the expression ‘building scheme’ had acquired a considerable measure of currency, Megarry J went on to express the view that this was undeserved since ‘scheme of development’ is the genus of which a ‘building scheme’ is merely a species. However, ‘scheme of development’ itself suggests at least some form of development (in the sense of some physical change or change of layout) yet a ‘scheme’ may be applied to an existing estate or block of flats on a sale, for example, of the individual freehold reversions to sitting tenants. The literal genus would therefore appear to whittle itself down to ‘scheme’. The historical truth of the matter is that there was originally no genus other than a building scheme in the narrow and proper sense and that when the building scheme concept was extended to other forms of development or disposal, the expression ‘building scheme’ was applied to them and thereby acquired a technical meaning which transcended its original and literal meaning. (A somewhat analogous example of departure from literal accuracy occurred in the case of ‘building societies’ when their activities were extended—or curtailed). Since ‘building scheme’ is the more commonly used expression in both the reported cases and elsewhere, it is adopted in this volume.

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3.3  1: Original covenantees If the party expressly assigns the benefit to another person, however, the original party will no longer be able himself to enforce it.3

2 Original covenantees by virtue of s 5 of the Real Property Act 1845 or s 56 of the Law of Property Act 1925 3.3 Section 5 of the 1845 Act, which applies to covenants entered into after the passing of the Act and before 1926, provides as follows: ‘Under an Indenture, executed after the First day of October One thousand eight hundred and forty-five an Immediate Estate or Interest, in any Tenements or Hereditaments, and the Benefit of a Condition or Covenant, respecting any Tenements or Hereditaments, may be taken, although the Taker thereof be not named a Party to the same Indenture.’ 3.4 Section 56(1) of the 1925 Act, which applies to covenants entered into after 1925, provides as follows: ‘(1) A person may take an immediate or other interest in land or other property, or the benefit of any condition, right of entry, covenant or agreement over or respecting land or other property, although he may not be named as a party to the conveyance or other instrument.’ In Beswick v Beswick4 the speeches in the House of Lords emphasised that section 56 of the 1925 Act was essentially a consolidating section and, as such, it neither operated to extend the section in the 1845 Act to personal property nor to remove the rule of privity of contract. In the light of the speeches in that case and decisions in other cases which were referred to and left unquestioned, it is suggested that three guiding principles may be extracted. (1) Firstly, that in order to be able to claim as an original covenantee under the relevant section the claimant must show that he was in existence and identifiable at the time the covenant was entered into. With one exception, this requirement was satisfied in all the cases in which the claimant’s claim as an original covenantee under the section was successful.5 Further, in those cases where the claimant has been successful on the basis of being a successor to a person whose only claim to being an original covenantee was under the relevant section, such original covenantee satisfied this requirement.6 The exception occurred in Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board.7 In that case, Denning LJ (alone of the

3

And in relation to this, see para 3.7 below, relating to the decision in Re Hutchinson’s Application [2009] UKUT 182 (LC). 4 [1968] AC 58. 5 See Drive Yourself Hire Co (London) Ltd v Strutt [1954] 1 QB 250, CA (though see below in relation to the case itself); Stromdale and Ball Ltd v Burden [1952] Ch 223 (Danckwerts J); Chelsea and Walham Green Building Society v Armstrong [1951] Ch 853, per Vaisey J at p 859 (but decided on other grounds); Dyson v Forster [1909] AC 98, HL. 6 See Dyson v Forster, above; Re Ecclesiastical Comrs for England’s Conveyance [1936] Ch 430. 7 [1949] 2 KB 500.

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The identification of original covenantees 3.4 three Lords Justices) considered that the second claimant, which was not identifiable as an original covenantee at the date of the covenant, could enforce the covenant under section 56. However, this seems not to be consistent with the wording of section 56(1), which appears to presuppose that although not in fact a party, he could have been named as a party.8 In Beswick v Beswick9 both Lord Pearce and Lord Upjohn re-affirmed the law on the present point as it stood prior to Smith’s Case, although the actual decision was based on section 56 having no application to personalty. (2) Secondly, whether a person who satisfies the above requirement of being ascertainable at the date of the covenant can bring himself within the scope of the relevant section is a question of construction depending on whether the words of covenant show an intention to grant the benefit to such person. In Re Ecclesiastical Comrs for England’s Conveyance,10 a covenant ‘with the Ecclesiastical Commissioners and their successors and also as a separate covenant with their assigns owners for the time being of the lands adjoining or adjacent to the said land hereby conveyed’ was held to show an intention to grant the benefit to assigns who, at the date of the covenant, had already become assigns in respect of adjacent or adjoining land of the Ecclesiastical Commissioners. On the other hand, in White v Bijou Mansions Ltd,11 a covenant with the vendors ‘their heirs and assigns’ was held to show an intention to grant the benefit only to assigns who became such after the date of the covenant with the result that earlier assigns of the vendors (in the sense of persons who had already purchased neighbouring land from the vendors) were not shown to be intended to benefit as covenantees and therefore were not capable of being original covenantees by virtue of the section. Accordingly, there was nothing to which the claimant, who was a successor in title of one of such earlier purchasers, could claim to have become entitled through such purchaser. Simply that a person would benefit from the covenant is not enough for him to be entitled to enforce it. As was said by Simonds J in White v Bijou Mansions Ltd:12 ‘under section 56 … only that person can call it in aid who, although not named as a party to the conveyance or other instrument, is yet a person to whom that conveyance or other instrument purports to grant some thing or with which some agreement or covenant is purported to be made.’ [Emphasis added] That this is so was emphasised by Neuberger J in Amsprop Trading Ltd v Harris Distribution Ltd13 (at 1029H–1030C and 1032D) who referred to the fact that Simonds J’s view in White v Bijou Mansions was cited with approval by Lord Upjohn in Beswick v Beswick.

8 9 10 11 12 13

See the concluding words of the subsection: ‘although he may not be named as a party’. [1967] 2 All ER 1197 at 1216B–D and 1224A–F respectively. [1936] Ch 430 (Luxmoore J). [1937] Ch 610. Ibid, at p 625. [1997] 1 WLR 1025.

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3.4  1: Original covenantees He concluded that, as summarised in the then current 5th edition of Megarry and Wade, The Law of Real Property: ‘The true aim of section 56 seems to be not to allow the third party to sue on a contract merely because it is made for his benefit; the contract must purport to be made with him. Just as, under the first part of the section, a person cannot benefit by conveyance unless it purports to be made to him (as grantee), so he cannot benefit by a covenant which does not purport to be made with him (as covenantee).’ He held that ‘where the identity of the covenantee is clear and unambiguous,  section 56 does not operate to confer the benefit of the covenant on a party who is not within the ambit of the expressly identified covenantee’, and dismissed the claim as a result. The position as set out by Neuberger J, by reference to White v Bijou Mansions, is also in line with earlier cases such as Abbey Homesteads Developments Ltd v Northamptonshire County Council,14 though not cited in Amsprop, where the Lands Tribunal held that a ‘section 52’ agreement entered into with a district council relating to land being reserved for school purposes could not be enforced by the county council (which was the education authority) under the section since the agreement did not purport to make a grant of the benefit of the covenant to the county council (or purport to be made with it). Neuberger J in Amsprop identified two decisions which seemed inconsistent with the conclusion, namely Drive Yourself Car Hire Company (London) Ltd v Strutt15 in the Court of Appeal, and Re Shaw’s Application16 in the Lands Tribunal. However, he held that the judgment of Denning LJ in the first of these cases could not be regarded as authority in light of observations made by the House of Lords in Beswick v Beswick, and that the decision in Re Shaw’s Application was based on reading observations of Sir Wilfred Greene MR in White v Bijou Mansions out of context, whereas on a true reading of them they were in line with the observations of Simonds J in that case at first instance.17 (3) Thirdly, once it is established that a person is within the purview of the covenant then, although not a party, he is treated fully as an original covenantee. This is clear from the decision of Luxmoore J in Re Ecclesiastical Comrs for England’s Conveyance.18 In that case: ‘In a conveyance made in 1887 by the Ecclesiastical Commissioners of a freehold house known as ‘W H House’, the purchaser covenanted ‘with the Ecclesiastical Commissioners and their successors and also as a separate covenant with their assigns owners for the time being of the lands adjoining or adjacent to the said land hereby conveyed’ to observe and perform certain restrictions. Prior to the conveyance, the Ecclesiastical Commissioners had sold and conveyed various other houses and plots of land adjoining or near to W H House. On an application by a successor in title of W H House under section 84(2) of the Law of Property Act 1925 for a declaration under that subsection, 14 15 16 17 18

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(1984) 49 Ρ&CR 263 (VG Wellings QC) (reversed on appeal (1986) 53 Ρ&CR 1 but not on this point). [1954] 1 QB 250. (1994) 68 P&CR 591. See p 1031H–1032B. [1936] Ch 430.

The identification of original covenantees 3.6 certain of the respondents who were successors in title of some of the houses and plots which had been sold before the date of the 1887 conveyance, claimed the right to enforce the covenants as successors in title of the persons who owned those houses and plots at the date of the 1887 conveyance. Luxmoore J held that although those owners were not parties to the 1887 conveyance, they were original covenantees by virtue of section 5 of the 1845 Act with the result that the respondents could claim the benefit of the covenants in the same way as any other successor in title from an original covenantee.’

3 Persons who are owners19 of land comprised within a building scheme at the time when other land within the scheme is sold off and subjected to the scheme of covenants 3.5 Where a building scheme exists, special rules apply which greatly facilitate both the creation and the transmissibility of restrictive covenants amongst owners for the time being of land which falls within the scheme. The particular issue being considered at this point is related only to the creation of restrictive covenants and the persons who can claim as, or as successors to, original covenantees thereunder. Since building schemes are relevant not only to the present issue of identifying original covenantees but also to at least six other issues concerning the enforceability of restrictive covenants,20 the nature of such schemes and the question of when they exist is dealt with as a self-contained whole in Chapter 8. Accordingly, reference should be made to that chapter for the purpose of considering whether, in any particular case, a building scheme exists. 3.6 Assuming that a building scheme exists, the general effect is that although the covenants on the part of each purchaser are expressed to be entered into only with their vendor, such covenants are nevertheless deemed also to be made with (and so as to be enforceable directly by) the owners at that time (and their successors) of other parts of the scheme land. Thus, if A is the owner of an estate which he divides up into 50 plots with a view (which he makes known) to selling them subject to a consistent pattern of restrictive covenants, and he sells plot 1 first then, on the sale of the next plot, the covenants entered into by such later purchaser, although expressed to be made only with A, will also be deemed to be made with and for the benefit of the (then) owner of plot 1 (and his successors). Similarly, on the sale of the next plot, the purchaser will be deemed to be covenanting with the (then) owners of each of the plots previously sold (and their successors) and so on until the sale of the last plot when the last purchaser will be deemed to be covenanting with each and every one of the (then) owners of the other 49 plots.21 This assumes that all the requirements for the existence of a building scheme are extant on the occasion of each and

19

‘Owners’ in the sense of having a qualifying interest of one of the kinds considered in Chapter 1 as sufficient to make them competent covenantees: see above, para 1.51. 20 These issues are listed in Chapter 8. 21 In addition, of course, the later purchasers get the benefit of the earlier purchasers’ covenants as successors to the vendor so that reciprocity is achieved: this aspect (transmissibility) is dealt with in Chapter 8.

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3.7  1: Original covenantees every sale. If this is not the case in respect of any given sale, then the covenants entered into by the purchaser in question will not have any extended operation beyond their actual terms.22 The question of whether the extended operation of covenants which do fall within the scope of a building scheme is founded upon the concept of implied covenant or upon the concept of a ‘wider equity’ is considered in Chapter 8.

Effect of the loss of the original covenantee’s rights of enforcement against successors in title of the burdened land and remedies of an original covenantee 3.7 An original covenantee who has disposed of the benefited land to a person who does not have the ability to enforce the covenant (under the rules to be considered in the following chapters) will not by acquiring that land back revive his ability to enforce it against successors in title of the burdened land: see Re Hutchinson’s Application.23 3.8 Further, where the covenant is taken for the benefit of land belonging to the covenantee, once he has parted with that land, even if the burdened land is still held by the original covenantor, and privity of contract between them remains, any breach would only be likely to result in an award to the original covenantee of nominal damages as the real loss will be to whoever then has the land – unless the original covenantee could show loss by some other route, for example, because of liability of some sort under covenants entered into by him with the subsequent purchasers (see Spencer v Bailey24).

THE CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 3.9 By the Contracts (Rights of Third Parties) Act 1999, it is provided that in relation to contracts entered into six months after the Act came into effect (on 11 November 1999): ‘a person who is not party to a contract (‘third party’) may in his own right enforce a term of the contract if: (a) the contract expressly provides that he may, or (b) subject to subsection (2), the term purports to confer a benefit on him.’ As a covenant amounts to a contractual stipulation, there is on the face of it no reason this should not cover enforcement by successors in title of a land covenant by which a benefit has been conferred on them as well as by the original covenantee. Though exceptions are specified by the Act, land covenants are not amongst them. Accordingly, for covenants entered into on or after 11 May 2000, the purported conferring of a benefit by the covenant on a person will be sufficient to enable him to enforce it. 3.10 This would appear to be similar in effect to the provisions of section 56(1) of the Law of Property Act 1925, considered above (though not confined, of course, as section 56 is, to land and property matters). 22 23 24

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See, further, Chapter 8. [2009] UKUT 182 (LC) at para 11. (1893) 69 LT 179.

The Contracts (Rights of Third Parties) Act 1999 3.12 It appears insufficient simply for a person to benefit from the contractual stipulation: the contract must purport to confer that benefit on him. This was confirmed in relation to the 1999 Act by Clarke J in Dolphin Maritime and Aviation Services Ltd v Sveriges Angfartygs Forening:25 ‘A contract does not purport to confer a benefit on a third party simply because the position of that third party will be improved if the contract is performed. The reference in the section to the term purporting to “confer” a benefit seems to me to connote that the language used by the parties shows that one of the purposes of their bargain (rather than one of its incidental effects if performed) was to benefit the third party.’ Further, section 1(3) of the 1999 Act requires the third party to be expressly identified in the contract by name, as a member of a class or as answering a particular description. This again precludes someone coming along and saying that they should be entitled to enforce the contract simply because it happens to benefit them. 3.11 There is one key difference from section 56 of the Law of Property Act 1925, however. That is that section 1(3) expressly provides that there is no need for the third party to be in existence at the time the covenant is entered into. For the future, this could clearly be of considerable importance. Successors in title for whose benefit (as a class) a covenant is expressed to be taken, as well as that of the covenantee himself, could potentially rely on the 1999 Act to enforce the covenant, as they need not be in existence or identifiable other than as a class at the time of the covenant. The Act applies to contracts generally and there is no requirement the covenant must be taken for the benefit of any particular land, or other technical land law rules to be fulfilled. However, as the Act is relatively recent, and does not affect pre-existing covenants, there is as yet no reported case under it relating to land covenants.

Remedies under the Contracts (Rights of Third Parties) Act 1999 3.12 Where a volunteer takes benefit under the Contracts (Rights of Third Parties) Act 1999, there is some doubt as to whether the remedies available would include an order for specific performance on the third party’s application alone. This is because whilst section 1(5) states that ‘there shall be available to the third party any remedy that would have been available to him in an action for breach of contract if he had been a party to the contract (and the rules relating to damages, injunctions, specific performance and other relief shall apply accordingly)’, where the third party has provided no consideration specific performance will generally not be available to him because equity will not assist a volunteer (even where the promise was made by deed to which the person was party).26

25 [2009] EWHC 716, at para 74. 26 See Cannon v Hartley [1949] Ch 213.

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3.12  1: Original covenantees However, where consideration has been provided by the contracting promisee, it seems unlikely that this was Parliament’s intention, the general intention being to give the third party the ability to fully enforce the contract like the promisee27 and effect may be given by the courts to this intention if and when the matter comes before them notwithstanding the technical wording used. Even if not, a remedy in damages would be available to the third party.28

27 See eg the comments of Lord Irvine of Lairg LC in introducing the Bill for second reading: ‘… the noble and learned Lord, Lord Steyn, said that, “the case for recognising a contract for the benefit of a third party is simple and straightforward. The autonomy of the will of the parties should be respected. The law of contract should give effect to the reasonable expectations of contracting parties … there is no doctrinal, logical or policy reason why the law should deny effectiveness to a contract for the benefit of a third party where that is the expressed intention of the parties”. The Bill will give effect to that simple and straightforward principle’. 28 See again Cannon v Hartley [1949] Ch 213, referred to above.

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4 2: Covenant beneficiaries

ORIGIN OF TRUSTS OF THE BENEFIT OF RESTRICTIVE COVENANTS 4.1 In 1839 in Schreiber v Creed,1 Shadwell V-C described as ‘perfectly familiar to the mind of every lawyer’, the device of covenantees with whom restrictive covenants had been entered into, holding the benefit of the covenants as trustees for all the owners from time to time of plots on an estate.2 This was but one example of the principle that a contracting party could hold the benefit of a contract for a third party under a trust either express or implied.3

RELATIONSHIP BETWEEN TRUSTS OF COVENANTS AND BUILDING SCHEMES 4.2 During the formative period of building schemes,4 the device of a trust was an alternative to, and sometimes a correlative of, the device of the deed of mutual covenant, as a means of imposing a ‘local law’ for the regulation of the use of land comprised within a defined estate. In Roper v Williams5 Lord Eldon held that a vendor who took a covenant in the like terms from all his purchasers was stipulating not only for his own benefit but for that of all the tenants in his neighbourhood.6 In Eastwood v Lever,7 there was an express declaration of trust of the benefit of a covenant, whilst in Peek v Matthews,8 an implied trust of the benefit of the covenants was found. 4.3 As in the case of building schemes, so also with trusts of restrictive covenants; however, it appears that the era of carefully documenting the intention 1 2

(1839) 10 Sim 9, at p 33. Referred to by Simonds J in Lawrence v South County Freeholds Ltd [1939] Ch 656, at p 675. No question of perpetuity would arise provided that the benefit of the covenants was held absolutely for the current owners and was passed on by them on change of ownership to the new owners. 3 See Robertson v Wait (1853) 8 Exch 299, applied by the House of Lords in Les Affréteurs Réunis SA v Leopold Walford (London) Ltd [1919] AC 801. 4 See Chapter 8. 5 (1822) Turn & R 18. 6 Referred to by Sir W Page Wood V-C in Peek v Matthews (1867) LR 3 Eq 515 at 518 and by Tomlin J in Kelly v Barrett [1924] 2 Ch 379 at 389, who said: ‘Roper v Williams must have been a case of a building scheme’. 7 (1863) 4 De GJ & Sm 114. 8 Footnote 6.

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4.4  2: Covenant beneficiaries to create a building scheme or a trust of restrictive covenants was short-lived and that the question whether there was such a trust was not infrequently a matter which, as in the case of building schemes, fell to be resolved by whether an intention to create a trust could be inferred from the circumstances. Thus, in Nicoll v Fenninff:9 Trustees who were disposing piecemeal of a field, in 1863 sold one portion of the field to Collins (the predecessor in title of the plaintiff) who wished to erect a public house thereon and the trustees covenanted with Collins, his heirs and assigns, that they, their heirs and assigns would not thereafter sell or convey any portion or portions of the field without requiring the purchaser thereof to enter into a covenant with the trustees not to erect thereon or use or permit to be used any building to be erected thereon as a tavern, public house or beershop. Collins subsequently built a public house on the land. All subsequent conveyances by the trustees of other parts of the field included a covenant by the purchaser with the trustees to this effect, including a conveyance made in 1870 of the land of which the defendant was a lessee, to a predecessor in title of the lessee’s landlord. The defendant proposed to use his shop as an off-licence, for the sale of beer to be consumed off the premises. The plaintiff sought an injunction to restrain him from committing a breach of (inter alia) the covenant contained in the 1870 conveyance. 4.4 Before the case came on for hearing before Bacon V-C, an interlocutory motion for an injunction was heard by Sir George Jessel MR who intimated that the 1870 covenant did not run with the land and also that for the action to succeed at the hearing it would be necessary to join the then trustees (who had by then disposed of all parts of the field) as co-plaintiff’s and this was done. The essentials of Bacon V-C’s judgment appear to be as follows: (a) a finding of fact that the 1863 covenant was intended to be for the benefit of all future owners of portions of the rest of the field, (b) ‘that it was a plain principle of the Court of Equity that in matters of contract the intention of the parties was to be regarded where it could be carried into effect’, (c) that the decision in Renals v Cowlishaw10 ‘recognised in the most distinct terms that the intention of the parties to such contracts [relating to restrictive covenants] is to prevail, and that a Court of Equity will enforce that intention’ and (d) that (without considering further how the plaintiff obtained the benefit) the plaintiff could enforce the 1870 covenant ‘as if the covenant had been made by the Defendant’.11

9 (1881) 19 ChD 258 (Bacon V-C). 10 (1879) 11 ChD 866, CA, affirming Wills J (1878) 9 ChD 125, whose judgment is treated as a classic in the context of building schemes. 11 The conclusion so arrived at (unless supported by reference to a trust of the benefit of the covenant for Collins) would appear to represent a considerable extension of the principle of a building scheme as enunciated in Renals v Cowlishaw. In the first place, at the time of the sale to Collins, it does not appear that there was any general scheme of covenants intended to be applied on all subsequent sales. Secondly, according to the facts stated in the report, at p 258, Collins (the first purchaser) was not, in the conveyance to him, required to enter into any covenants (although according to the judgment at p 265, Collins entered into a building lease with the trustees). There would therefore seem to have been a distinct lack of mutuality as between Collins and the other purchasers even though (as found by Bacon V-C) there might have been mutuality amongst the subsequent purchasers inter se: cf Nalder and Collyer’s Brewery Co Ltd v Harman (1900) 83 LT 257. If the decision was an extension of the building scheme principle, it is unlikely to be followed in view of the comment of Lord Macnaghten in Spicer v Martin (1888) 14 App Cas 12, at p 24 that ‘I should be disposed to hesitate if I were invited to extend the principles recognised in Renals v Cowlishaw’.

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Who should be party to the action to enforce the covenants? 4.7 In apparent deference to the suggestion of Sir George Jessel MR resulting in the trustees being joined as parties, however, Bacon V-C added:12 ‘But whoever else might have sued at law, in enforcing the contract he would be at best but a trustee of the covenant for the benefit of the Plaintiff, who had a right to the benefit of it.’ 4.5 Whilst, as has been seen, trusteeship of covenants and a building scheme may co-exist in relation to the same covenants, more recent authority suggests that specific arrangements which would be unnecessary if a building scheme existed may militate against the inference of a scheme. Thus, in White v Bijou Mansions Ltd13 one of the factors leading to the Court of Appeal to conclude that there was an absence of intention to create a building scheme was that in the conveyance to the plaintiff’s predecessor in title (Fellows), the vendors covenanted that they would procure from future lessees and purchasers a covenant to observe the same six stipulations as those contained in that conveyance (a provision entirely consistent with a building scheme) and that they would, upon request, enforce them. Sir Wilfred Greene MR took the latter provision ‘to be a very clear indication that it was not the intention of anybody that Fellows should be entitled to enforce these covenants direct’.14 4.6 Again, in Page v King’s Parade Properties Ltd,15 Goff J regarded an express assignment of the benefit of covenants made some 18 years after they had been entered into, as an indication which was ‘completely inconsistent with a building scheme’.16 Similarly, an express trust of the benefit of covenants for the plot owners would prima facie exclude a building scheme which might otherwise be inferred from the circumstances.

WHO, AS BETWEEN THE TRUSTEE AND THE BENEFICIARY, SHOULD BE PARTY TO THE ACTION TO ENFORCE THE COVENANTS? 4.7 It is necessary for the claimant to show that enforcement is necessary for the protection of some ‘interest’ of the claimant in the benefited land. The question therefore arises whether a trustee who no longer holds any (or any sufficient) legal or equitable interest in the benefited land can nevertheless enforce the covenants in his name for the benefit of others who do hold such an interest. This issue appears never to have been directly litigated, although it was raised in  argument in Nicoll v Fenning.17 It is by no means clear that such a bare trustee could enforce the covenants since the trustee as such suffers no damage from the breach either personally or to any property held on trust.

12 13 14 15 16 17

At p 267. [1938] Ch 351. Ibid, at p 363. (1967) 20 P&CR 710. Ibid, at p 718. 1881) 19 ChD 258, at pp 262 and 263. See, also, Eastwood v Lever (1863) 4 De GJ & Sm 114.

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4.7  2: Covenant beneficiaries It is, however, clear from Nicoll v Fenning18 that the beneficiary could, even without joining the trustee as a party, rely on his equitable interest in the covenant under the trust as a sufficient title to enforce the covenant and, of course, such beneficiary has the required interest (in his own right) in the benefited land to support that title.19

18 (1881) 19 ChD 258. 19 See also, as to the passing of the benefit by operation of law, Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd [1952] Ch 286.

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5 3: Subsequent owners and occupiers of land benefited by the restrictive covenant as competent claimants: overview

GENERAL RULE 5.1 Subsequent owners and occupiers may be competent claimants against a successor in title of the covenantor (ie new owner of the burdened land) if the covenant satisfies the six basic requirements for transmissibility referred to in Chapter 1 (summarised in para 1.9 above), namely that: (1) the covenant must be negative in substance; (2) the covenant must relate to the user of land; (3) the covenant must have been entered into for the benefit of (ie touch and concern) land ‘belonging’ to the covenantee; (4) the covenant must as a matter of fact benefit land in which the claimant has a sufficient interest at the time of enforcement; (5) the words of covenant must be such as to show that the covenant was not intended to be personal to the original covenantee or to be confined to a category of persons to whom the claimant does not belong; (6) the covenant must have been entered into by a competent covenantor having a sufficient interest in the burdened (subjective) land, and they can show entitlement to the benefit of the restrictive covenant by reason of: (a) annexation; (b) express assignment; or (c) a building scheme. The degree to which the covenant may run for the benefit of successors in title varies to an extent under each of these methods (and they may overlap – because one has been established does not mean another cannot be). Each of them will be considered in turn in the following chapters. 5.2 There is no fourth method derived from the cases or equity: Re Pinewood Estate, Farnborough.1 In Kumar v Dunning2 Sir Nicholas Browne-Wilkinson V-C 1 2

[1958] Ch 280, at pp 287–288. [1989] QB 193, at p 198.

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5.3  Subsequent owners & occupiers of land benefited etc reiterated the position as being that: ‘It is established that in the absence of annexation to the land or the existence of a building scheme, the benefit of a restrictive covenant cannot pass except by way of express assignment’.

Statutory exception 5.3 However, a fourth method appears now to have arisen in relation to covenants entered into on or after 11 May 2000, by reason of statute in the form of section 1 of the Contracts (Rights of Third Parties) Act 1999.3 From that date onwards the Act provides that any person for whose benefit a contract (and therefore a covenant) purports to be made is able to enforce it. By section 1(3) of the Act, such persons can be identified simply as a member of a class and need not be in existence at the time of the covenant. They could therefore potentially include the covenantee’s successors in title as a class. The Act applies to contracts generally and none of requirements listed in (a) to (c) above in relation to land covenants, applicable aside from this, would need to be fulfilled in relation to this. This only relates to covenants entered into on or after 11 May 2000 and there have not yet been any cases under the Act relating to land covenants.

3

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Considered at para 3.9 et seq above.

6 Subsequent owners and occupiers of benefited land: (a) where there is annexation

THE EFFECT OF ANNEXATION 6.1 Once it is established, in accordance with the requirements considered below, that the benefit of a restrictive covenant has been annexed to identified land then, in general, that benefit passes automatically with the land into the hands of any person within the scope of the benefit of the covenant who thereafter acquires a relevant interest in or right of occupation to the land. Thus, so long as the requirements below are fulfilled, if the covenant is made with the freehold owner of Greenacre ‘and his successors in title of Greenacre’, then the benefit will automatically pass on any subsequent conveyance or transfer of the freehold.1 Prima facie, however, a lessee or other owner of a derivative interest in Greenacre would not be able to claim the benefit by virtue of such annexation since such persons would not ordinarily (and apart from section 7 of the Law of Property Act 1925 considered below) fall within the scope of the expression ‘successors in title’ of the covenantee. But if the covenant were made with the freehold owner of Greenacre ‘and those deriving title under him for the benefit of Greenacre’, then the benefit would also automatically pass on a subsequent grant of a lease of Greenacre.2 6.2 Further, in the case of post-1925 covenants to which the provisions of section 78 of the Law of Property Act 1925 apply,3 the persons within the scope of the covenant are expressly extended to include mere occupiers of Greenacre whether or not they claim through the original covenantee with the result (it would seem4) that any such occupier would automatically get the benefit of the covenant. The automatic passing under annexation will take place whether or not on the occasion of the subsequent disposition of the benefited land there is any reference 1 2

3 4

Rogers v Hosegood [1900] 2 Ch 388, CA; Child v Douglas (1854) Kay 560. Taite v Gosling (1879) 11 ChD 273; Westhoughton UDC v Wigan Coal and Iron Co [1919] 1 Ch 159. But it will not pass with the grant of a rentcharge even though beneficial to the rentcharge: Grant v Edmondson [1931] 1 Ch 1, at p 25; Milnes v Branch (1816) 5 M & S 411. The covenants in the two last-mentioned cases were positive covenants but on this point, there is no difference between positive and restrictive covenants. As to which, see below, para 6.27. Below, para 6.28 et seq.

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6.3  Subsequent owners & occupiers of benefited land: (a) annexation to the covenant and whether or not the person taking under the disposition knew of the existence of the covenant.5 6.3 The effect of annexation is accordingly to make the covenant ‘run with the land’ in the hands of persons within the scope of the words of covenant. The judicial decisions go no further although in Reid v Bickerstaff6 CozensHardy MR expressed the view that an annexed covenant was ‘in the nature of an easement attached to his property as the dominant tenement.’ But these remarks were made obiter in the context of the benefit passing to a subsequent purchaser whether he knew of its existence or not, and it is thought that they were not intended to enlarge the persons who must (regardless of the words of covenant) be treated as falling within the scope of the benefit of the covenant. Furthermore, subsequent cases7 have clearly demonstrated, in the context of the fragmentation of the benefited land, that the analogy of annexed covenants to easements is by no means complete.8 It therefore seems that whilst the benefit of an annexed restrictive covenant is capable of ‘running with’ the benefited land in the hands of any subsequent owner or occupier claiming through or under the covenantee, the actual limits (if any) on the categories of persons in whose favour any particular annexed covenant will run will depend upon the intention of the parties as determined by the true construction of the words of covenant or, if those words are confined to the covenantee simpliciter, the true construction of the covenant in the context of the contents of the instrument which contains the covenant and in the light of the surrounding circumstances.9 6.4 The above statement as to the effect of annexation must, however, be qualified in two respects, namely: (1) it will not apply if, on the occasion of any particular disposition, annexation is effectively negatived;10 and (2) the benefit of annexation may be lost on the subsequent fragmentation into different hands of the benefited land.11 Before considering these two matters, it is proposed to deal with the requirements for bringing about annexation.

THE REQUIREMENTS FOR ANNEXATION 6.5 In view of the direct effect and the further implications of the decision of the Court of Appeal in Federated Homes Ltd v Mill Lodge Properties Ltd12

5

6 7 8 9

10 11 12

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Lawrence v South County Freeholds Ltd [1939] Ch 656, per Simonds J at p 680: ‘such a benefit may pass with the land to which it has been annexed, even though the purchaser is unaware of it, a hidden treasure may be discovered in the hour of need’; Rogers v Hosegood [1900] 2 Ch 388, at pp 394, 408; Reid v Bickerstaff [1909] 2 Ch 305, at p 320. [1909] 2 Ch 305, at p 320. Considered below at para 6.45 et seq. As to the similarities and differences between restrictive covenants and easements generally, see also paras 1.7–1.8 above. It would seem, however, that such ‘running’ will (unlike the position in the case of the benefit of an easement) usually fall short of extending to a person who has acquired or is in the course of acquiring a title by adverse possession under the Limitation Acts unless, indeed, the actual words of covenant are wide enough to include such a person. Below, paras 6.90–6.92. Below, para 6.45 et seq. [1980] 1 WLR 594-considered in detail below, para 6.31 et seq.

The requirements for annexation 6.7 in relation to the effect of section 78 of the Law of Property Act 1925 on annexation, it is necessary to consider first the requirements for annexation in the case of covenants entered into before 1926 and then to consider the extent to which those requirements have been modified in the case of covenants entered into after 1925 (to which the provisions of section 78 apply).

Pre-1926 restrictive covenants 6.6 In order to establish that the benefit of a restrictive covenant entered into before 1926 is annexed to land of the covenantee so as to ‘run with the land’ in the hands of subsequent owners or occupiers who are within the scope of the words of covenant, it must be shown that on the true construction of the instrument creating the restrictive covenant, an intention is manifested that the covenant should enure for the benefit of particular land of the covenantee.13 This involves two elements, namely, that (1) the benefited land must be able to be identified from the words of the instrument creating the covenant, and be ‘easily ascertainable’; and (2) there are words in that instrument which show that the covenant is intended to benefit that land. Unless both these requirements are satisfied, there can be no annexation and it is therefore necessary to consider each requirement in turn.

(1) The benefited land must be able to be identified from the words of the instrument creating the covenant and must be easily ascertainable 6.7 As to the need for identification of the benefited land, in Re Union of London and Smith’s Bank Ltd’s Conveyance,14 Romer LJ, delivering the judgment of the Court of Appeal, said: ‘… apart from what are usually referred to as building scheme cases (and this is not a case of that sort), a purchaser from the original covenantee of land retained by him when he executed the conveyance containing the covenant will be entitled to the benefit of the covenant if the conveyance [containing the covenant] shows that the covenant was intended to enure for the benefit of that particular land.’ In Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd,15 Upjohn J, after quoting the above passage, said (more specifically to the present point): ‘In this difficult branch of the law one thing, in my judgment, is clear, viz, that in order to annex the benefit of a restrictive covenant to land so that it runs with the land without express assignment on a subsequent assignment of the

13 14 15

As to whether a covenant not originally annexed, can be subsequently annexed (otherwise than by novation), see below, para 6.94 et seq. [1933] Ch 611, at p 628; cited and applied by Upjohn J in Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd [1952] Ch 286. [1952] Ch 286, at p 289.

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6.8  Subsequent owners & occupiers of benefited land: (a) annexation land, the land for the benefit of which it is taken must be clearly identified in the conveyance containing the covenant.’ 6.8 It is not, however, necessary for such identification to be either by way of specific description or by reference to a plan. Thus, in Rogers v Hosegood:16 In 1869, the owners of land in Palace Gate, Kensington, sold and conveyed (on separate occasions) two plots to the predecessor in title of the defendant. The conveyances contained covenants by such predecessor with the vendors ‘their heirs and assigns and others claiming under them to all or any of their lands adjoining or near to the said premises’ not (inter alia) to erect more than one dwellinghouse on the plot. In 1872, the owners sold and conveyed another plot to the predecessor in title of the claimants. The conveyance to such predecessor contained no reference to the covenant in the 1869 conveyances and he was unware of their existence. The defendant was now proposing to build a block of residential flats on the plots sold in 1869 and on the question whether the claimants were entitled to enforce the restrictive covenant, the main issue was whether the benefit of the covenant had been annexed to the plot now vested in them. 6.9 It was argued that the words ‘any of their lands adjoining or near to the said premises’ (of which the claimants’ plot formed part) were too vague to identify land to which the covenant could be annexed but it was held by Farwell J and the Court of Appeal that this description was sufficiently certain and that the claimants were entitled to an injunction to restrain the defendant from building the block of flats.17 Similarly, a covenant expressed to be for the benefit of ‘the vendor’s adjoining and neighbouring land’,18 or ‘the adjoining or neighbouring land part of or lately part of the Selwyn estate in the parish of Richmond’,19 or ‘land … upon part of which Nobold House aforesaid is built and forms the present residence of the vendor’,20 have each been held to be sufficiently certain to enable the court to identify the benefited land, subject to the necessary extrinsic evidence showing the existence of land which falls within the relevant description. 6.10 However, the Court of Appeal in Marquess of Zetland v Driver stated21 that ‘the land which is intended to be benefited must be defined so as to be easily ascertainable’. This is a requirement which still applies post-1925 (see below). It will therefore be considered in detail below (at paras 6.35–6.40).

16 [1900] 2 Ch 388, CA. 17 See, also, McLean v McKay (1873) LR 5 PC 327, at p 335; Re Ecclesiastical Comrs for England’s Conveyance [1936] Ch 430, at p 440. 18 As in Russell v Archdale [1964] Ch 38 (Buckley J). 19 As in Re Selwyn’s Conveyance [1967] Ch 674 (Goff J). Only that part of the Selwyn estate which answered the description of being ‘neighbouring’ was held, as a matter of construction, to be within the terms of the covenant. The word ‘lately’ was construed as equivalent to ‘formerly’ and thus did not give rise to any question of whether only recently severed parts of the estate fell within the description. 20 Shropshire County Council v Edwards (1983) 46 P&CR 270, at p 275. 21 [1939] Ch 1, at p 8.

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The requirements for annexation 6.12 Where the covenant is expressed to be for the benefit of any adjoining land which the covenantee may acquire in the future,22 there would clearly be no annexation since no benefited land of the covenantee at the time of the conveyance would be identified.23

(2) The intention to benefit the identified land 6.11 If the benefited land is identified in the instrument creating the covenant, then the remaining question is whether that instrument shows, as a matter of construction, an intention for the covenant to benefit that land. The identification of the land without this second element will not bring about annexation.24 No particular formula or ‘magic words’25 are required provided that upon the true construction of the instrument containing the covenant there are words sufficient to link the benefit of the covenant to such land. 6.12 Two of the more usual methods for bringing about such link are by words showing an intention to benefit the ascertained land itself, or by words showing an intention to benefit classes of persons who will become, but are not now, interested in that land.26 In Shropshire County Council v Edwards,27 HH Judge Rubin, sitting as a High Court judge, expressed the position thus: ‘But it is not necessary, though highly desirable, that express words should be used to annex the benefit of the covenant to the land with which it is to run. If, on the construction of the instrument creating the restrictive covenant, [emphasis added] both the land which is intended to be benefited and an intention to benefit that land, as distinct from benefiting the covenantee personally, can be clearly established, then the benefit of the covenant will be annexed to that land and run with it notwithstanding the absence of express words of annexation.’ In that case, the vendor’s benefited land, having been held to have been sufficiently clearly identified in the conveyance containing the restrictive covenants, the judge went on to hold that looking at the contents of the conveyance as a whole, including a provision that ‘the covenants on the part of the vendor and the purchaser respectively should run with the lands of the vendor and the corporation respectively’, it was clear that the covenants were intended to be annexed to the vendor’s land.28

22 As to the material date for determining whether the covenantee owned land capable of benefiting from the covenant, see Millbourn v Lyons [1914] 2 Ch 231, CA. 23 See the analogous problem which arose in relation to the creation of easements in London and Blenheim Estates Ltd v Ladbroke Retail Parks Ltd [1994] 1 WLR 31, CA. In Keates v Lyon (1869) 4 Ch App 218, Selwyn LJ pointed out that a factor indicating that a covenant was intended to be personal to the covenantee would be if it was entered into for the benefit of other land which the covanantee did not own at the time but expected afterwards to acquire by inheritance or purchase. This observation was referred to by Buckley LJ in Reid v Bickerstaff [1909] 2 Ch 305 at 226. See, also, the easement case of Voice v Bell (1993) 68 P&CR 441, CA. 24 J Sainsbury plc v Enfield London Borough Council [1989] 1 WLR 590 (Morritt J). 25 See Shropshire County Council v Edwards (1982) 46 P&CR 270 at p 275. 26 See Drake v Gray [1936] Ch 451, CA, especially per Greene LJ at p 466. 27 (1982) 46 P&CR 270, at pp 277–278. 28 Compare Baxter v Fouroaks Properties Ltd [1965] Ch 816, below, para 8.52.

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6.13  Subsequent owners & occupiers of benefited land: (a) annexation 6.13

As Blackburne J put it in Re MCA East Ltd:29

‘… there must be an intention that the covenant should benefit identifiable land of the covenantee. This last element must be apparent from a true construction of the instrument containing the restriction. It may be shown expressly by the words of the covenant itself, or other words used in the instrument, or it may be implied, if, on a true construction of the instrument as a whole when viewed in the light of the surrounding circumstances as they existed at the time the instrument as entered into, such an intention is to be gathered from the instrument …’ In Drake v Gray,30 Green LJ described at page 466 how express annexation is ordinarily achieved. He said this: ‘There are two familiar methods of indicating in a covenant of this kind the land in respect of which the benefit is to enure. One is to describe the character in which the covenantee receives the covenant … a covenant with so and so, owners or owner for the time being of whatever the land may be. Another method is to state by means of an appropriate declaration that the covenants is taken “for the benefit of” whatever the lands may be.’ 6.14 The use of the phrase ‘their heirs and assigns’ in a covenant is insufficient in itself to imply an intention that the benefit of the covenants should run with the vendors’ retained land. In Renals v Cowlishaw,31 a covenant expressed to be made with the covenantees ‘their heirs, executors, administrators and assigns’ simpliciter was held not sufficient to show that assigns of the covenantees’ land were intended to benefit since the assigns referred to could equally well mean assigns of the covenant; there was accordingly no annexation. 6.15 Similarly, in Re Union of London and Smith’s Bank Ltd’s Conveyance,32 a covenant expressed to be made ‘with the vendors their successors and assigns’ was held not to be annexed to the vendors’ remaining land, the Court of Appeal being assisted in this conclusion by the fact that other covenants, entered into by the vendors with the purchasers, were expressed to be made ‘with the purchasers, their heirs and assigns or other the owner or owners for the time being’ of the land sold, thus clearly indicating that the parties intended to annex the latter covenants but not the former. See also J Sainsbury plc v Enfield LBC [1989] 1 WLR 590, especially at p 598. 6.16 In J Sainsbury plc v Enfield London Borough Council,33 Morritt J emphasised that on the authorities, the requisite intention must be apparent from the conveyance itself. In this respect, the inadmissibility of extrinsic evidence to prove an intention to effect annexation is to be contrasted with the admissibility of such evidence to prove an intention to create a building scheme.34

29 30 31 32 33 34

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[2003] 1 P&CR 9, at p 20–23. [1936] Ch 451. (1879) 11 ChD 866, CA. [1933] Ch 611, CA. [1989] 1 WLR 590. As to which, see below, para 8.79 et seq.

The requirements for annexation 6.20 6.17 Blackburne J in MCA made clear,35 however, that the question is whether the intention can be gathered from the words of the instrument as a whole needs to be viewed in the light of the surrounding circumstances. Where, as in MCA, the covenantees did not intend to live on the land, but to sell it off in plots for development, that was pointed out to be consistent with them intending to retain the benefit of the restrictions personally, either by assigning the benefits of particular purchasers or by extracting payments from the owners of the plots as the price for releasing or modifying the restrictions. 6.18 Both MCA and the Sainsbury case are examples of cases where no intention to benefit land of the covenantee could be discerned by the court. In Rogers v Hosegood,36 the covenant was expressed to be made with the covenantees ‘their heirs and assigns’, but in addition stated that it was made with intent that the covenant ‘shall enure for the benefit of [the covenantees] their heirs and assigns and others claiming under them to all or any of their lands adjoining or near to the said premises’ and these added words showed clearly that the ‘assigns’ referred to were assigns of the land. In Drake v Gray,37 the covenant being said to be made with ‘the owners or owner for the time being of the remaining hereditaments so agreed to be partitioned as aforesaid’ showed a clear intention to annex the covenant to each and every portion of the partitioned land so that the benefit of the covenant ran with each and every part of the land. 6.19 As discussed at para 1.36 et seq above, where the parties have expressly referred to a covenant as having been imposed for the purpose of benefiting the retained land of the covenantee, ‘the court would normally assume that it is capable of doing so’: see Marten v Flight Refuelling Ltd,38 Whitgift Homes Ltd v Stocks39 and the other cases referred to in those paragraphs.

Whether an intention to annex be spelt out of the nature and content of the restriction 6.20 The observations of Judge Rubin in Shropshire County Council v Edwards40 set out above must be read subject to the qualification that even though it may appear from the nature and content of the restriction that performance or non-performance will affect the adjoining property of the covenantee, nevertheless, this fact, unsupported by other indications in the document imposing the covenant, will not be sufficient to bring about annexation. As Sir Herbert Cozens-Hardy MR, pointed out in Reid v Bickerstaff 41: ‘I cannot hold that the mere fact that the plaintiffs’ land is adjacent and would be more valuable if the covenant were annexed to the land suffices

35 36 37 38 39 40 41

Re MCA East Ltd [2003] 1 P&CR 9, at p 21. [1900] 2 Ch 388, CA. [1936] Ch 451, CA. [1962] Ch 115 at 136. [2001] EWCA Civ 1732. (1982) 46 P&CR 270. [1909] 2 Ch 305 at 321.

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6.21  Subsequent owners & occupiers of benefited land: (a) annexation to justify the court in holding that it was so annexed as to pass [the benefit of the covenant] without mention simply by a conveyance of the adjacent land.’ 6.21 In Ives v Brown,42 in a conveyance on sale, of a parcel of land forming part of the vendors’ estate, the purchaser covenanted with the vendors ‘their heirs and assigns’ not (inter alios) to do or permit on the premises conveyed ‘a nuisance, annoyance or disturbance to [the vendors] or the persons deriving title under them or either of them’. Sargant J held that there was not enough in the conveyance to annex the benefit of the covenants to the remainder of the estate or any particular part thereof. In the course of his judgment his Lordship said:43 ‘No doubt one can see plainly that the covenants were inserted because the covenantees were owners of adjoining property and with a view to benefiting them accordingly. But this was really equally obvious in Renals v Cowlishaw,44 and I cannot see that there is any greater reason in this case than in that for ascribing an intention to benefit the retained property and the owners thereof from time to time by virtue merely of their ownership.’ 6.22 Similarly, in Re Union of London and Smith’s Bank Ltd’s Conveyance,45 in a conveyance executed in 1908, the purchasers covenanted with ‘the vendors their successors and assigns’ not to do anything on the land conveyed which might be or become a nuisance and not to erect or authorise to be erected any factory or any hotel public house, beer house or beer shop ‘within 460 yards of the said land coloured green’ being land retained by the vendors. Both Bennett J and the Court of Appeal held that there had been no annexation. In delivering the judgment of the Court of Appeal, Romer LJ, after referring to the content of the restrictions, said:46 ‘This circumstance does, no doubt, give some ground for the suggestion that these two restrictions were intended for the benefit of the green land as distinct from any other lands of the vendors and that, therefore, the restrictions as a whole should be so regarded.’ However, the court considered that the restrictions might also have been intended to benefit other neighbouring land which was owned by the vendors and held that there was no annexation to the land coloured green.47 6.23 In MCA, Blackburne J quoted the words of Sir Herbert Cozens-Hardy MR in Reid v Bickerstaff (above) and held that: ‘The mere fact that the vendor’s

42 [1919] 2 Ch 314 (Sargant J). 43 Ibid, at p 322. 44 (1878) 9 ChD 125; affd (1879) 11 ChD 866, where the restrictions in question were the usual residential estate restrictions relating to building lines, value, size and user as dwelling houses only. 45 [1933] Ch 611, CA. The full facts are set out below at para 7.7. 46 Ibid, at p 636. 47 For a fuller account of the grounds of the court’s decision, see below, para 7.8 et seq. See also, Reid v Bickerstaff [1909] 2 Ch 305, at p 321 where Cozens-Hardy MR said: ‘I cannot hold that the mere fact that the claimants’ land is adjacent and would be more valuable if the covenant were annexed to the land suffices to justify the Court in holding that it was so annexed as to pass without mention by a simple conveyance of the adjacent land.’ And see also, Radstock Cooperative and Industrial Society Ltd v Norton-Radstock UDC [1968] Ch 605, at p 628.

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The requirements for annexation 6.25 neighbouring land might be more valuable and be benefited, if the benefit of the covenants were annexed to it, is of itself insufficient’.

Section 58 of the Conveyancing Act 1881 6.24 What has been said above concerning covenants expressed to be made with the covenantee ‘his heirs and assigns’ without more, applies equally where such words are implied (in the case of covenants entered into after 1881 and before 192648) by section 58 of the Conveyancing Act 1881, which (so far as material) provides that: ‘A covenant relating to land of inheritance … shall be deemed to be made with the covenantee, his heirs and assigns, and shall have effect as if heirs and assigns were expressed’. 6.25 The question whether the words of this section were sufficient to bring about annexation arose in J Sainsbury plc v Enfield London Borough Council,49 where the facts were as follows. The owner of land forming part of the Highfield House Estate, Enfield, Alfred Walker, by a conveyance executed in 1894, conveyed part of the land to a purchaser. In that conveyance, the purchaser covenanted ‘with the said Alfred Walker’ to observe certain restrictions in respect of the part of the land conveyed and Alfred Walker covenanted to observe certain other restrictions in respect of ‘that portion of the said Highfield House Estate … shown on the said plan and thereon marked “other land belonging to Alfred Walker Esq”’. The plan referred to was drawn in the margin of the conveyance and showed the land conveyed and (it may be inferred) the other land belonging to Alfred Walker. The claimant was a contracting purchaser (under a conditional contract) from a successor in title of Alfred Walker’s purchaser and the defendant represented all the owners of the land belonging to Alfred Walker at the time of the 1894 conveyance. The claimant sought a declaration under section 84(2) of the Law of Property Act 1925 that there were now no persons entitled to enforce the covenants entered into by Alfred Walker’s purchaser. The defendant council claimed that on the true construction of the 1894 conveyance, the benefit of those covenants had been annexed to Alfred Walker’s retained land by virtue of the combined effect of the identification of such land in the 1894 conveyance and the words imported into the purchaser’s covenant by virtue of section 58 of the Conveyancing Act 1881 with the resulting continued enforceability of the covenants by the present owners of that land. Dealing with this argument, Morrit J held that construing the 1894 conveyance in the light of the relevant surrounding circumstances the indications were equally consistent with an intention that the benefit of the covenants should remain with Alfred Walker and that in the absence of any indication of an intention to annex the covenant to the retained land in the covenant itself or of any necessary

48 Although s 58 of the Conveyancing Act 1881 has been repealed (Law of Property Act 1925, s 207 and Seventh Schedule) its effect on such covenants is preserved by s 78(2) of the Law of Property Act 1925. 49 [1989] 1 WLR 590 (Morritt J). The section was also relied upon in Shropshire County Council v Edwards (1982) 46 P&CR 270, but the court found it unnecessary to decide the point (at p 278).

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6.26  Subsequent owners & occupiers of benefited land: (a) annexation implication of such an intention derived from the surrounding circumstance, no such annexation was established.50

Pre-1926 position following the decision in the Federated Homes case 6.26 The decision of the Court of Appeal in the landmark case of Federated Homes v Mill Lodge Properties Ltd has substantially affected the law relating to annexation of covenants post-1925 and will be now be explained. However, it does not affect the position in relation to covenants entered into prior to 1926, and the interpretation set out in section 78 of the Law of Property Act 1925 has been held not to apply to its predecessor, section 58 of the Conveyancing Act 1881.51

Post-1925 restrictive covenants (A) So long as the covenant is one ‘relating to the land of the covenantee’ the condition that the covenant is intended to benefit such land is automatically fulfilled – there is annexation under section 78 of the Law of Property Act 1925 6.27 In the case of covenants relating to any land of the covenantee entered into on or after 1 January 1926, section 78(1) of the Law of Property Act 1925 will apply unless a contrary intention appears in the instrument creating the covenants.52 The subsection provides as follows: ‘(1) A covenant relating to any land of the covenantee shall be deemed to be made with the covenantee and his successors in title and the persons deriving title under him or them, and shall have effect as if such successors and other persons were expressed. For the purposes of this subsection in connexion with covenants restrictive of the user of land ‘successors in title’ shall be deemed to include the owners and occupiers for the time being of the land of the covenantee intended to be benefited.’

50 Since the defendant council had been appointed in the proceedings to represent persons who, between them, were the owners of all the land retained by Alfred Walker at the time of the 1894 conveyance, an argument could perhaps have been mounted that notwithstanding the absence of annexation, the benefit of the covenant was either vested collectively in such present owners or that it was vested in the present owner of the last parcel of the retained land which was disposed of by Alfred Walker’s executors after his death. See below, para 7.16 et seq. 51 See J Sainsbury plc v Enfield LBC [1989] 1 WLR 590 at p 601 (Morritt J): ‘There are no words in s 58 capable by themselves of effecting annexation of the benefit of a covenant. All that section did was to deem the inclusion of words which both before and after the enactment of s 58 had, with the exception of Mann v Stephens 15 Sim 377, been consistently held to be insufficient without more to effect annexation of the benefit of a covenant. Also, Seymour Road (Southampton) Ltd v Williams [2010] EWHC (Ch) at para 21 (Peter Smith J). 52 As to what kind of a contrary intention will exclude the subsection see below, para 6.42 et seq.

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The requirements for annexation 6.31 6.28 The condition precedent to this statutory addition to the words of a covenant is that the covenant must be one ‘relating to any land of the covenantee’. This would appear to be a simple question of fact, it not appearing to be material (for this purpose) whether the land of the covenantee is identified in the instrument creating the covenant or by extrinsic evidence. Where the subsection applies, the covenant is deemed to be made with the covenantee ‘his successors in title and the persons deriving title under him or them’ and it is clear both from the context and from the extension (at the end of section 78(1)) of the meaning of ‘successors in title’ so as to include ‘occupiers’, that (unlike the position in the case of Re Union of London and Smith’s Bank Ltd’s Conveyance referred to above) the ‘successors’ referred to are successors to the covenantee’s land and not merely to the covenant. Accordingly, the words statutorily imported are such as show an intention to benefit the land of the covenantee, thus logically satisfying the second of the above requirements of annexation (referred to in para 6.11 above). 6.29 There is, however, nothing in the section which dispenses with the first requirement (referred to in para 6.7 above) and accordingly, the effect of the subsection would seem to depend upon whether ‘the land of the covenantee’ in question is or is not identified in the instrument creating the covenant. 6.30 It follows from the above that, with a covenant entered into after 1925, so long as the ‘the land of the covenantee’ which the covenant benefits (or ‘touches and concerns’) is identified in the instrument creating the covenant and easily ascertainable (as to which, see below), then both requirements for annexation would be satisfied with the result that the normal consequences of annexation which flow from the use of the statutory words would ensue. 6.31 It was so held by the Court of Appeal in the landmark case of Federated Homes Ltd v Mill Lodge Properties Ltd.53 Accordingly, so long as the covenantee’s land is so identified, annexation in post-1925 covenants is automatic.54 This case has received some extra-judicial criticism.55 However, it appears to fit logically into the accepted rules of annexation referred to above, and has considerably simplified the law in relation to annexation. The material facts of the case were as follows. In February 1971, Mackenzie Hill Ltd (‘Mackenzie’), the owner of a site which included three areas of land referred to as the red land, the green land and the blue land, sold and conveyed the blue land to the defendant company. In the conveyance the defendant covenanted ‘with the Vendor’ not to build on the blue land more than a total of 300 dwellings ‘so as not to reduce the number of units which the Vendor might eventually erect on the retained land’ under a planning permission which was in force which restricted the total number of dwellings which could be built on the entire site (‘the covenant’). Immediately after that conveyance (and a simultaneous

53 [1980] 1 WLR 594. 54 As emphasised eg by Etherton J in Mohammadzadeh v Joseph [2008] 1 P&CR 6. The rule is, however, subject to any words showing that this was not intended – see below, para 6.42 et seq. 55 Particularly in two scholarly articles, by G H Newsom QC, on ‘Universal Annexation?’ in (1981) 97 LQR 32, and (1982) 98 LQR 202.

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6.32  Subsequent owners & occupiers of benefited land: (a) annexation conveyance of another part of the site) the only land retained by Mackenzie consisted of the red land and the green land.56 In March 1971, Mackenzie sold and conveyed the red land and the green land to William Brandt’s Sons & Co Ltd (‘Brandt’s) and the conveyance to Brandt’s contained an express assignment of the benefit of the covenant. In March 1971, Brandt’s sold and conveyed the green land to the claimant company and the conveyance contained an express assignment of the benefit of the covenant. Shortly afterwards, Brandt’s conveyed the red land to BTA Trading Co Ltd (‘BTA’) and the conveyance to BTA also contained an express assignment of the benefit of the covenant. Following this conveyance BTA’s title to the red land was registered. In March 1975, BTA sold and transferred the red land to the claimant company. The transfer did not contain any express assignment of the benefit of the covenant. The defendant company, having obtained the requisite planning permission, was now proposing to build 332 dwellings on the blue land and the claimant company sought an injunction to restrain them from building more than 300 dwellings. 6.32 Whilst the claimant was undoubtedly entitled to the benefit of the covenant as owner of the green land (in relation to which there was an unbroken chain of assignments), the question was whether it was entitled to enforce the covenant as owner of the red land (in relation to which the chain of assignments was incomplete). On the face of the words of the covenant, there was no annexation, the covenant having been made ‘with the Vendor’ simpliciter. But the claimant argued that the covenant related to land of the original covenantee, namely, to the red land and the green land, that the covenant was therefore deemed, under section 78(1), to have been made with the covenantee and its successors in title and the persons deriving title under it or them and that the benefit of the covenant therefore passed with the red land into the hands of the claimant. In the course of his judgment (with which Browne LJ and Megaw LJ agreed), Brightman LJ said:57 ‘In the end, I come to the conclusion that section 78 of the Law of Property Act 1925 caused the benefit of the restrictive covenant in question to run with the red land and therefore to be annexed to it, with the result that the claimant company is able to enforce the covenant against Mill Lodge, not only in its capacity as owner of the green land, but also in its capacity as owner of the red land.’ 6.33

In relation to this decision, the following points may be noted.

(a) Although Brightman LJ expressed the view that the claimant company’s ownership of the green land, with its unbroken chain of assignments, was ‘sufficient to entitle the claimant company to relief, and that the claimant’s

56 57

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Together with the (irrelevant) ‘small areas’ referred to below. Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594, at p 607C.

The requirements for annexation 6.34 right to relief would be no greater at the present time if it were held that it also had the benefit of the covenant in its capacity as owner of the red land’,58 nevertheless, the position concerning the red land was treated as a substantive issue in the case and, as such, was part of the ratio decidendi.59 (b) As a matter of construction, Brightman LJ found60 that the words ‘the retained land’ meant the red land and the green land together with certain small areas comprised in the original site which the covenantee still retained.61 This had two consequences, namely: (i) since the substantive contents of the covenant directly linked the burdened land (the blue land) with this retained land, the covenant was a ‘covenant relating to [the retained] land of the covenantee’ so as to satisfy the condition precedent to the operation of section 78(1);62 (ii) the land to which the covenant related was in fact identified by the instrument which created the covenant (so the court did not go on to consider what the position would be if it could only be identified by purely extraneous evidence – as to that, see below). The second of the requirements for annexation was accordingly satisfied. 6.34 It was further argued in Federated Homes that if (as was held to be the case) the covenant was annexed to the covenantee’s retained land, such annexation was to the whole of the retained land (only) and not to any separate part and that, in the absence of any indication that annexation was to the retained land or any part or parts thereof, the red land, being part only of the land to which the covenant was annexed, could not, treated by itself, claim the benefit of such annexation. This argument was rejected. Brightman LJ said:63 ‘… I would have thought, if the benefit of a covenant is, on a proper construction of a document, annexed to the land, prima facie it is annexed to every part thereof, unless the contrary clearly appears.’ Megaw LJ, agreeing with the judgment of Brightman LJ, added:64 ‘… I find great difficulty in understanding how, either as a matter of principle, or as a matter of practical good sense in relation to a legal relationship of this sort, it can be said that a covenant, which ex hypothesis has been annexed to

58 Ibid, at p 603B. 59 An argument that the part of the judgments dealing with the red land were obiter was rejected by HH Judge Paul Baker QC sitting as a High Court judge in Roake v Chadha [1984] 1 WLR 40. Whilst it is clear that the claimant company in the Federated Homes case was seeking an injunction, it does not appear, from the report, specifically to have been asking for a declaration of entitlement to the benefit of the covenant in respect of the green land and the red land respectively. Had it done so, then the legal position concerning the red land, considered as a separate entity, would clearly have been directly in issue in respect of the declaratory relief. However, the legal position of the red land, having been specifically dealt with as such by the Court of Appeal, it must presumably be regarded as a specific part of the general relief granted and thus part of the ratio decidendi. 60 Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594, at p 599E. 61 The small areas referred to were of no direct relevance in the case: see ibid, p 603B. 62 Ibid, at p 605B. 63 Ibid, at p 606G. 64 Ibid, at p 608B.

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6.35  Subsequent owners & occupiers of benefited land: (a) annexation the land as a whole, is somehow or other not annexed to the individual parts of that land.’ Though considered by the court to be clear, this also in fact represented a change in the law as it was declared to be (where the covenant was not expressly stated to be for the benefit of the whole or any part or parts of the covenantee’s land).65 This point is considered in more detail later in this chapter.66 but is now generally regarded being as the true legal position.

(B) The land which is to be benefited must (still) be able to be identified from the words of the instrument and be easily ascertainable 6.35 The Court of Appeal in Federated Homes left open the question of whether, in the case of a post-1925 covenant, if the existence and identity of the land to which a covenant relates can only be gleaned from evidence outside the instrument creating the covenant, annexation would still result from the application of the subsection. However, it has now been made clear that it will not. As referred to above (at para 6.10 above), the Court of Appeal in Marquess of Zetland v Driver67 stated that in the case of a pre-1926 conveyance ‘the land which is intended to be benefited must be defined so as to be easily ascertainable’. 6.36 This decision was overlooked in Federated Homes v Mill Lodge Properties,68 in which Marquess of Zetland v Driver was not cited, and the question did not actually arise for decision (as the land was clear from the conveyance itself). In Crest Nicholson Residential (South) Ltd v McAllister,69 however, the Court of Appeal held, in relation to post-1925 covenants, that it is still a requirement that the land intended to be benefited must be identified in the instrument containing the covenant so that it is easily ascertainable. In Crest Nicholson, the Court, through Chadwick LJ, stated that: ‘30. The decision of this court in the Federated Homes case leaves open the question whether section 78 of the 1925 Act only effects annexation when the land intended to be benefited is described in the instrument itself (by express words or necessary implication, albeit that it may be necessary to have regard to evidence outside the document fully to identify that land) or whether it is enough that it can be shown, from evidence wholly outside the document, that the covenant does in fact touch and concern land of the covenantee which can be identified …

65 In particular, as set out in Re Union of London and Smith’s Bank Ltd’s Conveyance [1933] Ch 611 and Russell v Archdale [1964] Ch 38 – see paras 6.53 and 6.58 below. 66 Below, para 6.65 et seq. 67 [1939] Ch 1, at p 8. 68 [1980] 1 WLR 594. 69 [2004] 1 WLR 2409.

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The requirements for annexation 6.38 32. The question left open in the Federated Homes case [1980] 1 WLR 594 had, I think, already been answered in the judgment of this court in Marquess of Zetland v Driver [1939] Ch 1, a decision not cited in the Federated Homes case.’ 6.37 Dealing with annexation, Chadwick LJ, quoted from page 8 of Marquess of Zetland v Driver as follows: ‘the land which is intended to be benefited must be so defined as to be easily ascertainable,70 and the fact that the covenant is imposed for the benefit of that particular land should be stated in the conveyance and the persons or the class of persons entitled to enforce it. The fact that the benefit of the covenant is not intended to pass to all persons into whose hands the unsold land may come is not objectionable so long as the class of persons intended to have the benefit of the covenant is clearly defined.’ He went on: ‘33. In its later decision in the Federated Homes case [1980] 1 WLR 594 this court held that the provisions of section 78 of the 1925 Act had made it unnecessary to state, in the conveyance, that the covenant was to be enforceable by persons deriving title under the covenantee or under his successors in title and the owner or occupier of the land intended to be benefited, or that the covenant was to run with the land intended to be benefited; but there is nothing in that case which suggests that it is no longer necessary that the land which is intended to be benefited should be so defined that it is easily ascertainable. In my view, that requirement, identified in Marquess of Zetland v Driver [1939] Ch 1 remains a necessary condition for annexation’ [emphasis added]. 6.38

The Court provided some reasons for this – Chadwick LJ said:

‘34 There are, I think, good reasons for that requirement. A restrictive covenant affecting land will not be enforceable in equity against a purchaser who acquires a legal estate in that land for value without notice of the covenant. A restrictive covenant imposed in an instrument made after 1925 is registrable as a land charge under class D(ii): section 10(1) of the Land Charges Act 1925 and, now, section 2(5) of the Land Charges Act 1972. If the title is registered, protection is effected by entering notice of the restrictive covenant on the register: section 50 of the Land Registration Act 1925 and, now, section 11 of the Land Registration Act 2002. Where practicable the notice shall be by reference to the instrument by which the covenant is imposed and a copy or abstract of that instrument shall be filed at the registry: section 50(1) of the Land Registration Act 1925 and section 3(5) of the Land Charges Act 1972. It is obviously desirable that a purchaser of land burdened with a restrictive covenant should be able not only to ascertain, by inspection of the entries on the relevant register, that the land is so burdened, but also to ascertain the land for which the benefit of the covenant was taken-so that he can identify who can enforce the covenant. That latter object is achieved if the land which is intended to be benefited is defined in the instrument so as to be easily ascertainable. To require a purchaser of land burdened with a restrictive covenant, but where the land for the benefit of which the covenant

70

This is Chadwick LJ’s emphasis.

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6.39  Subsequent owners & occupiers of benefited land: (a) annexation was taken is not described in the instrument, to make inquiries as to what (if any) land the original covenantee retained at the time of the conveyance and what (if any) of that retained land the covenant did, or might have, “touched and concerned” would be oppressive. It must be kept in mind that (as in the present case) the time at which the enforceability of the covenant becomes an issue may be long after the date of the instrument by which it was imposed.’ 6.39 That the land which is intended to be benefited must be defined so as to be easily ascertainable does not mean that this must be possible exclusively from the conveyance itself – the question ‘is whether the land intended to be benefited can be identified (from a description, plan or other reference in the conveyance itself, but aided, if necessary, by external evidence to identify the land so described, depicted or otherwise referred to) …’ (para 45 of the judgment). Accordingly, it must be able to be identified by reference to the conveyance aided by external evidence, but external evidence alone (ie where there is no reference to the land to be benefited in the conveyance or other creating instrument) will not do. 6.40 For a recent case where the objectors to an application for the discharge or modification of a covenant under section 84(1) of the Law of Property Act 1925 failed to show they had the benefit of the covenant because of the failure of the instrument to define the benefited land in a way that made it easily ascertainable, see Re Sutton & East Surrey Water plc’s Application.71 6.41 Where the covenant is expressed to be for the benefit of any adjoining land which the covenantee may acquire in the future, there would clearly be no annexation since no benefited land of the covenantee at the time of the conveyance would be identified. Accordingly, it has now been decided that the effect of section 78(1) in a case where there is no annexation is merely that the covenant is not personal to the covenantee but is capable of being assigned to a successor in title or disposed of for the benefit of persons having derivative interests.72

Excluding or limiting section 78 of the Law of Property Act 1925 6.42 Unlike section 79 of the Law of Property Act 1925 (which applies ‘unless a contrary intention is expressed’) there is no corresponding provision in section 78 expressly enabling the parties to a covenant to negative the effect of the section. In Roake v Chadha,73 it was argued that because of this, section 78 must be treated as mandatory so that a provision in a restrictive covenant that ‘this

71 [2017] UKUT 248 (LC). 72 Quaere whether the ‘occupiers’ referred to in the second paragraph of s 78(1) would include persons, such as licensees, who have no proprietary interest in the land. In the Lands Tribunal case of Re Da Costa’s Application (1986) 52 P&CR 99, the President of the Tribunal held a licensee of land to which the benefit of a covenant had been annexed under s 78(1) to have no locus standi to object to an application for the modification of the covenant. 73 [1984] 1 WLR 40.

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The requirements for annexation 6.44 covenant shall not enure for the benefit of any owner or subsequent purchaser of any part of the vendors Sudbury Court Estate at Wembley unless the benefit of this covenant shall be expressly assigned’ did not, in the absence of an express assignment, prevent the benefit of the covenant from passing to a successor in title under the section. Whilst expressing himself as being far from satisfied that the section had mandatory operation, HH Judge Paul Baker QC sitting as a High Court judge, held that even if the statutory importation of the additional words could not be excluded, a covenant containing those words nevertheless had to be construed as a whole to see whether the benefit was annexed and that giving full weight to both the statutorily imported words and the express words, the result was a plain intention that the benefit of the covenant was not annexed.74 He said:75 ‘The true position as I see it is that even where a covenant is deemed to be made with successors in title as section 78 requires, one still has to construe the covenant as a whole to see whether the benefit of the covenant is annexed. Where one finds as in the Federated Homes case, the covenant is not qualified in any way, annexation may be readily inferred; but where, as in the present case, it is expressly provided: “this covenant shall not enure for the benefit of any owner or subsequent purchaser of any party to the vendor’s Sudbury Court Estate at Wembley unless the benefit of this covenant shall be expressly assigned …” one cannot just ignore those words. One … has to consider the covenant as a whole to determine its true effect. When one does that, then it seems to me that the answer is plain and in my judgment the benefit is not annexed. That is giving full weight to both statutory force and also what is already there in the covenant.’ 6.43 In Crest Nicholson,76 Chadwick LJ for the Court of Appeal agreed, at para 41, with the decision of HH Judge Paul Baker QC that section 78 could be displaced by a contrary intention being shown. He said: ‘I can see no reason why, if the original covenantor and covenantee make clear their mutual intention in that respect [viz that the benefit shall not pass to successors in title without an express contractual assignment], the legislature should wish to prevent effect being given to that intention.’ 6.44 Further, he pointed out in paras 42 and 43 that whilst section 78 in its wording was on its face mandatory in deeming successors to be included, whereas section 79 (dealing with the burden of restrictive covenants77) was a deeming provision ‘subject to a contrary intention appearing’— ‘[S]ection 78 of the 1925 Act defines “successors in title” as the owners and occupiers of the time being of the land of the covenantee intended to be benefited. In a case where the parties to the instrument make clear their intention that land retained by the covenantee at the time of the conveyance effected by the transfer is to have the benefit of the covenant only for so long

74

75 76 77

The same would presumably apply in relation to land sold off in cases of ‘diminishing benefited land’ as in Marquess of Zetland v Driver [1939] Ch 1 and Wrotham Park Estate Co v Parkside Homes Ltd [1974] 1 WLR 798. This may explain (or give an added reason) why the claimants in those cases did not seek to rely on s 78(1). Ibid, at p 46. [2004] 1 WLR 2409. Considered later in this book: see Chapter 9.

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6.45  Subsequent owners & occupiers of benefited land: (a) annexation as it continues to be in the ownership of the original covenantee, and not after it has been sold on by the original covenantee-unless the benefit of the covenant is expressly assigned to the new owner – the land of the covenantee intended to be benefited is identified by the instrument as … not including so much of the land as has been sold off without the benefit of an express assignment … This approach to section 78 of the 1925 Act provides, as it seems to me, the answer to the question why, if the legislature did not intend to distinguish between the effect of section 78 (mandatory) and the effect of section 79 (subject to contrary intention), it did not include the words “unless a contrary intention is expressed” in the first of those sections. The answer is that it did not need to. The qualification “subject to contrary intention” is implicit in the definition of “successors in title” which appears in section 78(1); that is the effect of the words “the land of the covenantee intended to be benefited”. If the terms in which the covenant is imposed show – as they did in Marquess of Zetland v Driver [1939] Ch 1 and in Roake v Chadha [1984] 1 WLR 40 – that the land of the covenantee intended to be benefited does not include land which may subsequently be sold off by the original covenantee in circumstances where (at the time of that subsequent sale) there is no express assignment of the benefit of the covenant, then the owners and occupiers of the land sold off in those circumstances are not “owners and occupiers for the time being of the land of the covenantee intended to be benefited”; and so are not “successors in title” of the original covenantee for the purposes of section 78(1) in its application to covenants restrictive of the user of land.’ The land to which section 79 applied was different, so the same logic did not apply there; hence the caveat ‘unless a contrary intention’ were imported there (see para 44). The position reached is surely a sensible one. There is no good reason why Parliament should have intended to restrict the parties’ freedom to prevent the benefit of the covenant from automatically passing to successors in title by making that intention clear.

THE LAND TO WHICH ANNEXATION TAKES PLACE 6.45 Assuming that the requirements (considered above) for annexation of the benefit of a restrictive covenant to identifiable land are prima facie satisfied, the following situations fall to be considered: ●●

●● ●● ●● ●● 84

Case 1. The covenant is expressed to be annexed (either directly or by virtue of section 78(1) of the Law of Property Act 1925) to identifiable land as a whole but, on the facts, the covenant, whilst touching and concerning some part, does not touch and concern the full extent of that land. Case 2. As in Case 1 except that the covenant is expressed to be annexed to the land and to each and every part thereof. Case 3. As in Case 1 except that on the facts, the covenant touches and concerns the full extent of the land. Case 4. As in Case 3 except that the covenant is annexed to the land and (in terms) to each and every part thereof. Case 5. The covenant touches and concerns the land but is expressed to be annexed only in a limited way – for example, it is provided that it is

The land to which annexation takes place 6.47 annexed to such of the identified land as remains unsold or shall be sold by the vendor or his successors in title with the express benefit of the covenant. Each of these will be considered in turn.

Case 1 6.46 In Case 1 the covenant is expressed to be annexed (either directly or by virtue of section 78(1) of the Law of Property Act 1925) to identifiable land as a whole but on the facts, the covenant, whilst touching and concerning some part, does not touch and concern the full extent of that land. 6.47 This case is concerned with the position where the expressed annexation goes beyond what the law allows (ie to cover land which is not touched and concerned by it). This is the situation which arose in Re Ballard’s Conveyance,78 where in a conveyance of 18 acres of land executed in 1906 by a vendor (Mrs Ballard) who was a tenant for life under the Settled Land Act 1882 of the Childwickbury Estate comprising some 1,700 acres, the purchaser (the applicant in the present application under section 84(2) of the Law of Property Act 1925) covenanted with Mrs Ballard ‘her heirs and assigns and successors in title owners from time to time of the Childwickbury Estate’ to perform and observe certain restrictions. The whole of the Childwickbury Estate for the benefit of which the covenant was found to have been taken, was subsequently sold and conveyed to the respondent company. On the question whether the respondent company was entitled to the benefit of the covenant, Clauson J, in the absence of evidence to show that the restrictions, or some of them, could benefit the whole of the Childwickbury Estate, concluded that the covenant could only benefit some comparatively small portion of the estate, with the result that it did not touch and concern the whole of the land to which it had been expressed to be annexed and that the covenant could not be severed so as to treat it as annexed to such part of the land as it did in fact touch and concern. In relation to this decision, the following points fall to be noted: (a) Whilst Clauson J regarded the burden of proof (as to whether the land to which the covenant was expressed to be annexed was in fact touched and concerned by the covenant) to be upon the person who claimed to be entitled to enforce the covenant, it has since been held that there is a rebuttable presumption that such land is touched and concerned and that the onus of establishing the contrary is on the party who claims that the covenant does not touch and concern such land.79 (b) On the facts as found concerning ‘touching and concerning’, it is clear that in attempting to annex the covenant to that part of the land which was not touched and concerned, the attempt could not succeed since the

78 [1937] Ch 473 (Clauson J). 79 See Marten v Flight Refuelling Ltd [1962] Ch 115 (Wilberforce J) and Wrotham Park Estate Co v Parkside Homes Ltd [1974] 1 WLR 798 (Brightman J) and see also para 1.36 et seq above.

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6.48  Subsequent owners & occupiers of benefited land: (a) annexation covenant would, vis-à-vis that land, be personal.80 This part of the decision accordingly remains intact. (c) On the issue of severance, it should be noted that the case is not authority for the proposition that where a restrictive covenant is annexed to the whole of the covenantee’s land, then a subsequent owner of part does not get the benefit.81 It was concerned with the question of whether, when the expressed intention to annex the covenant to an extensive area of land is, as to part of that land, legally impossible, the element of impossibility makes the entire annexation void or whether the impossible element can be severed so as to leave what remains intact. The difficulty with the latter course is that it requires the covenant to be re-written and this is something the courts will not, on a severance exercise, generally do.82 This part of the decision would also, therefore, appear to remain valid.83

Case 2 6.48 As in Case 1 except that the covenant is expressed to be annexed to the land and to each and every part thereof. As indicated when considering Re Ballard’s Conveyance above, the problem which confronted Clauson J in that case was the legal impossibility of giving effect to the actual terms of the covenant. Where, however, the terms of the covenant are in part apt for their purpose and in part excessive, then it is permissible, under the general rules of severance, to treat the one part as valid and effective and the other part as invalid and of no effect.84 This is different from rewriting or adding words to the covenant.85 6.49 The distinction is illustrated by Marquess of Zetland v Driver.86 In that case, a restrictive covenant entered into by a purchaser in a conveyance made

80 Since, however, in the instant case, the burdened land was still in the hands of the applicant as original covenantor, there would appear to have been nothing to prevent the covenant from being enforceable by the respondent company against the applicant at law (but excluding the remedy of injunction) had the covenant been expressly assigned to the respondent company at the time of its purchase of the Childwickbury Estate. 81 As to which, see Case 3, below, para 6.50. 82 See in regard to the severance of covenants in restraint of trade, Alechobb Ltd v Total Oil GB Ltd [1985] 1 WLR 173, CA; T Lucas & Co Ltd v Mitchell [1974] Ch 129; Putsman v Taylor [1927] 1 KB 637; Goldsoll v Goldman [1915] 1 Ch 292. In these cases, there was, of course, an element of public policy involved which contributed to the court’s unwillingness to rewrite the covenants. But it is at least clear from these cases that if, in Re Ballard’s Conveyance, the attempted annexation had been to the Childwickbury Estate ‘or any part or part of such Estate which is touched and concerned by this covenant’, then severance by deleting the first reference to the estate would have been permissible. 83 It is considered that none of the later cases, some of which have questioned the notion that annexation to the whole of an area of land cannot operate as annexation to any individual part capable of benefiting (though see now below, para 6.67 et seq), has any relevance to this part of the decision. 84 In relation to this, see footnote 82 above. 85 The difference in principle and in effect is illustrated not only by the cases on covenants in restraint of trade but also in other contexts. Eg, in relation to the question whether the provisions of a settlement which are made void by s 106 of the Settled Land Act 1925 can be pruned out so as to leave the main stem intact or whether they go to the root of the entire plant; contrast Re Ames [1893] 2 Ch 479 with Re Trenchard [1902] 1 Ch 378. 86 [1939] Ch 1, CA.

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The land to which annexation takes place 6.50 in 1928 was expressed to be intended ‘to benefit and protect such part or parts of the lands in the borough township or parish of Redcar in the North Riding of the county of York now subject to the settlement (a) as shall for the time being remain unsold or (b) as shall be sold by the vendor or his successors in title with the express benefit of this covenant’. The question was whether the vendor’s successor in title of part of the land so stated to be benefited and protected (to whom there had been no express assignment of the benefit of the covenant) could enforce the covenant. At first instance, Bennett J found as a fact87 that the covenant did not touch and concern ‘the greater part of what was owned by [the vendor] in 1928’ and decided that Re Ballard’s Conveyance required him to hold that the attempted annexation of the covenant to the land of the covenantee failed. On appeal, the Court of Appeal held that Re Ballard was clearly distinguishable: ‘… if only on the ground that in that case the covenant was expressed to run with the whole estate, whereas in the present case no such difficulty arises, because the covenant is expressed to be for the benefit of the whole or any part or parts of the unsold settled property.’ The words of annexation were thus construed88 as providing alternatively for annexation to the whole or for annexation to any part thus permitting the first (excessive) annexation to be disregarded and the second (permissible) annexation to be treated as standing on its own feet. This decision accordingly emphasises the need, where annexation is expressly89 provided for, for some such words as ‘or any part or parts thereof capable of benefiting from this covenant’ to be added after the reference to the benefited land.90

Case 3 6.50 As in Case 1 except that on the facts, the covenant in fact touches and concerns the full extent of the land. In this case, no question arises concerning the initial validity of the annexation to the whole of the land. Nor is there any doubt, in such a case, but that the benefit of the covenant would run in favour of any owner of the whole of the benefited land. But if the benefited land is subsequently fragmented into different ownership, the question then arises whether the benefit of the covenant runs with the separate parts of the benefited land.

87 [1937] Ch 651, at p 660. 88 Somewhat liberally, it would appear, in view of the word ‘such’ rather than the word ‘any’ preceding the words ‘part or parts of the lands’ in the words of covenant. 89 As opposed to taking effect under s 78(1) of the Law of Property Act 1925, the opening words of which would appear automatically to limit annexation to land which is in fact touched and concerned by reason of the identity between such land and ‘the land of the covenantee’ to which the covenant relates: see the observations of Brightman LJ in Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594, at p 605B. 90 The same observation applies in relation to the possibility that, even if the land expressed to be benefited is all capable of being touched and concerned, it may not all be owned by the covenantee. In such a case the purported annexation would, in part, be ineffective and, therefore, if there were no words of severance enabling the potentially effective part to stand on its own feet, the purported annexation would entirely fail: cf Re Selwyn’s Conveyance [1967] Ch 674 (Goff J).

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6.51  Subsequent owners & occupiers of benefited land: (a) annexation This raises two separate issues. First, whether it is possible, as a matter of law (or equity), for the benefit of a restrictive covenant to be severed so as to increase the number of persons who can severally enforce the covenant. Second, if there is no legal impediment, but severability depends on the intention of the parties, how that intention is established. 6.51 The position concerning the first issue was outlined by Romer LJ, in Re Union of London and Smith’s Bank Ltd’s Conveyance.91 Delivering the judgment of the Court of Appeal, Romer LJ, after referring to the running of the burden of a restrictive covenant under the rule in Tulk v Moxhay, said: ‘It was open, therefore, to the Courts of Equity to prescribe the particular class of assignees of the covenant to whom they should concede the benefit of the rule. This they have done, and in doing so have included within the class persons to whom the benefit of the covenant could not have been assigned at law. For at law the benefit could not be assigned in pieces. It would have to be assigned as a whole or not at all. And yet in equity the right to enforce the covenant can in certain circumstances be assigned by the covenantee from time to time to one person after another.’ In principle, therefore, there is, in equity, nothing to prevent the benefit of a restrictive covenant from being severed if that is the intention. 6.52 The position concerning the second issue (intention) was originally dealt with in the classic observations of Hall V-C in Renals v Cowlishaw92 where he said: ‘… in order to enable a purchaser as an assign (such purchaser not being an assign of all that the vendor retained when he executed the conveyance containing the covenants, and that conveyance not shewing that the benefit of the covenant was intended to enure for the time being of each portion of the estate so retained or of the portion of the estate of which the Plaintiff [Claimant] is assign93) to claim the benefit of a restrictive covenant, this, at least, must appear, that the assign acquired his property with the benefit of the covenant …’ 6.53 These observations were included in a passage which was cited with approval by Collins LJ, delivering the judgment of the Court of Appeal in Rogers v Hosegood94 and were also referred to by Romer LJ in Re Union of London and Smith’s Bank Ltd’s Conveyance in the context of the running of the benefit of a covenant which is annexed to land, after which he said:95 ‘It follows that, if what is being acquired by the purchaser was only part of the land shown by the conveyance as being intended to be benefited, it must also be shown that the benefit was intended to enure to each portion of that land.’96

91 92 93 94 95 96

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[1933] Ch 611, at p 630. (1878) 9 ChD 125, at p 130. On appeal, (1879) 11 ChD 866: these observations were amongst those expressly adopted in their entirety by James and Baggallay LJJ, Thesiger LJ expressing himself as being of the same opinion. Emphasis added. [1900] 2 Ch 388, at p 406. Ibid, at p 628. This statement of the law was cited and applied by the Court of Appeal in Drake v Gray [1936] Ch 451. Slesser LJ said, ‘I recognise and I accept entirely, what was said by this court in the case of Re Union of London and Smith’s Bank Ltd’s Conveyance, that it must be shown that the benefit was intended to enure to each portion of the land’.

The land to which annexation takes place 6.57 A view to the same effect was expressed by Cozens-Hardy MR in Reid v Bickerstaff.97 ‘If on a sale of part of an estate the purchaser covenants with the vendor, his heirs and assigns, not to deal with the purchased property in a particular way, a subsequent purchaser of part of the estate does not take the benefit of the covenant unless (a) he is an express assignee of the covenant, as distinct from assignee of the land or (b) the restrictive covenant is expressed to be for the benefit and protection of the particular parcel purchased by the subsequent purchaser.’ 6.54 The problem with the case of annexation now being considered is that there is no express indication of an intention either that the benefit is intended to enure to each purchaser of part only of the benefited land or, as in Marquess of Zetland v Driver98 and Roake v Chadha,99 that it is not intended to do so, and the question arises, in such a case, as to what the presumption is.100 The extracts cited above strongly suggest that an intention that the covenant should benefit a severed part of the land should be specifically spelt out. 6.55 None of the above cases was directly concerned with the consequences of not doing so. However, prior to the decision in Federated Homes Ltd v Mill Lodge Properties Ltd,101 the courts before whom this issue had directly arisen had all spoken with one voice, holding that annexation expressed to be to an area of land as a single entity without words of severance was presumed to limit enforceability to the owner or joint owners for the time being of the whole of the benefited land unless, as a matter of construction of the covenant (construed in the light of the surrounding circumstances at the time the covenant was entered into), there was an indication to the contrary. 6.56 In order to state the present law on this issue, it is proposed first to consider the effect of the pre-Federated Homes cases where the decisions were directly concerned with the consequences of the absence of express words of severance and then to consider how far, if at all, this effect has been altered by the Federated Homes case.

Pre-Federated Homes cases Drake v Gray102 6.57 This is the first case in which the issue directly arose, where it was held, on the true construction of words of covenant contained in each of four deeds

97 98 99 100

[1909] 2 Ch 305, at pp 319–320. [1939] Ch 1, CA. [1984] 1 WLR 40. In relation to the benefit of a lessee’s covenants which have reference to the lease or the reversion, the matter is specifically provided for by s 141(1) of the Law of Property Act 1925 which provides that such covenants ‘shall be annexed and incident to and shall go with the reversionary estate in the land, or in any part thereof, immediately expectant on the term granted by the lease, notwithstanding severance of that reversionary estate, and without prejudice to any liability affecting a covenantor or his estate’. 101 [1980] 1 WLR 594, CA. 102 [1936] Ch 451, CA.

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6.58  Subsequent owners & occupiers of benefited land: (a) annexation of partition executed in 1922 (under which freehold land at Littlestone-on-Sea, Romney Marsh, Kent was partitioned between three sons and two daughters of H-T Tubbs, deceased), that annexation of the benefit of restrictive covenants had been effected so that such benefit enured to the owner at any time of any part, however small, of the partitioned lands.103 Slesser LJ ‘accepted entirely’ Romer LJ’s statement of the law in Re Union of London and Smith’s Bank Ltd’s Conveyance104 (Romer LJ also being a member of the Court of Appeal in the instant case) and all three Lords Justices (the third being Greene LJ) treated the question as being purely one of construction as between the alternatives of annexation to the benefited land as a whole or annexation to the benefited land and each and every part.105

Russell v Archdale106 6.58 In this case, Buckley J held that a restrictive covenant contained in a conveyance executed in 1938 and expressed to be made with intent ‘to benefit and protect the vendor’s adjoining and neighbouring land’ was annexed to the land as a whole which, on the evidence, the vendor was shown to own at the date of the conveyance with the result that the claimants, having acquired part only of such land, could not claim the benefit of the covenant by virtue of such annexation.107 In so holding, Buckley J proceeded on the premise that in the absence of suitable words of severance, the parties must be presumed to intend annexation to the land as a whole and not to any fragmented part of the benefited land. This decision was followed by Goulding J in Griffiths v Band,108 where the description of the benefited land was identical except that the plural ‘lands’ was used.

Re Jeffs’ Transfer (No 2)109 6.59 The consequences, if, in the absence of a clear intention to that end, annexation were treated as applying to fragmented parts of the benefited land, were pointed out by Stamp J in this case. The facts were as follows.110 103 The case is therefore more directly relevant to Case 4 which is considered below, paras 6.83–6.84. 104 [1933] Ch 611. 105 Or, as Greene LJ put it in Drake v Gray [1936] Ch 451: ‘The question is whether, on the true construction of that conveyance, the benefit of a restrictive covenant is annexed to the whole of the land in question, or only to the land as a whole’. 106 [1964] Ch 38 (Buckley J). 107 Although the covenant was entered into after 1925, s 78(1) of the Law of Property Act 1925 was not cited. Had it been, then the case would have been on all fours with decision in Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594, CA. In fact, the claimants in Russell v Archdale succeeded by virtue of the existence of an express assignment in their favour of the benefit of the covenant. But the judgment on the annexation point (in so far as it was based upon a point of law as opposed to mere construction) was given after full argument and in view of this, whilst not being part of the ratio decidendi (since the decision on the annexation point did not support the judgment in favour of the claimants), the authority of the case on the annexation point would appear to stand close to it in weight: see the observations of Megarry J in Brunner v Greenslade [1971] Ch 993, at p 1003A. 108 (1974) 29 P&CR 243. 109 [1966] 1 WLR 841. 110 Further details relating to the background facts appear in the (otherwise unrelated) decision in Re Gadd’s Land Transfer [1966] Ch 56 (Buckley J).

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The land to which annexation takes place 6.60 In 1928, Cameron Jeffs, purchased and became the registered proprietor of the Chorleywood Estate (Loudwater) comprising some 135 acres. He prepared a layout plan showing new roads with plots adjoining which he proposed to sell to individual purchasers. Prior to the date of the transfer next referred to, plots had been sold off to some 70 purchasers. By a transfer of May 1939, Cameron Jeffs transferred a plot to Alfred Frankel, the predecessor in title of the claimant. In the transfer, Alfred Frankel covenanted ‘with the vendor … for the benefit of the remainder of the Chorleywood Estate (Loudwater) belonging to the vendor to observe and perform the restrictive conditions and stipulations specified …’ in schedule 2 thereto (‘the covenant’). Paragraph 12 of this schedule, after setting out various restrictions concerning building and user, expressly provided that nothing therein contained should be ‘deemed to create a building scheme for the said estate or any part thereof’. Thereafter, further plots were sold, including those now owned by the defendants, but the transfers of those plots contained no express assignment of the benefit of the covenant entered into by Alfred Frankel (or by any other prior purchaser). In 1957, the unsold part of the estate was transferred to Loudwater (Troutstream) Estate Ltd and at the same time, the benefit of the restrictions entered into by the various purchasers was expressly assigned to that company.111 6.60 On the above facts, the question was whether the owners of plots which were sold off by the owner of the estate subsequently to the sale of the claimant’s plot could claim the benefit of the covenant on the ground that they were the successors in title of land to which the benefit of the covenant had been annexed. The defendants argued that since it was clear from the background facts that the owner of the estate intended to sell it off piecemeal to various individual purchasers, it must have been the intention that the words ‘for the benefit of the remainder of the Chorleywood Estate (Loudwater)’ were intended to annex the benefit of the covenant in a way which would pass on such benefit to the individual purchasers. But Stamp J, in dealing with this argument, said:112 ‘… if, as [counsel for the defendants] contends, the covenants entered into by Frankel are enforceable by subsequent purchasers, an absurdity is produced, for Frankel and any other purchasers could enforce the covenants entered into on sales made prior to their own purchases but could not enforce them against purchasers who purchased subsequently to their purchases. Nevertheless, Frankel would be liable to be proceeded against by the very person against whom he would have no remedy. It strains my credulity … to suppose that the parties intended so Gilbertian a situation … I would, if necessary, decide the case on that ground alone, but there are other considerations which lead me to the same conclusion.’ 111 The question of the right of the company to enforce the restrictions was not in issue in the case, it being common ground that it had that right by virtue of an express assignment ‘or some other reason’: see [1966] 1 All ER 937, at 939A (not reproduced in the WLR report). The company was the owner of part only of the land to which the benefit of the covenant was held to be annexed as a whole and the issue of whether, in such circumstances, there can be an express assignment of the benefit to such an owner was not before the court. See further, on this point, below, para 6.71. 112 Re Jeffs’ Transfer (No 2) [1966] 1 WLR 841, at p 848 A-C.

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6.61  Subsequent owners & occupiers of benefited land: (a) annexation 6.61 Stamp J went on to supplement the above reductio ad absurdum reasoning by pointing out that there were provisions in paragraph 12 of schedule 2 to the transfer which showed that where the draftsman intended to refer to the estate ‘or any part’ thereof, then he knew how to do it with the result that it seemed to his Lordship ‘difficult to suppose that if he had intended the benefit of the covenant to be annexed to the whole or any part of the remainder of the estate in the operative part of the conveyance (sic), he would not have said so, but the words “… or any part of the remainder of the said estate …” are not there’.113

Re Selwyn’s Conveyance114 6.62 Here a covenant entered into in 1924 expressed to be intended to ‘enure for the protection of the adjoining or neighbouring land part of or lately part of the Selwyn estate in the parish of Richmond’ was held by Goff J to refer to the land in question and every part thereof. Whilst the owners of land which was no longer part of the Selwyn estate could not benefit from the covenant (since there was no building scheme and those owners were neither parties to the covenant nor persons falling within the scope of section 5 of the Real Property Act 1845115) and the purported annexation was therefore ineffective as regards that land, this did not prevent the attempt to include this land as benefited land from indicating an intention to benefit more than one owner and thus to establish, as a matter of construction, an overall intention that the annexation was not to the land as a whole but to the land or any part thereof. 6.63 In arriving at this decision, Goff J accepted that the consequences referred to by Stamp J in Re Jeffs’ Transfer (No 2) as ‘Gilbertian’116 would result, and that such consequences might be ‘rather fortuitous’ but added,117 ‘This, however, is inherent in any covenant expressed in terms to be for the whole or part and, as such covenants are by no means extraordinary or unusual, nor were they as far as I know in 1922, I do not feel that this is a very material consideration.’

Stilwell v Blackman118 6.64 On the issue of the underlying principle relating to severability, this case does not carry the position any further since the argument and judgment proceeded on the basis that the words used effected annexation only to the benefited land as a unit and not to part only of such land. The covenant in question was one contained in a conveyance executed in November 1955 whereby the purchaser ‘with intent … to benefit and protect the adjoining property of the vendor’ covenanted ‘with the vendor’ to observe and perform certain stipulations and restrictions. On the basis of these words, the annexation was treated as nonseverable although the claimant (who had originally purchased all the adjoining 113 In this case also, although the covenant was entered into after 1925, no reference was made to s 78(1) of the Law of Property Act 1925. 114 [1967] Ch 674 (Goff J). 115 As to which, see above, para 3.3. 116 See above, para 6.60. 117 Re Jeffs’ Transfer (No 2) [1966] 1 WLR 841, at p 689G. 118 [1968] Ch 508 (Ungoed-Thomas J).

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The land to which annexation takes place 6.67 property of the vendor but had afterwards sold part of it) succeeded as an express assignee from the vendor of the benefit of the covenant.119

The position after Federated Homes Ltd v Mill Lodge Properties Ltd120 6.65 The covenant in the Federated Homes case was contained in a conveyance executed in February 1971. The express words of covenant were the bare words ‘The Purchaser hereby covenants with the Vendor that …’ It was clear, however, that the covenant related to land of the vendor company which it retained, and accordingly, the words of covenant were supplemented, under section 78(1) of the Law of Property Act 1925, by the addition of the words (after ‘the Vendor’) ‘and his successors in title and the persons deriving title under him or them’. As has already been seen, these words were held sufficient to bring about annexation to the vendor’s retained land but although the claimant was in fact the successor in title of the vendor in respect of the whole of the vendor’s retained land which was intended to be benefited,121 part of that land was treated as the subject of a claim for separate relief.122 The question therefore arose whether the statutory words of annexation brought about annexation to that part. 6.66 Consistently with the approach adopted in all the above cases, this question could have been treated as one of construction dependent upon whether the statutory words referred only to the ‘land of the covenantee’ as an integral whole or whether those words could be treated as referring to such land or any part or parts thereof. On the basis of such an approach, there would appear to be a close analogy in principle between the formula used in section 78(1) and that used by the parties to the covenant in Drake v Gray,123 with the result that (as assumed, but not considered, in Williams v Unit Construction Co Ltd124) annexation is thereby positively effected to individual parts of the benefited land. 6.67 Brightman LJ did in fact base his judgment on the point partly on this approach, citing certain observations of Romer LJ in Drake v Gray, but both Brightman and Megaw LJJ were impressed by the views expressed in the 4th edition of Megarry and Wade’s Law of Real Property125 that ‘the rule that presumes annexation to the whole only is arbitrary and inconvenient. In principle, it conflicts with the rule for assignments, which allows a benefit annexed to the whole to be assigned with part, and it also conflicts with the corresponding rule for easements’. After citing the above passage, Brightman LJ said:126 119 For a consideration of further aspects of this case, see below, para 6.71. It may be noted that although the covenant was entered into after 1925, s 78(1) of the Law of Property Act 1925 (which, on the basis of the Federated Homes case, would have brought about annexation to separate parts of the benefited land) was not cited. 120 [1980] 1 WLR 594. The facts and decision in this case are set out at length above, at para 6.31 et seq. It is considered here solely in the context of when annexation is severable. 121 See p 599E. 122 See above, footnote 59. 123 [1936] Ch 451, CA. 124 (1955) 19 Conv (NS) 262, CA. 125 Sweet & Maxwell (1975) at p 763. 126 Federated Homes [1980] 1 WLR 594, at p 606G.

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6.68  Subsequent owners & occupiers of benefited land: (a) annexation ‘I find the idea of the annexation of a covenant to the whole of the land but not to a part of it a difficult conception fully to grasp. I can understand that a covenantee may expressly or by necessary implication retain the benefit of a covenant wholly under his own control, so that the benefit will not pass unless the covenantee chooses to assign; but I would have thought, if the benefit of a covenant is, on a proper construction of a document, annexed to the land, prima facie it is annexed to every part thereof, unless the contrary clearly appears. It is difficult to see how this court can have reached its decision in Williams v Unit Construction Co Ltd127 unless this is right. The covenant was, by inference, annexed to every part of the land and not merely to the whole, because it will be recalled that the plaintiff [claimant] was a tenant of only one of the four houses which had the benefit of the covenant.’ Further, Megaw LJ said:128 ‘For myself, I would regard the observations made in the passage which Brightman LJ read from Megarry and Wade as being powerful reasons, and I find great difficulty in understanding how, either as a matter of principle, or as a matter of practical good sense in relation to a legal relationship of this sort, it can be said that a covenant, which ex hypothesi has been annexed to the land as a whole, is somehow or other not annexed to the individual parts of that land.’ 6.68 As indicated above, the actual decision on this point appears to have been founded on the true construction and effect of section 78(1) of the Law of Property Act 1925. Further, the above observations are couched in language which are dismissive of the suggestion that there is, in any event, any problem concerning annexation to parts of the land, rather than as separate grounds for the decision. Had the observations been intended to form part of the ratio decidendi, then it would have been expected that the judgments would have specifically overruled the earlier decisions at first instance referred to above and to have given particular attention to the decision in Russell v Archdale (which was affirmed by the Court of Appeal129) in so far as such decisions clearly proceeded upon the existence of a presumption that, in the absence of an indication to the contrary, annexation is presumed to be to the land as a single unit only, and would have specifically disapproved the observations to that effect of Romer LJ in Re Union of London and Smith’s Bank Ltd’s Conveyance cited above130 which were adopted in their entirety and applied by Slesser LJ in Drake v Gray.131 It is accordingly considered that the above observations were obiter only.132

127 (1955) 19 Conv (NS) 262, CA. 128 Federated Homes [1980] 1 WLR 594, at p 608B. 129 (1962) 185 Estates Gazette 913. However, the main point argued on appeal (by the appellant in person) was whether there had been acquiescence in respect of the breach. As to acquiesence, see para 13.122 et seq below. 130 See above, para 6.53. 131 See above, para 6.57. 132 In J Sainsbury plc v Enfield London Borough Council [1989] 1 WLR 590, counsel for the claimants appears to have treated the observations on this point in the Federated Homes case as binding on, or alternatively unlikely to be rejected by, the judge at first instance since the point that the covenant was annexed to the whole of the retained land and not to each and every part was not taken before Morritt J but merely reserved for argument on any appeal.

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The land to which annexation takes place 6.71 Nevertheless, since those observations were not confined to cases of annexation effected under section 78(1) of the Law of Property Act 1925, their general effect, if adopted in future cases, is to substitute for the presumption of annexation to the land as a whole but excluding any smaller part, unless the contrary appears, a presumption of annexation to the land and each and every part thereof, unless the contrary ‘clearly’ appears. 6.69 The approach of the Court of Appeal in Federated Homes Ltd on this point is open to criticism. For the presumption adopted in the pre-Federated Homes cases to be displaced, one would have expected good reasons to have to be shown for doing so. The reasons which have been put forward are as follows: (a) the presumption conflicts with the rule for assignments which allows a benefit annexed to the whole to be assigned with part (as described in Megarry and Wade, 4th edn, which was referred to); (b) the presumption conflicts with the corresponding rule for easements (Megarry and Wade, 4th edn); (c) the presumption is conceptually difficult to grasp and runs counter to the decision in Williams v Unit Construction Co Ltd (Brightman LJ); (d) the presumption is difficult to understand either as a matter of principle or as a matter of practical good sense (Megaw LJ). 6.70 As to (a), annexation and assignment are alternative methods by which the benefit of a restrictive covenant may be passed on to a successor in title of the benefited land. Whilst certain requirements are common to both (in particular, that the covenant must touch and concern the land acquired by the successor), there are several important differences including the rules relating to the admission of extrinsic evidence to identify the benefited land133 (where the rule is more restrictive in the case of annexation) and the relevance of knowledge of the existence of the covenant on the part of the owner of the benefited land134 (where the rule is more liberal in the case of annexation). The instant difference is a further example. 6.71 There is accordingly no doubt that the rules of annexation are different from the rules of express assignment. However, it does not follow that because they are different, they therefore conflict. They are simply two independent methods by either of which (according to the circumstances) the benefit of a restrictive covenant may pass to a successor and, as Ungoed-Thomas J held in Stilwell v Blackman,135 the fact that the benefit cannot pass under one method (annexation) is no reason for treating it as incapable of passing under another method (express assignment) – unless there is something in the covenant to show that one method only was intended to apply. In the last-mentioned case, Ungoed-Thomas J expressed the position thus:136 ‘… annexation of the benefit to the whole estate does not necessarily preclude on principle an express assignment of the benefit to the purchaser of part of

133 Compare Re Union of London and Smith’s Bank Ltd’s Conveyance [1933] Ch 611 with Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd [1952] Ch 286. 134 See Rogers v Hosegood [1900] 2 Ch 388, per Collins LJ at pp 407–408. 135 [1968] Ch 508. 136 [1968] Ch 508, at 527B.

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6.72  Subsequent owners & occupiers of benefited land: (a) annexation the estate; it seems to me to be a question of construction of each covenant and the provision for its assignment, whether the sole method of assignment is to be by the passing of the whole estate to which the benefit of the covenant is annexed.’ The fact that annexation to the whole did not preclude express assignment to a purchaser of a part illustrates the application of two separate and distinct but compatible presumptions, namely the presumption against the automatic passing of the benefit to such a purchaser and the presumption that the benefit of a covenant is freely assignable by express action unless the contrary appears. The decisions in Russell v Archdale137 and Stilwell v Blackman138 are examples of the parallel application of these presumptions.139 6.72 As to (b), whilst in a number of respects the law relating to restrictive covenants has adopted the corresponding rules relating to negative easements, this has by no means universally been the case.140 In the present context, the rule that an easement is presumed to accommodate each and every part of the dominant tenement which is capable of benefiting derives from the character of an easement as being ‘appurtenant’ to land, that is being deemed to attach to the physical land itself. This is a characteristic not shared by restrictive covenants141 whose breadth of attachment to the land and transmissibility is dependent upon the intention of the parties subject to the maximum which the law allows. Prima facie, therefore, it is for the terms of the covenant to spell out that intention and not for the law to presume an intention to invoke the maximum which the law allows unless there is a contrary intent. 6.73 As to (c) (conceptually difficult to grasp and inconsistent with Williams v Unit Construction Co Ltd), the difficulty appears to lie in a blurring of the distinction between a fragmentation of the covenant and a fragmentation of the land. If the benefit of a covenant relating to an area of land is whole and indivisible (this being the initial premise applicable to covenants at common law142), this does not mean that the benefit cannot be enjoyed as an entity in relation to the land or to any single smaller area. But it does mean that the covenant will not be automatically split up on the subdivision of the land and converted into as many separate covenants as there are separate pieces of land. In the context of annexation to land as a single entity, it is clear that the agreement between the parties is that so far as automatic succession to the benefit of the covenant is concerned, the covenant will not pass except to a person who acquires the whole

137 [1964] Ch 38 (Buckley J). Although in this case, as pointed out by Ungoed-Thomas J in Stilwell v Blackman [1968] Ch 508, at p 527, the question was never debated whether the annexation of the benefit to the whole estate precluded an express assignment of the benefit to the purchaser of part of the estate. The point therefore went sub silentio. 138 Stilwell v Blackman [1968] Ch 508. 139 The rules of law emanating from these decisions are further considered in Chapter 7. The forms of covenant in Marquess of Zetland v Driver [1939] Ch 1 and Roake v Chadba [1984] 1 WLR 40 each provide examples of express exclusion of automatic passing of the benefit and express inclusion of the right to make an assignment the benefit. In the end, it is a question of what the presumption should be; cf the different rules in this respect of common law and equity concerning whether a covenant can be split up and parts of it separately assigned: see the observations of Ungoed-Thomas J in Stilwell v Blackman, ibid, at 521G. 140 See above, paras 1.7–1.8. 141 See, however, Kumar v Dunning [1989] QB 193, CA where the question whether a covenant could be said to ‘appertain’ to land within the meaning of s 62(1) of the Law of Property Act 1925 was mooted. And see, further, below at para 7.31. 142 See above, para 16.51 et seq.

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The land to which annexation takes place 6.75 of the benefited land. Accordingly, if the benefited land is fragmented, there can be no automatic fragmentation of the covenant. On the other hand, there is no reason why the covenant should not continue to benefit any part or parts of the land if the covenant is expressly dealt with in that way. On a sale of part of the land, the benefit of the covenant could either be retained by the vendor for the benefit of his retained land to the exclusion of the land sold143 or expressly assigned to the purchaser either as a whole (to the exclusion of the retained land) or by severing the benefit as between the land retained and the land sold.144 In this sense, therefore, a covenant which is annexed to the land as a whole remains capable of benefiting any part. So far as the decision in Williams v Unit Construction Ltd145 is concerned it has already been pointed out above that this was a decision on the effect of the words imported into covenants by section 78(1) of the Law of Property Act 1925 and that those words are consistent with effecting annexation to the benefited land and every part thereof.146 6.74 As to (d) (difficult to understand either as a matter of principle or as a matter of practical good sense) in referring to the matter of principle, Megaw LJ was apparently endorsing the criticism of the pre-Federated Homes presumption made by Megarry and Wade to which reference has already been made above. But apart from the validity or otherwise of that criticism, there would appear to be sound reasons as a matter of principle for upholding that presumption. In this connection, it has never been suggested147 that it is not open to the parties to agree that the benefit of a covenant shall only be capable of passing automatically to a successor in title of the whole of the land; accordingly, this is not the principle which is involved. The principle involved is whether there should be (a) a presumption to that effect unless the contrary appears or (b) a presumption that the benefit of the covenant can be automatically split up into as many separate choses in action as there are persons from time to time interested in different parts of the land, unless the contrary appears. 6.75 As has been seen, prima facie the benefit of a chose in action (such as the benefit of a covenant148) is whole and indivisible, except that in equity the benefit of a restrictive covenant may (unless a contrary intention appears) be split up by express assignment.149 If part of the benefited land is disposed of and the benefit of the covenant is expressly assigned, then that assignment will, in the context, no doubt be treated as an assignment of the corresponding part (but not the whole) of the chose in action. The intention of the parties is made clear as a result of the combination of the initial presumption of what can be done and the circumstances surrounding what is actually done on the subsequent disposal. If and only if annexation is invoked can there be any automatic passing of the benefit. Whether annexation is invoked is a question of intention as disclosed by the wording of the covenant.

143 144 145 146 147

As in Stilwell v Blackman [1968] Ch 508 (Ungoed-Thomas J). As in Russell v Archdale [1964] Ch 38 (Buckley J). (1955) 19 Conv (NS) 262, CA. See above, para 6.67. Apart from the argument in Roake v Chadha [1984] 1 WLR 40, referred to above, para 6.42, where s 78(1) of the Law of Property Act 1925 applies. 148 See H W Elphinstone, ‘What is a Chose in Action?’ (1893) 9 LQR 311. 149 See above, para 6.51.

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6.76  Subsequent owners & occupiers of benefited land: (a) annexation Given that annexation may be either to the whole as a whole, or to the whole or any part or parts and given the fundamental difference between the two in either preserving the integrity of the covenant as a single chose in action or permitting it to be split up into an indefinite number of subdivided choses in action, the question which of the two results is produced must be a question of intention. Since the second of the above alternatives is much wider than the first, the onus must be upon the party seeking to establish it to show a sufficiently clear-cut intention. If the covenant is expressed to be made for the benefit of a specified area of land without more. then it would, in the circumstances, seem more reasonable, as a matter of principle, to imply the words ‘but not for the benefit of any separate part of such land’ than to imply the words ‘or, on severance of the land, for the benefit of each severed part’.150 Of course, whilst the land remains unsevered, the benefit clearly does operate for the benefit of each and every part of the land as already mentioned above. 6.76 Further, so far as practical good sense is concerned, as appears from the ‘Gilbertian situation’ to which Stamp J refers in Re Jeffs’ Transfer (No 2),151 it can often make practical good sense for the benefit of a covenant not to be split up on each subsequent sale off of a part of the benefited land, particularly in the case of the systematic sale of land in lots to which (as a result of express provision or on the facts) no building scheme applies. As between the two competing presumptions which are in contention, the fact is that the pre-Federated Homes presumption will have been the basis upon which draftsmen framed and interpreted the effect of covenants over a period of nearly half a century, between the decision in Re Union of London and Smith’s Bank Ltd’s Conveyance152 in 1933 and the decision in the Federated Homes case in 1980, and even if (which would appear to be by no means clear) the balance of the arguments were, if the matter was one of first impression, thought to be in favour of the more recently suggested presumption, yet where there is found to be a consistent body of judicial authority over a lengthy period which has favoured the opposite presumption, and on the faith of which many properties must have changed hands (and many indemnity insurance policies issued!) it should require something much more than the balance of arguments as a matter of principle retrospectively to revive covenants thought to have been unenforceable. 6.77 However, in Hugh Small v Oliver & Saunders (Developments) Ltd,153 in relation to a 1925 covenant, Mr Mark Herbert QC sitting as a deputy High Court judge referred to the passages from Brightman LJ and Megaw LJ set out above154 and applied them, saying in para 30: ‘I read those as statements of principle that, in the absence of a clear contrary indication, annexation to identified land of the vendor, whether statutory or express, enures for the benefit of every part of the land.’

150 The opposite approach appears, however, to have been adopted by Browne-Wilkinson V-C in Allen v Veranne Builders Ltd [1988] NPC 11, although there a building scheme was also found to exist. 151 [1966] 1 WLR 841 at p 848, and see above, para 6.60. 152 [1933] Ch 611, CA. 153 [2006] EWHC 1293 (Ch). 154 See para 6.67 above.

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The land to which annexation takes place 6.80 Although the introduction of such a presumption may be said to represent a simplification of the position, as well as being questionable based on the law as laid down in previous cases, none of which have actually been overruled, this may seem somewhat unjust in that those dealing with pre-1926 covenants may reasonably be supposed them to have been based on the often quoted observations of Hall V-C in Renals v Cowlishaw referred to above155 and to have assumed that the pre-Federated Homes presumption would apply. 6.78 Post-1925 draftsmen will, however, have had their drafting supplemented156 by the provisions of section 78(1) of the Law of Property Act 1925 the language of which appears to have been regarded in the Federated Homes case157 as sufficient, without the aid of the ‘alternative presumption’, to bring about annexation to the whole or any severed part or parts.158 The decision in Federated Homes seems likely to be taken to now represent the law in relation to this aspect of the matter.

Annexation to any part of the land ‘unless the contrary clearly appears’ 6.79 Brightman LJ in Federated Homes made clear in the passage quoted at para 6.67 above159 that section 78 of the Law of Property Act 1925 meant that the benefit of covenants annexed to the land were to be taken prima facie to be annexed to every part thereof ‘unless the contrary clearly appears’. 6.80 There may be good reason for it to be agreed to the contrary. In Crest Nicholson Residential (South) Ltd,160 Chadwick LJ, for the court, said: ‘… a developer who is selling off land in lots might well want to retain the benefit of a building restriction under his own control. Where … development land is sold off in plots without imposing a building scheme, it seems to me very likely that the developer will wish to retain exclusive power to give or withhold consent to a modification or relaxation of a restriction on building which he imposes on each purchaser; unfettered by the need to obtain the consent of every subsequent purchaser to whom (after imposing the covenant) he has sold off other plots on the development land. I can see no reason why, if original covenantor and covenantee make clear their mutual intention in that respect, the legislature should wish to prevent effect being given to that intention.’

155 See above, para 6.52. In the case of the covenants in Rogers v Hosegood [1900] 2 Ch 388 which were entered into in 1869, Farwell J at first instance observed, at p 397: ‘The draftsman would appear to have had the words of Hall V-C before him when he framed this covenant, and I think it would be difficult to express the intention in clearer words.’ 156 Unless there was an express indication to the contrary contained in the covenant: see Roake v Chadha [1984] 1 WLR 40. 157 And tacitly in Williams v Unit Construction Co Ltd (1955) 19 Conv (NS) 262, CA. 158 As to which see above, para 6.67. The section could have been, but was not, relied upon in each of the decisions in Russell v Archdale [1964] Ch 38, Re Jeffs’ Transfer (No 2) [1966] 1 WLR 841 and Stilwell v Blackman [1968] Ch 508. 159 At P606G-H of the judgment. 160 [2004] 1 WLR 2409, at para 41.

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6.81  Subsequent owners & occupiers of benefited land: (a) annexation 6.81 In Sugarman v Porter,161 Peter Smith J, applying Marquess of Zetland and Crest, held that where a covenant is said to benefit the land of the vendor that remains unsold from time to time the effect is to annex the covenant to that land for the period in which the land remains unsold. Upon the sale of the land the covenant is not annexed and will only pass if there is an express assignment. The plain wording of the conveyance was held to be ‘a sufficient contrary intention’ to displace statutory annexation by reason of section 78. 6.82 In Site Developments (Ferndown) Ltd v Cuthbury Ltd162 a conveyance in 1926 contained restrictive covenants ‘with the Vendor and his successors in Title the owner or owners for the time being of the Canford Estate of which the land hereby transferred and conveyed forms part’. At the time, the estate covered several miles outside Poole, Dorset. There had been large numbers of transfers made of parts of it since then. Vos J found that it could not have been intended that covenants made in favour of the Estate could be enforced by every transferee of land from the Estate, however small or insignificant the parcel the transferee acquired. The remaining Estate still existed and could enforce or release the covenants as it chose, but it would be absurd to think each transferee of a part was in the circumstances intended to acquire the benefit of the covenants. Accordingly, it was not annexed to each part of the land in the way described in Federated Homes, as the contrary did clearly appear.

Case 4 6.83 As in Case 3 except that the covenant is annexed to the land and (in terms) to each and every part thereof. This was the situation in Rogers v Hosegood163 and represents annexation at its most comprehensive. In that case, in a conveyance executed in 1869 of a plot forming part of a site in Palace Gate which had been laid out in a number of plots, the purchaser covenanted with the vendors their heirs and assigns ‘with intent that the covenants thereinafter on his behalf contained … might enure to the benefit of [the vendors], their heirs and assigns and others claiming under them to all or any of their lands adjoining or near to the said premises’. Later, in 1872, the vendors sold another plot to the predecessor in title of the claimants who, when they purchased, were unaware of the existence of the covenant contained in the 1869 conveyance. Farwell J and the Court of Appeal held that the benefit of the covenant ran with the claimants’ plot and entitled them to an injunction to enforce the covenant. In the course of delivering the judgment of the Court of Appeal, Collins LJ said:164 ‘But when, as here, it has been once annexed to the land reserved, then … the presumption must be that it passes on a sale of that land, unless there is something to rebut it, and the purchaser’s ignorance of the existence of the covenant does not defeat the presumption.’

161 162 163 164

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[2006] 2 P&CR 14. [2010] EWHC 10 (Ch). [1900] 2 Ch 388, CA. Ibid, at p 408.

The land to which annexation takes place 6.86 6.84 Accordingly, this form of annexation undoubtedly gives rise to a rebuttable presumption that on every subsequent disposition of the benefited land or any part thereof, the benefit of the covenant or (as the case may be) a severed part of such benefit will pass with that land into the hands of subsequent owners165 without express mention. Unless the presumption is rebutted, the benefit of the covenant appears to attach, not to any particular estate or interest in the land,166 but to the physical land itself, in a similar way to that in which the benefit of an easement has, since the earliest times, been regarded as attaching to the soil of the land167 so as automatically to pass with the land into the hands of any owner or occupier of any part of the dominant land. ‘It is in the nature of an easement attached to his property as the dominant tenement.’168

Case 5 6.85 The covenant touches and concerns the land but is expressed to be annexed only in a limited way – for example, it is provided that it is annexed to such part of the identified land as remains unsold or shall be sold by the vendor or his successors in title with the express benefit of the covenant. This was the position in Marquess of Zetland v Driver,169 where clause 2 of the conveyance provided: ‘The purchaser to the intent and so as to bind as far as practicable the said property “hereby conveyed into whosesoever hands the same may come and to benefit and protect such part or parts of the lands in the Borough Township or Parish of Redcar in the North Riding of the County of York, now subject to the settlement (a) as shall for the time being remain unsold or (b) as shall be sold by the vendor or his successors in title with the express benefit of this covenant, covenants with the vendor that the purchaser will at all times observe, perform and keep the said stipulations contained in the Second Schedule hereto.” It was held by the Court of Appeal to effect annexation in the terms set out and, on the death of the vendor, the covenant was able to be enforced by his successor. See also the cases referred to at paras 1.43–1.45 above. 6.86 In Crest Nicholson Residential (South) Limited v McAllister,170 the land benefited was indicated to be ‘the property at Claygate aforesaid belonging [to the covenantee] or the part thereof for the time being remaining unsold’. In the context of development land being sold off in plots without imposing a building scheme, where the developer was likely to want to retain exclusive power to give or withhold consent to any modification or relaxation of a building restriction

165 As to the precise nature of the interest which must be owned to entitle the ‘owner’ to enforce the covenant, see above, para 1.51. 166 Contrast the definition, for the purposes of s 80 of the Law of Property Act 1925, of a covenant which ‘runs with the land’ in s 80(4) of the Act. 167 See Bracton De Legibus Angliae. 168 Per Cozens-Hardy MR in Reid v Bickerstaff [1909] 2 Ch 305, at p 320. 169 [1939] Ch 1. 170 [2004] 1 WLR 2409.

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6.87  Subsequent owners & occupiers of benefited land: (a) annexation imposed by him on each purchaser without the need to obtain the consent of every subsequent purchaser to whom (after imposing the covenant) he had sold off other plots171 it was held that the wording meant that the defendant’s land which had subsequently been sold by the covenantee did not have the benefit of the covenant. 6.87 In Sugarman v Porter,172 Peter Smith J, applying Marquess of Zetland and Crest, held that where a covenant is said to benefit the land of the vendor that remains unsold from time to time the effect is to annex the covenant to that land for the period in which the land remains unsold. Upon the sale of the land the covenant was not annexed and would only pass if there is an express assignment. 6.88 Again, in Norwich City College of Further and Higher Education v McQuillin,173 where the covenant was expressed to be ‘for the benefit of the Trafford Estate at Lakenham or the part or parts thereof remaining unsold’, annexation of the benefit of the covenant was held to be limited to so much of the land belonging to the vendor at the date of the conveyance as thereafter continued to be under the ownership of the vendor or his successors in title to the Trafford Estate. Land subsequently sold off from the estate by the original vendor or his successors in title was excluded. This made sense of the words ‘for the time being unsold’, and other indications, including the factual background, also supported the conclusion. 6.89 As this and all the cases emphasise, the true construction of the covenant is what needs to be ascertained, having regard to its context and the circumstances prevailing when it was entered into. In Rees v Peters,174 a covenant by the vendor of land ‘with the Purchasers and their successors in title … for the benefit of the property hereby conveyed, or the part thereof for the time being remaining unsold, and every part thereof’, not to build on a specified part of the retained land without the consent of the purchasers was construed by the Court of Appeal to mean that if the whole was sold the covenant would be enforceable by the purchaser successors in title, but that if just part was sold the covenant would not then apply to that part. In other words, in the particular circumstances of the case, and having regard in particular to the phrase ‘successors in title’ at the start, the words ‘or the part thereof for the time being remaining unsold’ referred to what was to happen if there was a sale only of part – namely, that the covenant was not then to apply to that part.

NEGATING PRE-EXISTING ANNEXATION 6.90 It sometimes happens that the owner of land to which the benefit of restrictive covenants is attached by annexation of the most comprehensive kind (category (4) annexation above) desires to dispose of parts of the benefited land without passing on the benefit of the covenants. The advantage of so doing is that if and when the owner of the burdened land wishes to negotiate for a

171 172 173 174

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As to which, see para 6.80 above. [2006] 2 P&CR 14; see para 6.81 above. [2009] 2 P&CR 22. [2011] 2 P&CR 18.

Negating annexation effected under LPA 1925, s 78(1) 6.93 release or modification of the restrictions, the number of persons involved in the release is confined and, with it, the persons entitled to share in any release consideration. This may be of particular concern when parts of the benefited land are to be leased or dealt with by way of licence since both under the general law175 and (in the case of post-1925 covenants) by the express language of section 78(1) of the Law of Property Act 1925, lessees176 and occupiers177 have a sufficient interest entitling them to enforce restrictive covenants benefiting the leased or licensed land. 6.91 It is clear from the decision of Ungoed-Thomas J in Stilwell v Blackman178 that the fact that the benefit of a restrictive covenant is annexed by express words to the benefited land does not preclude the possibility of the benefit of the covenant being dealt with, either by assignment or retention, in a way which overrides the annexation. Accordingly, where it is desired to retain the benefit, the question arises as to how annexation may be nullified in relation to the land being sold, leased or licensed.179 6.92 If, in the conveyance, lease or other transaction, there is simply a declaration of intent that the benefit of the covenant shall not pass, this may not be regarded as sufficient (though an estoppel might arise). To put the matter beyond doubt, there should sensibly be a formal release of the covenant by the competent owner in relation to the part of the land to be disposed of either absolutely, in the case of a sale, or for the period corresponding with the lease or licence, as the case may be. Further, since both parties will be affected by the release, it would be desirable for it to be contained in a document executed in duplicate, followed up either by a suitable note on the Property Register180 (in the case of registered land) or (otherwise) an endorsement on the title deed bringing about annexation.181

NEGATING ANNEXATION EFFECTED UNDER SECTION 78(1) OF THE LAW OF PROPERTY ACT 1925 6.93 The issue of excluding section 78(1) or negating its effect has already been considered generally above182 and as indicated there, there is nothing in the section which would preclude the negating of annexation effected under the section.

175 See above, para 1.51 (‘non-proprietary occupiers’). 176 See Williams v Unit Construction Co Ltd (1955) 19 Conv (NS) 262. 177 Section 78(1) of the Law of Property Act 1925, second paragraph. 178 [1968] Ch 508. 179 As to whether annexation in a proprietary sense can as a matter of law be annexed so as to vest the benefit in a mere licensee, see the Lands Tribunal case of Re Da Costa’s Application (1986) 52 P&CR 99. 180 Although there is no obligation on the Registrar to enter notes of either the benefit or absence of benefit of covenants: see Cator v Newton [1940] 1 KB 415. 181 Prima facie, this will be the instrument creating the covenant unless it is possible for annexation to be subsequently unilaterally effected, as to which see below, paras 6.94–6.103. 182 See paras 6.42–6.44 above.

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6.94  Subsequent owners & occupiers of benefited land: (a) annexation

CAN ANNEXATION BE EFFECTED AFTER THE CREATION OF THE COVENANT BY THE UNILATERAL ACTION OF THE PERSON ENTITLED TO ITS BENEFIT? 6.94 For this question to arise, it must be pre-supposed that a restrictive covenant has at some stage in the past been entered into for the benefit of the original covenantee’s land but without the requirements for annexation being met at that time (and there being no building scheme). In such a case, the question is whether, on a subsequent disposition of the benefited land (or any part thereof) it is open to the original covenantee or any later owner of the land who has acquired the benefit of the covenant by express assignment, to effect an annexation of the covenant without the covenantor (or other person for the time being subject to the burden of the covenant) taking part. 6.95 In Federated Homes Ltd v Mill Lodge Properties Ltd,183 Mr John Mills QC, sitting as a deputy High Court judge, gave his view in the following terms: ‘“Annexation”, in my judgment, is for the parties to the covenant itself to achieve if they wish to, and (though those parties may no doubt provide for annexation at a later stage) I am not satisfied or prepared to hold that there is any such thing as “delayed annexation by assignment” to which the covenantor is not party or privy.’ 6.96 On appeal, this issue did not arise but the above passage, together with another part of the judgment,184 was cited by Brightman LJ who, without commenting on its validity, added: ‘The reference to “delayed annexation by assignment” is to a proposition that a covenant can, on a later assignment, thereby become annexed to the land by the act of the assignor and the assignee alone.’ 6.97 As a matter of principle, the view (judicially expressed) of Mr John Mills QC would be correct if subsequent annexation would impose an additional burden on the covenantor (or his successor). In order to determine whether it would do so, it is necessary to consider whether there is any actual or potential difference, vis-à-vis the burden, between: (a) a restrictive covenant which is expressed to be entered into with the covenantee simpliciter (and to which section 78(1) of the Law of Property Act 1925 does not apply185), no reference being made to any land of the covenantee but which in fact clearly touches and concerns retained land of the covenantee (Greenacres); and (b) a restrictive covenant which is expressed to be entered into with the covenantee to the intent that it shall enure for the benefit of the covenantee and other the owner or owners of or persons interested in Greenacres or any severed part or parts thereof for the time being and from time to time. If there is no difference in the actual or potential liability of the covenantor (or his successors) as between each of the foregoing covenants, then there is no reason why, without the covenantor’s (or other liable person’s) consent, the

183 [1980] 1 WLR 594. 184 Which is not reported. 185 Either because it is a pre-1926 covenant or because the subsection is effectively negatived.

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Can annexation be effected after the creation of the covenant etc? 6.99 person from time to time entitled to the benefit of a covenant of type (a) should not be entitled to convert it into a covenant of type (b). 6.98 It is clear that under both types of covenant, the benefit is inherently capable of running with the land or any severed part thereof to precisely the same extent in each case. The difference is that whereas in the case of a covenant of type (b) such running will be automatic,186 in the case of a covenant of type (a) it is conditional on the original covenantee or other owner or owners for the time being of the benefited land, making an express assignment of the benefit of the covenant on the occasion (subject to the point now being considered) of any and every disposition of that land or of any part or parts thereof.187 The making of such express assignments is not subject to any requirement of consent from the covenantor, since the presumption in equity is that unless the contrary appears, the benefit of a restrictive covenant can be assigned either as a whole or ‘in pieces’ and ‘to one person after another.188 Since, therefore, a state of equilibrium between a type (a) covenant and a type (b) covenant can be achieved by an unbroken chain of express assignments within the scope of the terms of the type (a) covenant, would the bringing about of this result by invoking (somewhere along the line) a built-in mechanism (annexation) providing a substitute for such a chain of assignments but otherwise producing the same effect, operate to increase the burden of the owner of the burdened land? Prima facie, the route by which maximum enforceability is achieved would be expected to be a matter of indifference to the covenantor and simply to confer choice on the covenantee—and this is consistent with the rules, considered above, relating to annexation of a covenant to land either as a whole or to the severed parts.189 In other words, whether the benefit of the covenant is passed on automatically or by assignment is prima facie a matter in which, on a subsequent disposition, the covenantee and his assignee have an interest but which is not regarded as materially affecting the covenantor. 6.99 If the foregoing analysis is correct, then the view expressed by Mr John Mills QC, referred to above,190 appears, in principle, to be incorrect. Further, that view is contrary to a long and consistent line of dicta by other judges from time to time, of which the following are representative.

186 Rogers v Hosegood [1900] 2 Ch 388, see above, para 6.83. 187 See Chapter 7. 188 Per Romer LJ in Re Union of London and Smith’s Bank Ltd’s Conveyance [1933] Ch 611, at p 630. This presumption arises from the fact that the benefit of restrictive covenant is an equitable interest in land (London and South Western Rly Co v Gomm (1881) 20 ChD 562, and as a property interest, is presumed to be freely alienable: cf Re Button’s Lease [1964] Ch 263 (option presumed to be assignable). 189 See above, para 6.45 et seq. The question whether, where annexation had originally been to the benefited land as a whole, it was open to the covenantee, on a subsequent sale of part, to annex the benefit to a part, was raised in Stilwell v Blackman [1968] Ch 508 but not decided. But it was also held in that case that initial annexation to land as a whole, did not preclude express assignment of the benefit of the covenant on a sale of a part of the land and there seems no sufficient reason, therefore, to treat such form of annexation as excluding the power of the covenantee to do by annexation to part what can be done by a chain of assignments in relation to that part. 190 At para 6.95.

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6.100  Subsequent owners & occupiers of benefited land: (a) annexation In Rogers v Hosegood,191 Collins LJ, delivering the judgment of the Court of Appeal, said: ‘When, as in Renals v Cowlishaw,192 there is no indication in the original conveyance, or in the circumstances attending it, that the burden of the restrictive covenant is imposed for the benefit of the land reserved, or any particular part of it, then it becomes necessary to examine the circumstances under which any part of the land reserved is sold, in order to see whether a benefit, not originally annexed to it, has become annexed to it on the sale, so that the purchaser is deemed to have bought it with the land …’ In Reid v Bickerstaff,193 Cozens-Hardy MR said: ‘The benefit of a covenant capable of being annexed to land, but not expressed to be so annexed, either by the deed containing the covenant or by some subsequent instrument executed by the covenantee, does not pass as an incident of land on a subsequent conveyance.’ In applying this statement to the facts of the case, Cozens-Hardy MR said:194 ‘It is equally plain that there is nothing in the deed [of covenant] of 1840, or in any document prior or subsequent thereto, to indicate that the covenant was entered into for the benefit of the particular parcels of which the plaintiffs [claimants] are now owners.’ 6.100 In Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd,195 Upjohn J asked (in the context of a restrictive covenant previously exacted by Mrs Mardon on selling part of her land and retaining Devonia on which she carried on a business): ‘Mrs Mardon may well have had it in mind that she might want ultimately to sell her land and the business and the benefit of the covenant in such manner as to annex the benefit of the covenant to Devonia for, by so doing, she would get an enhanced price of the totality of the assets she was selling?’ In Stilwell v Blackman,196 Ungoed-Thomas J said: ‘Indeed, in the authorities, covenants are described as being for the benefit of land, whether annexed to it or to enable the covenantees to dispose of it to the best advantage (for example, by the Court of Appeal in Miles v Easter197). And the object of enabling land to be more advantageously disposed of is largely, if not completely, achieved by annexing the covenant to it, as equity itself recognises in permitting a covenantee, where the covenant is not annexed to land, to annex it on his disposing of the land or part of it (see Rogers v Hosegood and Reid v Bickerstaff).’ Later in his judgment he added:198 ‘It seems to me that the person entitled to make the express assignment can pass the benefit of the covenant by annexing it to all or any of the land 191 [1900] 2 Ch 388, at p 408. 192 (1878) 9 ChD 125, affd (1879) 11 ChD 866. 193 [1909] 2 Ch 305, at p 320. 194 Ibid, at p 321. 195 [1952] Ch 286, at p 293. 196 [1968] Ch 508, at p 525A. 197 Ie, Re Union of London and Smith’s Bank Ltd’s Conveyance [1933] Ch 611. 198 Stilwell v Blackman [1968] Ch 508, at p 526F.

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Can annexation be effected after the creation of the covenant etc? 6.104 in connexion with which the covenant could pass, or, alternatively, by an express assignment, and that all succeeding express assignees of the benefit of the covenant could do likewise.’ 6.101 Entirely consistent with the above dicta is the decision of the Court of Appeal in Nalder and Collyer’s Brewery Co Ltd v Harman,199 the material facts of which were as follows. Tancock, the owner of a freehold estate in Croydon, sold and conveyed a small part of it to Drummond (the predecessor in title of the defendant’s landlord). In the conveyance, Drummond covenanted with Tancock his heirs and assigns to observe certain restrictions. Thereafter, Tancock created a building scheme in respect of the remainder of the estate, selling it off in lots. The claimant company was the successor in title of the purchaser of Lot 7. The conveyance by Tancock of that lot contained no express assignment of the benefit of Drummond’s covenant. The claimant company claimed that the benefit of the covenant had passed to it with Lot 7 by virtue of the subsequent creation and operation of the building scheme. The Court of Appeal (which included Collins LJ who, in the previous month, had delivered the judgment of the Court of Appeal in Rogers v Hosegood200) upheld this claim. 6.102 This case accordingly demonstrates that it is open to a covenantee, where  initially there is no mechanism (annexation or building scheme) for ensuring the automatic passing of the benefit of a covenant, afterwards to bring about such automatic passing by creating a building scheme – and clearly, as between the original parties to the covenant, it can make no difference if the same result is produced by subsequent annexation rather than by a building scheme. 6.103 In the light of the foregoing and of the principle considered above, it is considered that unless there is an express or implied indication to the contrary in the instrument containing the covenant, a restrictive covenant which is not initially comprehensively annexed to land must be treated as having been entered into on the footing that the covenantee, or any successor, has power in conjunction with an assignee to effect annexation to any severed parts of the benefited land on the occasion of severance.

On the footing that subsequent annexation can be effected, the means of achieving this 6.104 The most obvious method would be for the parties to the subsequent sale (or other transaction) to provide for the express assignment of the benefit of the covenant and to declare their intent that such covenant shall thereafter enure for the benefit of the land sold and each and every part thereof in the hands of any and every owner thereof or person interested therein from time to time.

199 (1900) 83 LT 257. 200 [1900] 2 Ch 388.

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6.105  Subsequent owners & occupiers of benefited land: (a) annexation It has been suggested that an express assignment in the same document as that which transferred the land would be sufficient without more.201 However, there is no decision to this effect. It is suggested that the question of how annexation is to be effected on assignment is in principle to be answered by reference to the ordinary rules on annexation: (1) is the land benefited by the covenant being assigned identified by the instrument of assignment so as to be easily ascertainable; and (2) are there words in the instrument of assignment which show the covenant is intended to benefit that land, ie subsequent owners of the land not just the immediate assignee? As to these matters, see paras 6.6–6.23 above. 6.105 In relation to the second requirement, section 78 of the Law of Property Act 1925 would not apply so as to import in an instrument, silent on its face, words showing an intention to benefit successors in title, as that only imports such words into a covenant and, at this stage, one is dealing with an assignment, so that express words are required. It would appear to follow that the mere making of an express assignment without words necessary to fulfil these two requirements being fulfilled will not be enough to bring about annexation. 6.106 Such dicta as there are in the cases above point both ways, but they are considered on balance to support this position: (1) In every decided case where the plaintiff has successfully relied upon express assignment as establishing title to the benefit of a restrictive covenant, there has in fact been an unbroken chain of assignments (express and/or by operation of law) through which the covenant has passed from the original covenantee to the claimant.202 (2) There are dicta in Renals v Cowlishaw,203 which suggest an express assignment might in itself be sufficient to achieve annexation: Hall V-C indicated the circumstances in which the unsuccessful claimants in that case who, in 1870, purchased from the devisees of Bainbrigge (Bainbrigge having previously purchased from the covenantees) might have succeeded, in the following terms: ‘If it had appeared in the conveyance to Bainbrigge that there were such restrictive covenants in conveyances already executed, and expressly or otherwise that Bainbrigge was to have the benefit of them, he and the plaintiffs, as claiming through him, would have been entitled to the benefit of them. But there being in the conveyance to Bainbrigge no reference to the existence of such covenants by recital of

201 By Sir Lancelot H Elphinstone Covenants Affecting Land (1946), art 54(2) – but the authority cited – Renals v Cowlishaw (1878) 9 ChD 125, at p 129 – lends only vague support for the suggestion; and also by counsel in Stilwell v Blackman [1968] Ch 508 – commented on by Ungoed-Thomas J. 202 The reported decisions are Lord Northbourne v Johnston & Son [1922] 2 Ch 309; Newton Abbot Co-operative Society Ltd v Williamson and Treadgold [1952] Ch 286, and (in respect of the ‘green land’) Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594. 203 (1878) 9 ChD 125.

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Can annexation be effected after the creation of the covenant etc? 6.106 the conveyances containing them or otherwise, the plaintiffs cannot be treated as entitled to the benefit of them.’204 (3) However, in Re Pinewood Estate, Farnborough,205 Wynn-Parry J reaffirmed the more traditional view that where reliance has to be placed on express assignment, there must be a continuous chain of such assignments. (4) And in Stilwell v Blackman,206 Unged-Thomas J said: ‘It has been suggested that where an express assignment of the benefit of the covenant is made on the passing of the covenantee’s relevant land, the benefit is thereupon, automatically, and thenceforth, annexed to that land, and words used in particular by Hall V-C in Renals v Cowlishaw have been called in aid of this proposition. But again such words were not directed to any issue or argument upon this question, or, indeed, even to the recognition that this question arose. It seems to me that to base such a conclusion upon words so used is in effect to interpret them out of context, and to attach to them a weight which they were never intended to bear.’ (5) More recently, in Federated Homes Ltd v Mill Lodge Properties Ltd,207 the two earlier express assignments (on sales of the benefited land) prior to the transfer to the claimant company (which contained no express assignment) were tacitly treated as ineffective in themselves to pass the benefit to the claimant company in respect of the red land.208 It was not argued, or raised as a point by the Court, that either of the earlier conveyances, which did contain an express assignment, operated to annex the benefit to the red land.

204 205 206 207 208

At pp 130–131. [1958] Ch 280, at p 287. [1968] 1 Ch 508. [1980] 1 WLR 594. For the facts, see para 6.31 above.

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7 Competent claimants: (b) express assignment

ASSIGNABILITY OF RESTRICTIVE COVENANTS 7.1 Provided that a restrictive covenant satisfies the six basic requirements considered in Chapter 1 and summarised at para 1.9 above, the benefit of such a covenant is presumed to be freely assignable unless the contrary appears. In the words of Ungoed-Thomas J in Stilwell v Blackman:1 ‘… the passing of the benefit of a restrictive covenant by express assignment is permitted in accordance with equitable principles without any express provision between the original covenantor and the covenantee for such assignment … So express assignment of the benefit of a restrictive covenant can only be forbidden if it is positively excluded …’ This presumption stems partly from the fact that a restrictive covenant is a chose in action for the benefit of land, and thus assignable at common law,2 and partly from the fact that such a covenant confers an equitable interest in the burdened land3 to which the presumption of free alienability applies.4 In order to give rise to the presumption, it is not necessary to show that the covenant contains any express words showing assignability. 7.2 Further, if the covenant is expressed to be made with the covenantee ‘and his assigns’, this would in any event preclude any argument that the covenant was, on its true construction, intended to be personal to the covenantee.5 In the case of covenants relating to freehold land entered into between 1881 and 1926, such covenants are, by section 58(1) of the Conveyancing Act 1881, ‘deemed to be made with the covenantee, his heirs and assigns, and shall have effect as if heirs and assigns were expressed’, and such covenants entered into after 1925 are, by section 78(1) of the Law of Property Act 1925, ‘deemed to be made with the covenantee and his successors in title and the persons deriving title under him or them, and shall have effect as if such successors and other persons were expressed’. Further, by section 80(3) of the same Act, such covenants ‘may be made to run with the land without the use of any technical expression’.

1 [1968] Ch 508, at pp 524–525. 2 See Pakenham’s Case (1368) Y B 42 Edw 3 fo 3 pl 14; Sharp v Waterhouse (1857) 7 E&B 816. 3 London and South Western Rly Co v Gomm (1882) 20 ChD 562, CA. 4 See Re Button’s Lease [1964] Ch 263 (option to purchase presumed to be freely assignable). 5 See Osborne v Bradley [1903] 2 Ch 446, at 450.

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7.3  Competent claimants: (b) express assignment 7.3 Although, as indicated above, assignability is recognised both at law and in equity, nevertheless in a number of important respects the common law rules are more restrictive than the equitable rules. In particular: (1) there could be no assignment at common law of the benefit of a covenant unless when the covenant was entered into the covenantee had a legal estate in the benefited land.6 (2) unlike the position in equity,7 there could be no assignment of part of the benefit of a covenant on the occasion of the severance of the benefited land, ‘For at law the benefit could not be assigned in pieces. It would have to be assigned as a whole or not at all’.8 (3) the covenantor must have executed the deed or other contractual document, whereas equity does not insist on this if the document containing the covenant has been acted upon.9 Accordingly, although some of the rules for assignment are common to both law and equity, the concentration in this chapter will be upon the wider equitable rules which, in any event, are exclusively involved when enforcement is sought against a successor of the original covenantor since such a person is bound by the covenant (if at all) only in equity.10

EXPRESS ASSIGNABILITY NOT NEGATIVED BY QUALIFIED ANNEXATION 7.4 In the absence of an indication to the contrary, the presumption of assignability extends to all forms of assignment permitted, including assignments of fragmented parts of the benefit of the covenant which correspond to fragmented parts of the benefited land produced by disposals.11 In Stilwell v Blackman,12 it was argued that where the original covenanting parties provide for a degree of annexation of the covenant to the benefited land which itself produces less than the maximum amount of transmissibility, then that  constitutes an indication that the parties intend to restrict express assignments of the covenant to the same limits. This argument was, however, rejected on the ground that annexation and express assignment were two independent mechanisms by which the benefit of a covenant might be transmitted on a disposition of the benefited land, and the fact that the parties had restricted the scope of one of those mechanisms did not lead to the inference that they intended to restrict the scope of the other mechanism.

6

7 8 9 10 11 12

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For this reason, the restrictive covenant in Rogers v Hosegood [1900] 2 Ch 388 (which had been entered into with a mortgagor of the land whose only interest at the time was the equity of redemption) ran only in equity and not at law. The same applies to the covenants entered into with other covenantees having only equitable interests. See Renals v Cowlishaw (1878) 9 ChD 125, at pp 130–131. Per Romer LJ in Re Union of London and Smith’s Bank Ltd’s Conveyance [1933] Ch 611, at p 630. The position, in this respect, of assignments under s  136 of the Law of Property Act 1925 is unclear. This section is referred to further below. Formby v Barker [1903] 2 Ch 539, per Vaughan Williams LJ at p 549 and Romer LJ at p 555. See Chapter 9. Stilwell v Blackman [1968] Ch 508 (Ungoed-Thomas J). Ibid. For the facts of this case, see above, para 6.64.

The time for making an express assignment 7.7 The decision in this case did not give rise, in a clear-cut form, to the application of the above principle,13 but it had been tacitly applied (without argument on this  point) in Russell v Archdale14 where annexation was found to have been made to the land as a whole (with the result that the benefit of the covenant did not pass to a purchaser of part only of the land) but where an express assignment of the covenant by the covenantee to that purchaser, made at the time of the sale, was treated as effective.15 7.5 In Marquess of Zetland v Driver16 and Roake v Chadha,17 the terms of the covenant in each case provided for annexation to be restricted or excluded but contained an express acknowledgment of the right of the covenantee to make any express assignment. In the former case, the intent of a covenant entered into in 1928 was expressed to be ‘to benefit and protect such part or parts of the lands in the borough, township or parish of Redcar then subject to the settlement as should for the time being remain unsold or as should have been sold by the vendor or his successors in title with the express benefit of the covenants’ and in the latter case a covenant entered into in 1934 provided ‘but so that this covenant shall not enure for the benefit of any owner or subsequent purchaser of any part of the Vendors’ Sudbury Court Estate at Wembley unless the benefit of this covenant shall be expressly assigned’.18 Neither case was concerned with the exercise of the power to assign, but it is implicit in each case that such power was effectively expressly preserved.

THE TIME FOR MAKING AN EXPRESS ASSIGNMENT Assignment made at the time of the transfer 7.6 The occasion for making an express assignment of the benefit of a restrictive covenant is normally a disposition of the whole or some part of the benefited land.19 If the assignment is made at that time, no difficulty will arise.

Assignment made after the time of the transfer I:  General rule 7.7 In Re Union of London and Smith’s Bank Ltd’s Conveyance,20 an assignment made at a later date was held to be ineffective.

13 14 15 16 17 18

19 20

Above, para 6.71. [1964] Ch 38 (Buckley J). See, also, Griffiths v Band (1974) 29 P&CR 243 (Goulding J). [1939] Ch 1, CA. [1984] 1 WLR 40 (HH Judge Paul Baker, sitting as a High Court judge). These words were held to have the effect of excluding the annexing effect of s 78(1) of the Law of Property Act 1925 (as interpreted by the Court of Appeal in Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594), and treated as preserving the right to make express assignments of the benefit of the covenant. See the remarks of Sargant J in Ives v Brown [1919] 2 Ch 314, at p 323. [1933] Ch 611, CA.

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7.7  Competent claimants: (b) express assignment In view of the importance of establishing the limits of what was decided in this case (and the difficulty of extracting the essential facts from the report), it is proposed to summarise these facts. They are as follows. In 1907, a company (‘the Shoreham Company’), purchased several hundred acres of land in the vicinity of Shoreham and Lancing in Sussex. By a conveyance executed in 1908, the Shoreham Company sold and conveyed some 515 acres of this land to purchasers who covenanted with the Shoreham Company to observe certain restrictions on building and user (‘the 1908 covenant’). At the time of this conveyance, the remainder of the land purchased by the Shoreham Company in 1907 (‘the land benefited by the 1908 covenant’) remained vested in the company. By a conveyance executed on 10 May 1909, part of the 515 acres was conveyed to Mr Bury who proceeded at once to divide it up into smaller parcels. By a conveyance executed on 11 May 1909, one of these smaller parcels comprising some 147 acres was conveyed to Mr Phillips who covenanted with Mr Bury his heirs and assigns to observe certain restrictions on building and user (‘the 1909 covenant’). Mr Bury at that time remained the owner of the other part of the 515 acres which had been conveyed to him (‘the land benefited by the 1909 covenant’). Subsequently (the precise date does not appear from the report) the first defendant, Mr Easter, became the owner in fee of the greater part of the land benefited by the 1908 covenant and remained the owner of a substantial part of it at the date of the proceedings. Further, Mr Easter and his wife (the second defendant) became (and were at the date of the proceedings) the owners in fee of a substantial part of the land benefited by the 1909 covenant. By assignments executed in 1920 and 1921, the Shoreham Company (and the erstwhile intermediate owners of the land benefited by the 1908 covenant) assigned to Mr Easter the benefit of (inter alios) the 1908 covenant and by an assignment executed in 1931, Mr Bury assigned to Mr and Mrs Easter the benefit of the 1909 covenant. At the dates of each of these assignments, the respective assignors had ceased to own any land capable of benefiting from the covenants. By a conveyance executed in 1929 (there having been one or more conveyances of the 147 acres in between) the claimant, Miles, became owner in fee of the 147 acres. In 1931, the claimant commenced these proceedings for a declaration that the 1908 covenant and the 1909 covenant were not enforceable by the defendants or either of them against the claimant or his successors in title as owner or owners of the 147 acres. The essence of the above facts is that the claimant had become the owner of the 147 acres upon which the 1908 covenant and the 1909 covenant had been imposed and the defendants, having become the owners of the land which was originally benefited by those covenants, took subsequent assignments of the benefit of those covenants. The sole question for decision was whether the defendants were entitled to the benefit of the 1908 covenant and the 1909 covenant.

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The time for making an express assignment 7.10 7.8

The Court of Appeal (affirming the decision of Bennett J) held:

(1) assuming, in favour of the covenantees, that they had each retained land capable of benefiting from the covenants, the words of covenant were such that neither covenant had been annexed to any land of the respective covenantees;21 (2) although each of the covenants was assignable, since at the date of each of the assignments the respective assignors had sold the whole of the land for the benefit of which the covenants were entered into, the assignors had ceased to be entitled to enforce the covenants and could not, unless they held the benefit of the covenants as trustees for the assignees,22 confer any greater rights upon the assignees than they possessed themselves.23 The purported assignments were accordingly of no effect and the defendants were not entitled to enforce the covenants. 7.9 It is to be noted that the covenants were entirely spent in the hands of the assignor. Accordingly, the actual decision is limited to the case of a purported assignment by an assignor who, at the date of the subsequent assignment, owns no other land entitling the assignor to enforce the covenant. In such a case (subject to point (III) below), the covenant is spent and no longer exists with the result that there is nothing for the assignor to assign.24 If at the date of the assignment the covenant is still enforceable by the assignor in  respect of other land which he still retains, then the covenant clearly still exists in relation to that land and the question arises whether it remains assignable in respect of the part of the benefited land previously disposed of. On this issue, there remains no direct decision. However, as a matter of principle, as the purported assignor has no ability to enforce the covenant in relation to land other than that still held by him, there would seem to be no ability in him to assign rights of enforcement (ie the benefit of the covenant) in respect of the land transferred away previously in relation to which he has no right to enforce it. 7.10 Further, in the course of delivering the judgment of the Court of Appeal in Re Union of London & Smith’s Bank Ltd’s Conveyance, Romer LJ said:25 ‘The covenantee must, indeed, be at liberty to include in any sale of the retained property the right to enforce the covenants. He might not otherwise be able to dispose of such property to the best advantage, and the intention with which he obtained the covenant would be defeated. But if he has been able to sell any particular part of his property without assigning to the purchaser the benefit of the covenant, there seems no reason why he should at a later date and as an independent transaction be at liberty to confer upon the purchaser such benefit. To hold that he could do so would be to treat the covenant as

21 As to the requirements for annexation, see Chapter 6. 22 As in Ives v Brown [1919] 2 Ch 314 and Lord Northbourne v Johnston & Son [1922] 2 Ch 309. See, also, Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd [1952] Ch 286 and Earl of Leicester v Wells-next-the-Sea [1973] Ch 110. 23 Applying the decision of Sargant J in Chambers v Randall [1923] 1 Ch 149. 24 See also as to this, Re Rutherford’s Conveyance [1938] 1 All ER 495. 25 [1933] Ch 611, at p 632.

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7.11  Competent claimants: (b) express assignment having been obtained, not only for the purpose of enabling the covenantee to dispose of his land to the best advantage, but also for the purpose of enabling him to dispose of the benefit of the covenant to the best advantage.’ 7.11 It would therefore seem that once part of the benefited land is sold, then  even though the covenant remains alive as to another part, the benefit cannot be assigned to the owner of the part sold after completion of the sale.26 If there has been an equitable assignment, that may subsequently be converted into a legal assignment by the assignee giving notice in writing of the assignment to the owner of the burdened land pursuant to section 136(1) of the Law of Property Act 1925.27

II:  Exception – covenant held by a bare trustee 7.12 The rule laid down in Re Union of London & Smith’s Bank Ltd’s Conveyance28 does not apply where the covenant is held by a trustee who has no beneficial interest in the benefited land upon trust (whether created expressly29 or by operation of law30) for a beneficiary in whom the benefited land is vested. In such a case, a subsequent assignment of the benefit of the covenant by the trustee to the beneficiary will be valid. Thus, in Lord Northbourne v Johnston & Son,31 trustees held the Shipcote Estate  upon trust for Lady Northbourne absolutely. In 1881 they sold and conveyed part of the estate to a purchaser (the predecessor in title of the defendants) who entered into a restrictive covenant with the trustees. In 1884, the trustees conveyed the remainder of the estate to Lady Northbourne but without assigning the benefit of any covenants. On Lady Northbourne’s death, Lord Northbourne became absolutely entitled under her will to the remainder of the estate. In 1921, the sole survivor of the trustees assigned the benefit of (inter alios) the covenant contained in the 1881 conveyance to Lord Northbourne and the validity of this assignment was upheld. 7.13 Moreover, it appears from the cases cited below that, even without the subsequent assignment, the equitable entitlement to the benefit of the covenant under the trust would itself be sufficient to found an action for an injunction. Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd32 is to the same effect. In that case, in 1923, Mrs Mardon, the owner of Devonia 26 An argument to the opposite effect might be mounted on the basis of the remarks of Sargant J in Chambers v Randall [1923] 1 Ch 149, at p 159, but these remarks were made in the context of the benefit of the covenant which, before the assignment, was held (as to the land in question) upon trust for the assignee – as to which see point (III) below (Second possible exception – vendor as a constructive trustee of the covenant for the purchaser). 27 See William Brandts Sons & Co Ltd v Dunlop Rubber Co Ltd [1905] AC 454. It seems unlikely, however, that there can be a legal assignment under the subsection of part only of the benefit of a restrictive covenant: see Jones v Humphreys [1902] 1 KB 10; Forster v Baker [1910] 2 KB 636 and Williams v Atlantic Assurance Co Ltd [1933] 1 KB 81. 28 [1933] Ch 611, CA. 29 As in Schreiber v Creed (1839) 10 Sim 9, 33; Eastwood v Lever (1863) 4 De GJ & Sm 114. 30 As in Ives v Brown [1919] 2 Ch 314; Lord Northbourne v Johnston [1922] 2 Ch 309; Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd [1952] Ch 286 and Earl of Leicester v Wells-next-the-Sea UDC [1973] Ch 110. 31 [1922] 2 Ch 309 (Sargant J). 32 [1952] Ch 286 (Upjohn J).

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The time for making an express assignment 7.15 and neighbouring premises, sold and conveyed the neighbouring premises to purchasers (the predecessor in title of the defendant) who entered into a restrictive covenant. In 1944 Mrs Mardon died leaving her real and personal estate to her son, Leonard, absolutely and in 1945 Mrs Mardon’s executors assented in writing to the vesting of Devonia in Leonard, no mention being made of the covenant. In 1948, Leonard granted a lease of Devonia to the claimant society for 21 years and by a separate deed bearing the same date assigned the benefit of the covenant to the society. The society was held to be entitled to enforce the covenant by injunction. In the course of his judgment, Upjohn J said:33 ‘… in my judgment, when her [Mrs Mardon’s] estate was duly wound up and administered, and this case has been argued before me on the footing that that happened many years ago, the benefit of the covenant was held by the executors as bare trustees for the residuary legatee, Leonard Soper Mardon, who was himself one of the executors. He, therefore, became entitled to the benefit of this restrictive covenant in equity, and, in my judgment, he was entitled to assign the benefit in equity on an assignment of Devonia. No doubt, had the covenant been assigned to him by the executors, he could also have assigned it at law.’ 7.14 Similarly, in Earl of Leicester v Wells-next-the-Sea,34 a tenant for life, in whose favour a vesting assent had been executed but which did not refer to the benefit of a restrictive covenant which had devolved on the special executors with the land, was held to be entitled to the benefit of the covenant under the trust imposed upon the special executors by section 7(1) of the Settled Land Act 1925. Accordingly, the tenant for life could enforce the covenant without either joining the special executors as parties35 or obtaining an assignment of the covenant from them.36

III: Second possible exception – vendor as a constructive trustee of the covenant for the purchaser 7.15 In the case of benefited land which becomes subject to a binding contract  for sale, for many purposes the vendor is, pending completion, a constructive trustee for the purchaser,37 but quite apart from the fact that the trusteeship is qualified,38 the vendor is a trustee only of the subject-matter of the contract. Accordingly, since, in the case of a restrictive covenant which is not annexed to the land, the benefit of the covenant comprises an interest which is separate and distinct from the land, it will not fall within the scope of the vendor’s trusteeship unless it is expressly referred to (either specifically or by way of general description of rights which is sufficiently comprehensive) in the

33 Ibid, at p 291. 34 [1973] Ch 110 (Plowman J). 35 As was considered necessary in regard to the executors in the corresponding position (although before the Settled Land Act 1925) in Ives v Brown [1919] 2 Ch 314 (Sargant J). 36 As happened in Lord Northbourne v Johnston & Son [1922] 2 Ch 309 (Sargant J). 37 See the judgment of Jessel MR in Lysaght v Edwards (1876) 2 ChD 499, at p 506. 38 See Shaw v Foster (1872) LR 5 HL 321, per Lord Hatherley at p 356, and the judgments in Rayner v Preston (1881) 18 ChD 1.

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7.16  Competent claimants: (b) express assignment contract39 or, perhaps, an intention to include it can be inferred from the surrounding circumstances. 7.16 In the cases of Renals v Cowlishaw40 and Reid v Bickerstaff 41 at the respective dates of the sales of the benefited land, the vendors in each case retained other land benefited by the covenants. That fact excluded any possibility that the benefit of the covenants was impliedly included in the transactions of sale  by reason of the disposal of the whole (it being for the benefit of the transferred land and the vendor having no reason to retain it). These cases are not therefore an authority on the position where the vendor disposes of the whole of the benefited land at one and the same time to the same purchaser. In such a case, if certain circumstances exist, it might be argued that they justify the inference that the parties intended to include the benefit of the covenant in the sale so that, although not expressly mentioned, the vendor would be treated as a constructive trustee of the benefit of the covenant for the purchaser under the contract for sale. 7.17 The circumstances par excellence would be where all the following facts could be proved: (a) that the contract for sale comprised the whole of the land originally benefited; (b) that at the date of the contract, the burdened land had changed hands; (c) that at the date of the contract, the purchaser was aware of the existence of the covenant; and (d) that the covenant was of such a nature as its continued enforcement would represent a clear-cut benefit to the purchaser. 7.18 That in such circumstances it might be possible to claim that the benefit of the covenant was impliedly included in the sale, is supported by the following judicial dicta. In Renals v Cowlishaw,42 Hall V-C said: ‘A purchaser may also be entitled to the benefit of a restrictive covenant entered into with his vendor by another or others where his vendor has contracted with him that he shall be the assign of it, that is have the benefit of the covenant. And such covenant need not be express, but may be collected from the transaction of sale and purchase. In considering this, the expressed or otherwise apparent purpose or object of the covenant, in reference to its being intended to be annexed to other property, or to its being only obtained to enable the covenantee more advantageously to deal with his property, is important to be attended to. Whether the purchaser is the purchaser of all the land retained by his vendor when the covenant was entered into, is also important.’ 39 See Re Hamilton-Snowball’s Conveyance [1959] Ch 308; Henshall v Fogg [1964] 1 WLR 1127; Re Lyne-Stephens and Scott-Miller’s Contract [1920] 1 Ch 472; Rayner v Preston (1881) 18 ChD 1. In Renals v Cowlishaw (1878) 9 ChD 125 (affd (1879) 11 ChD 866), Hall V-C said ‘it must appear that the benefit of the covenant was part of the subject-matter of the purchase’ and, since, in that case, it did not so appear, the benefit of a restrictive covenant was not part of the subject-matter included in the sale. 40 (1878) 9 ChD 125; affd (1879) 11 ChD 866. 41 [1909] 2 Ch 305. 42 (1878) 9 ChD 125, at p 129; affd (1879) 11 ChD 866.

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Formal requirements for an express assignment 7.20 And later in the same judgment43 the Vice-Chancellor, in stating that to enable a purchaser to claim the benefit of a restrictive covenant as an assign it must appear that the benefit of the covenant was part of the subject-matter of the purchase, added the qualification in parenthesis:44 ‘(such purchaser not being an assign of all that the vendor retained when he executed the conveyance containing the covenants, …)’. 7.19 said:

Further, in Reid v Bickerstaff,45 Buckley LJ in the course of his judgment

‘Where a vendor takes from a purchaser a restrictive covenant, it may be that he takes it for purposes of his own, or it may be that he takes it for the benefit of the land which he is retaining after the sale on which the restrictive covenant is entered into. If the vendor is subsequently selling all the retained land, it may be that this is an element which may lead to the inference that he intended to pass with that land the benefit of the restrictive covenant.’46 If, in accordance with the foregoing dicta, the circumstances referred to above were regarded as sufficient to show an intention to include the benefit of restrictive covenants in the sale, then in the absence of an express assignment in the conveyance, it is conceived that the vendor would, following completion, be in the position of a bare trustee of the benefit of the covenant for the purchaser47 and accordingly that this would (as set out above) entitle the purchaser both to enforce the covenant in equity without an express assignment and to complete his title to the covenant at law by obtaining a subsequent assignment.

FORMAL REQUIREMENTS FOR AN EXPRESS ASSIGNMENT Common law and equitable assignments – Law of Property Act 1925, section 53(1)(a) 7.20 Since the benefit of a restrictive covenant is an interest in land,48 the provisions of section 53(1)(a) of the Law of Property Act 1925 – or in the case

43 Ibid, at p 130. 44 The use of parenthesis is explained by the fact that some of the words within them were by way of repetition of a similar qualification made in the previous sentence in which the Vice-Chancellor was treating as not falling within the normal requirements for an express assignment the case of the ‘purchaser of all the property retained by the vendor upon the occasion of the conveyance containing the covenants.’ 45 [1909] 2 Ch 305, at pp 225–226. 46 Immediately following this passage, the judgment continues; ‘But this even does not follow for, as was pointed out by Selwyn LJ in Keates v Lyon (1869) 4 Ch App 218, it may be that he intended the restrictive covenant to enure for his own benefit so as to protect other land to which he was not at the time, but expected afterwards by inheritance or purchase to become, entitled, and for whose protection the restrictive covenant would be valuable. It is not necessary, however, in the present case to deal with the question as it arises where the vendor sells the whole of the retained land.’ The possibility postulated could not, however, avail the covenantee against a successor from the original covenantor whose proprietary liability (if any) is confined to the land which the covenant originally touched and concerned. 47 See the speech of Lord Hatherley in Shaw v Foster (1872) LR 5 HL 321, at p 356 and Bridges v Mees [1957] Ch 475. The trust, being a constructive trust, would be enforceable although not made by writing in accordance with s 53(1)(a) of the Law of Property Act 1925: see s 53(2). Section 53(1)(a) is considered in the next section of the text. 48 London and South Western Rly Co v Gomm (1882) 20 ChD 562, CA.

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7.21  Competent claimants: (b) express assignment of pre-1926 covenants, the corresponding provisions under the Statute of Frauds 1677 – will apply to all common law and equitable assignments of restrictive covenants.49 Under section 53(1)(a), the assignment must be ‘by writing signed by the [assignor] or by his agent thereunto lawfully authorised in writing, or by will’ or alternatively take effect ‘by operation of law’.

Statutory assignments 7.21 For a statutory assignment under section 136(1) of the Law of Property Act 1925,50 the requirements of that subsection must be complied with. The assignment must therefore similarly be ‘by writing under the hand of the assignor’. In this case: (i) the assignor can only act personally and not through an agent; and (ii) notice in writing must have been given to the person or persons bound by the covenant. 7.22 In the case of most choses in action, a legal assignment is only possible if section 136(1) is complied with but, as has been seen,51 a legal assignment at common law has long been permitted in the case of covenants which touch and concern land and it is not clear what, if any, advantage there is in a statutory legal assignment as compared with a common law legal assignment. In this connection, having regard to the language of section 136(1), the only type of assignment which appears to be permitted is an assignment of the entirety of a covenant and not a severed part so that, in this respect, an assignment under the section appears to be as restricted as an assignment at common law.

Should notice of the assignment be given to those burdened by the covenant? 7.23 If it is desired to obtain a statutory assignment under section 136(1) of the Law of Property Act 1925, notice of the assignment must be given. In the case of common law or equitable assignments, the ideal course would be to give notice as those burdened by the covenant would appear to be entitled to assume that the original covenantee or other person known to be entitled remains the person entitled so that any consent, release or discharge given by that person would prima facie (and subject to the terms of the covenant) be effective even though he had assigned the benefit of the covenant, provided the person dealing with him had no notice of the assignment. Nevertheless, it does not appear to be the practice for any such notice to be given and it is no doubt the case that for most practical purposes it is unnecessary to do so.

Language of assignment 7.24 Subject to compliance with section 53(1)(a) (or its predecessor), no particular form of language is required but merely an indication of an intention 49 50 51

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But for the assignment of the contractual right only, no special formality seems to be required. Re-enacting s 26(6) of the Judicature Act 1873. Above, para 7.1.

Formal requirements for an express assignment 7.27 in the document that the benefit is to pass to the person acquiring the relevant benefited land. 7.25 In Renals v Cowlishaw,52 Hall V-C, finding no indication in a conveyance of the benefited land to one Bainbrigge, of any intention to pass on the benefit of covenants in earlier conveyances, said: ‘If it had appeared in the conveyance to Bainbrigge that there were such restrictive covenants in conveyances already executed, and expressly or otherwise that Bainbrigge was to have the benefit of them, he and the Plaintiffs, as claiming through him, would have been entitled to the benefit of them. But there being in the conveyance to Bainbrigge no reference to the existence of such covenants by recital of the conveyances containing them or otherwise, the Plaintiffs cannot be treated as entitled to the benefit of them.’ It would therefore appear that a recital of the existence of covenants previously taken for the benefit of land being transferred might, without more, be sufficient to effect an assignment, but each transfer presents its own question of construction. As Hall V-C also said in the same case,53 ‘it must appear that the benefit of the covenant was part of the subject-matter of the purchase’.

Extent of benefit assigned 7.26 Unless severance of the covenant is expressly excluded by the terms of the covenant, the benefit may be assigned in equity with any part or parts of the land so far as the benefit relates to such part or parts,54 and this is so even though the covenant may, on its true construction, be found to be annexed to the land as a whole.55 7.27 Further, whilst an assignment for a limited period only would not appear to be possible either at common law or under section 136(1) of the Law of Property Act 1925, nevertheless since this could be achieved behind a trust, it is considered that in equity such an assignment will operate, if not directly at any rate indirectly (under an implied or constructive trust56), to vest the benefit of the covenant in equity for the specified period. In Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd,57 the assignment of the benefit was made to the claimant society to whom (by a contemporaneous but separate instrument) a lease was granted of the benefited land for a term of 21 years. In form, the assignment appeared to be out-and-out and no issue arose in the case as to whether it was commensurate only with the term of the lease. This being the case, Upjohn J, after holding the society entitled to enforce the covenant, said towards the end of his judgment: ‘I say nothing as to the position when the plaintiffs’ lease expires so that their estate in Devonia comes to an end, nor whether Leonard Soper Mardon, having apparently assigned away the entire benefit of the covenant, will then be in any position further to enforce it.’ 52 53

(1878) 9 ChD 125, at pp 130–131; affd (1879) 11 ChD 866. Ibid, at p 130. Cf Griffith v Pelton [1958] Ch 205 (whether lessee’s option to purchase freehold included in an assignment of the lease). 54 Above, para 7.4. 55 Above, para 6.65 et seq. 56 Cf Bannister v Bannister [1948] WN 261. 57 [1952] Ch 286.

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7.28  Competent claimants: (b) express assignment 7.28 Clearly, in the case of an assignment to a lessee – or other limited owner – it should be made clear that the assignment is limited to the duration of the term or interest granted (including, in the case of leases of business premises, any statutory extension of the term).

EFFECT OF SECTION 62(1) OF THE LAW OF PROPERTY ACT 1925 OR (PRE 1926) SECTION 6 OF THE CONVEYANCING ACT 1881 7.29 By section 62(1) of the 1925 Act, a conveyance of land is deemed to include: ‘liberties, privileges, easements, rights and advantages whatsoever, appertaining or reputed to appertain to the land, or any part thereof, or, at the time of the conveyance, demised, occupied, or enjoyed with or reputed or known as part or parcel of or appurtenant to the land or any part thereof.’ In Rogers v Hosegood,58 Farwell J at first instance said that it might well be that the right to sue on covenants which were not annexed to land could not be said ‘to belong, or be reputed to belong thereto’ within the meaning of express general words in a conveyance under which the land was conveyed together with ‘all the rights, easements, or appurtenances belonging or reputed to belong thereto’. But the point was left undecided and on appeal, was not referred to by the Court of Appeal. In Shropshire County Council v Edwards,59 the question was raised but left open, the decision proceeding on other grounds.60 7.30 In Roake v Chadha,61 it was argued that the rights referred to in section  62 are legal rights, and HH Judge Paul Baker QC sitting as a High Court  Judge said ‘there may well be something in this’, although he did not decide the point (as he found it could not be a right appertaining to the land or reputed to do so when the words used in the covenant itself indicated the opposite, as they did there). In contrast, in Federated Homes Ltd v Mill Lodge Properties Ltd,62 the judge at first instance held that section 62(1) did have the effect of assigning the benefit of a restrictive covenant to a purchaser of the benefited land, but there is no report showing the reasoning (it was simply referred to in the Court of Appeal as having been so held) and the decision was affirmed by the Court of Appeal on other grounds.63 7.31 However, in Kumar v Dunning,64 Sir Nicholas Browne-Wilkinson V-C, with whose judgment Croom-Johnson and Neill LJJ agreed, when considering section 62(1) in the context of whether, on the assignment of a reversion

58 59 60 61 62 63 64

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[1900] 2 Ch 388, CA. (1982) 46 P&CR 270, at p 279 (HH Judge Rubin sitting as a High Court Judge). Above, para 6.12. [1984] 1 WLR 40. [1980] 1 WLR 594, CA. Above, para 6.32 et seq. [1987] 3 WLR 1167, [1989] QB 193, CA.

Effect of LPA 1925, s 62(1) or (pre 1926) Conveyancing Act 1881, s 6 7.33 expectant on a lease, the benefit of a surety covenant contained in the lease would pass under the section, expressed the following view (at p 198): ‘The main intention of section 62 was to provide a form of statutory shorthand rendering it unnecessary to include such words expressly in every conveyance. It is a matter of debate whether, in the context of the section, the words “rights … appertaining to the land” include rights arising under covenant as opposed to strict property rights. However, I will assume, without deciding, that rights under covenant are within the words of the section. Even on that assumption, it still has to be shown that the right “appertains to the land”. In my judgment, a right under covenant cannot appertain to the land unless the benefit is in some way annexed to the land.’ He went on, ‘If the benefit of a covenant passes under section 62 even if not annexed to the land, the whole modern law of restrictive covenants would have been established on an erroneous basis. Section 62(1) replaces s 6(1) of the Conveyancing Act 1881. If the general words “rights … appertaining to land” operate to transfer the benefit of a negative restrictive covenant, whether or not such benefit was expressly assigned, it would make all the law developed since 1881 unnecessary. It is established that, in the absence of annexation to the land or the existence of a building scheme, the benefit of a restrictive covenant cannot pass except by way of express assignment. The law so established is inconsistent with the view that a covenant, the benefit of which is not annexed to the land, can pass under the general words in section 62’ [emphasis added]. 7.32 The thrust of the above statement is that even if the section can apply to covenants, it only applies to those covenants which are already ‘in some way annexed to the land’ being conveyed and capable of passing under the ordinary law of restrictive covenants – in other words, the section transfers the benefit of a restrictive covenant only when that benefit is one which is capable of passing without express assignment (that is to say, under the law of restrictive covenants – under which it would therefore pass anyway). Put another way, section 62 cannot operate to pass on anything other than ‘rights appertaining to the land’ by which is meant rights which are capable of passing without express assignment in the instrument relating to them – which in the context of benefits under freehold land covenants means restrictive covenants which comply with the necessary requirements of implied transmissibility (by annexation or by being part of a building scheme). 7.33 In the subsequent case of J Sainsbury plc v Enfield London Borough Council,65 the defendant before Morritt J did not contend that the benefit of restrictive covenants entered into in 1894 had passed in subsequent conveyances of the covenantee’s land under section 6 of the Conveyancing Act 1881 or section 62 of the Law of Property Act 1925, because of the decision in Kumar v Dunning.66 Though the point was reserved for argument on any appeal, no appeal was, for whatever reason, brought.

65 66

[1989] 1 WLR 590 (Morritt J). [1987] 3 WLR 1167, [1989] QB 193, CA – see p 595C of Sainsbury.

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7.34  Competent claimants: (b) express assignment In Sugarman v Porter,67 an argument arose under section 63 of the Law of Property Act 1925 (as to which, see below). Peter Smith J (in para 34) quoted the parts of Sir Nicholas Browne-Wilkinson’s judgment in Kumar set out above, applied the same logic to section 63, and made the same point that a large amount of the law relating to the transmission of the benefit of restrictive covenants would, were it otherwise, have been largely redundant (see especially paras 35, 37 and 42–43). 7.34 In the earlier case of Harbour Estates Ltd v HSBC Bank plc,68 Lindsay J, considering section 63 in the somewhat different context of a break clause in a lease (below), though he said that he would himself be ‘loth to require of section 63 that it can pass only that which in a technical sense is an appurtenance of, annexed to, or is such as to touch and concern the property conveyed’ and considered it was arguable that that was not so for reasons he set out, considered himself bound by the decision and reasoning in Kumar, which he described (at the end of para 35) as ‘an insurmountable argument’ barring such a conclusion. Lindsay J went on to say this was ‘especially insurmountable as the Kumar case reasoning was approved by the House of Lords in Swift (P & A) Investments v Combined English Stores Group plc.69 That case related to the question of whether a particular landlord and tenant covenant ‘touched and concerned’ the land so as to be enforceable, and Lord Oliver, for the House, said at p 640H that the problem was to all intents and purposes identical on the question of what touched and concerned the land to that in Kumar and that – though focusing on that point – ‘the decision of the Court of Appeal in Kumar v Dunning … was correct and was reached for the correct reasons’. 7.35 The effect of the foregoing is that section 62(1) does not operate as an alternative to an express assignment in cases where there is neither annexation nor a building scheme. This is also consistent with the equivocal nature of such a covenant as being one having the potential for running with the land but requiring a further positive act before that potential can be realised. In the case of registered land, it is considered that section 11 (in the case of freehold land) and section 12 (in the case of leasehold land) of the Land Registration Act 2002 have no greater effect on the vesting of the benefit of a non-annexed restrictive covenant than section 62(1) of the Law of Property Act 1925 since the rights which vest thereunder are limited to those which are ‘interests subsisting for the benefit of the estate’.70

Effect of section 63 of the Law of Property Act 1925 7.36

By section 63 of the 1925 Act:

‘(1) every conveyance is effectual to pass all the estate right title interest claim and demand which the conveying parties respectively have in, 67 68 69 70

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[2006] 2 P&CR 14. [2005] Ch 194. [1989] AC 632. And similarly, under the Land Registration Act 1925 the rights which vested thereunder were, under ss 5, 19(3) and 20 (in the case of freehold land) and ss 9, 19(3) and 23 (in the case of leasehold land) those which belonged to, or were appurtenenant to, the registered estate.

Effect of LPA 1925, s 62(1) or (pre 1926) Conveyancing Act 1881, s 6 7.39 to or on the property conveyed or expressed or intended so to be or which they respectively have power to convey in, to, or on the same. (2) This section applies only if and so far as a contrary intention is not expressed in the conveyance and has the effect subject to the terms of the conveyance and to the provisions therein contained.’ The same points apply as in relation to section 62 (above). 7.37 In relation specifically to section 63, as referred to above, albeit in the somewhat different context of a break clause in a lease, Lindsay J in Harbour Estates Ltd v HSBC Bank plc71 said that he personally would be ‘loth to require of section 63 that it can pass only that which in a technical sense is an appurtenance of, annexed to, or is such as to touch and concern the property conveyed’ and that it was arguable that that was not so for reasons he set out, but considered the decision and reasoning of the Court of Appeal in Kumar amounted to an insurmountable argument against this being the law, the same conclusion applying in relation to section 63 as in relation to section 62. 7.38 Again as referred to above, in Sugarman v Porter72 dealing specifically with section 63 in the context of a restrictive covenant, Peter Smith J, as well as referring to the relevant passages in Harbour Estates, quoted the passages from the judgment of Browne-Wilkinson V-C in Kumar, set out at para 7.31 above, and said:73 ‘This decision seems to me to be equally applicable to an attempt to pass the benefits of a covenant by section 63 of the Law of Property Act 1925’. He noted in relation to section 63 that it was not argued otherwise before Morritt J in Sainsbury plc v Enfield LBC,74 nor in the Crest Nicholson case, and that it did not appear to have been argued in any earlier case either. 7.39 As he pointed out (and as Sir Nicholas Browne-Wilkinson V-C observed in Kumar in relation to section 62), if it was otherwise a large part of the law relating to restrictive covenants (namely that the transmission of the benefit requires annexation, assignment or a building scheme) would have been redundant. Peter Smith J concluded,75 ‘It is important to read Sir Nicholas Browne-Wilknson’s observations in Kumar in context. For the benefit of a covenant [to] pass he expressed the view that it would have to be shown that it touches and concerns the land so as to be capable of annexation. I accept that the benefit of a restrictive covenant may be an interest in land if it touches and concerns the land in question for the purpose of s 63. However there first has to be consideration whether if the interest in question is the benefit of a covenant it is something that touches and concerns the land’ [emphasis added].

71 72 73 74 75

[2005] Ch 194, at 210. [2006] 2 P&CR 14. At para 35. [1989] 1 WLR 590 at 595. In paras 42 and 43.

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7.40  Competent claimants: (b) express assignment On the facts of that case, he went on: ‘This throws one back to the wording of the Conveyance in my view. By the wording the Conveyance showed that the covenant touched and concerned the land for the time being that belonged to Mrs Hart that was unsold and thereafter if the benefit was expressly assigned. If on the occasion of the next sale off there is no assignment there is nothing upon which Section 63 can bite because there is no interest in land that is capable of being passed at that stage because Mrs Hart has plainly made a decision not to pass the benefit on. I do not see how section 63 can be used to counter the express wording of the covenant.’ 7.40 As in Crest Nicholson (where similar wording was used in the conveyance), the covenant in Sugarman was not annexed to the land in the hands of the claimant. The restrictive covenant had only been annexed to the land for the period for which it remained unsold by the original vendor. The claimant in Sugarman therefore failed in contending the covenant could be enforced by her. Section 63 can only pass an interest in land, and where there is a transfer of some of the covenantee’s land but the covenant is annexed only to unsold land of the covenantee, no such interest subsists in the land which is being conveyed (ie his ‘sold off’ land). Where the restrictive covenant is annexed to the land, the benefit may pass under section 63 (or section 62), but this adds nothing as it would pass anyway.

IMPLIED ASSIGNMENT 7.41 In view of the provisions of section 53(1)(a) of the Law of Property Act 1925 considered above (which re-enact similar provisions formerly contained in the Statute of Frauds 1677), it would appear (quite apart from any limits imposed by the law relating to covenants) that the only circumstances in which there could be an implied assignment of the benefit of a restrictive covenant would be by the benefit becoming vested in a successor under the operation of a resulting, implied or constructive trust all of which, by section 53(2) of the Act, fall outside the provisions of section 53(1). As has been seen,76 the law relating to covenants usually requires an assignment to be express, the only exceptions discernible from the reports being those of bare trustees77 or vendors as such trustees78 (and building schemes, which are considered separately in Chapter 8 below).

AFTER THE FIRST ASSIGNMENT, IS AN UNBROKEN CHAIN OF ASSIGNMENTS CONNECTING THE FIRST ASSIGNEE WITH THE CLAIMANT REQUIRED? 7.42

In the absence of annexation, the answer is considered to be ‘yes’.

As set out in paras 6.94–6.103 above, it is tentatively considered that an assignee of the original covenantee could effect annexation (the means achieving which is considered at paras 6.104–6.106 above). 76 77 78

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Above, para 7.1. At para 7.12 et seq above. At para 7.15 et seq above.

Assignment by operation of law 7.44 However, in the absence of annexation being achieved at any time (or there being a building scheme79), an unbroken chain of assignments will be required, through to the claimant. As referred to at para 6.106(1) above, in all the decided cases where the claimant has successfully relied upon express assignment as establishing title to the benefit of a restrictive covenant, there has been such an unbroken chain of assignments (express and/or by operation of law).80

ASSIGNMENT BY OPERATION OF LAW Death of person entitled to the benefit 7.43 There is no doubt but that a restrictive covenant which is assignable by the person entitled to its benefit can pass by assignment by operation of law.81 Accordingly, on that person’s death it will, since 1 January 1898 when the Land Transfer Act 1887 came into operation, devolve upon his personal representatives as part of his estate whether it is a ‘real’ covenant or a personal covenant82 provided that the requirements for passing by express assignment are satisfied. In particular, land benefited by the covenant must also have passed to the personal representatives83 or alternatively they must hold the benefit of the covenant as bare trustees for the owner of such land.84 In the absence of this requirement being satisfied, it would seem that the covenant will, on (if not before) the death of the deceased, have become spent and of no further effect.85 7.44 In the case of the death of the person entitled to the benefit of a covenant prior to 1898, the destination of the covenant as between his heir and his personal representatives would seem to have depended upon whether the covenant was a ‘real’ covenant or a personal covenant. It will have been a real covenant – devolving with realty – if the benefit was attached to his benefited land either by annexation86 or under a building scheme or (it would seem – although the position is not entirely clear) if the covenant had been made (either expressly or by virtue of section 58(1) of the Conveyancing Act 1881) with the covenantee’s heirs and the covenant was inherently capable of benefiting land

79 As to which, see Chapter 8. 80 The reported decisions being Lord Northbourne v Johnston & Son [1922] 2 Ch 309; Newton Abbot Co-operative Society Ltd v Williamson and Treadgold [1952] Ch 286, and (in respect of the ‘green land’) Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594. 81 ‘And, if such a covenant can be expressly assigned, it follows a fortiori that it can pass by assignment by operation of law’, per Sargant J in Ives v Brown [1919] 2 Ch 314, at p 323. 82 Ives v Brown [1919] 2 Ch 314; Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd [1952] Ch 286. 83 Formby v Barker [1903] 2 Ch 539, CA. 84 Ives v Brown [1919] 2 Ch 314 (Sargant J); Lord Northbourne v Johnston & Son [1922] 2 Ch 309. 85 Formby v Barker [1903] 2 Ch 539, CA (covenantee never having had any benefited land); Chambers v Randall [1923] 1 Ch 149 (covenantee having disposed of all the benefited land during his lifetime). 86 Rogers v Hosegood [1900] 2 Ch 388: ‘The accurate expression appears to me to be that the covenants are annexed to the land, and pass with it in much the same way as title deeds, which have been quaintly called the sinews of the land: Co. Litt. 6a. Thus the right to sue on such covenants passes to the heir and not to the executors’, per Farwell J at p 394.

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7.45  Competent claimants: (b) express assignment belonging to the covenantee.87 If this is not the position, it is difficult to see why in section 58(1) and (2) of the Conveyancing Act 1881, the legislature should have taken the trouble to distinguish so clearly between covenants deemed to be made with the covenantee, his heirs and assigns, (in subsection (1)) and covenants deemed to be made with the covenantee, his executors, administrators, and assigns (in subsection (2)).88 Further, whilst on a disposition inter vivos which is not by operation of law the benefited land and a non-annexed covenant are treated as separate pieces of property requiring individual attention, in the case of devolution on death it would have been absurd if the benefited land had devolved upon the heir and the covenant upon the personal representatives since, unless they became bare trustees of the covenant for the heir, the covenant would then cease to be enforceable as a result of one assignment by operation of law being preferred to another assignment by operation of law. Whilst this particular problem cannot arise in the case of persons entitled to the benefit of covenants who die after 1897, the like problem could arise where under the deceased’s will, his real and personal property are disposed of in different directions.

Bankruptcy of person entitled to the benefit 7.45 By section 306(1) of the Insolvency Act 1986:89 ‘The bankrupt’s estate shall vest in the trustee immediately on his appointment taking effect or, in the case of the official receiver, on his becoming trustee’. By section 291A(1) of the Act, as inserted by section 133 of the Small Business, Enterprise and Employment Act 2015, the official receiver becomes trustee of the bankrupt’s estate on the making of a bankruptcy order unless the court appoints another person under subsection (2). Accordingly, the bankrupt is now divested of his estate upon becoming bankrupt.90 By section 383(1) of the same Act,91 and subject to the exceptions specified in the rest of the section, a ‘bankrupt’s estate’ comprises ‘all property belonging to or vested in the bankrupt at the commencement of the bankruptcy’. 7.46 Since the benefit of a restrictive covenant is a chose in action, it is clearly ‘property’ which vests in accordance with the above provisions.

87 In Ives v brown [1919] 2 Ch 314, a covenant expressed to be made with two covenantees ‘their heirs and assigns’ and which in fact benefited land of the covenantees, devolved upon the personal representatives of the survivor of the covenantees. But she died in 1917 (ie, after the Land Transfer Act 1897 came into operation which provided for a deceased’s real, as well as personal, estate to devolve upon the deceased’s personal representatives. From the time when Glanvil wrote, just over a century after the Norman Conquest, the benefit of a vendor’s warranty of title devolved upon the purchaser’s heir (see Lib. VII, c. 2) until warranties as to title were replaced by covenants for title, this continued to be the position (see, now, s 76(6) of the Law of Property Act 1925). 88 It is not the case that covenants falling within subsection (1) are per se annexed to the benefited land: see J Sainsbury plc v Enfield London Borough Council [1989] 1 WLR 590 (Morritt J). 89 Substantially re-enacting s 53 of the Bankruptcy Act 1914. 90 In contrast to the previous position, where, contrary to common belief, under s 293 of the Insolvency Act 1986 (now repealed), read in conjunction with s  306, the bankrupt was not actually divested of his property rights upon his bankruptcy notwithstanding the involvement of the official receiver in his affairs thereafter until a trustee, in the form of the official receiver himself or another trustee, was formally appointed trustee, which could be some weeks later: see Adedeji v Pathaia [2014] EWCA Civ 681. 91 Substantially re-enacting provisions in s 38 of the Bankruptcy Act 1914.

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Assignment by operation of law 7.46 Whether, however, the bankrupt’s trustee could enforce the covenant or make a beneficial realisation thereof would, as in the case of personal representatives, depend upon whether any benefited land also vested in the trustee. If it did not, then the covenant will have become spent and of no further effect. Unlike the position in the case of personal representatives, however, an assignment by operation of law in favour of the bankrupt’s trustee can never operate to vest in the trustee a covenant which was vested in the bankrupt as a bare trustee since the ‘bankrupt’s estate’ which vests in the trustee excludes ‘property held by the bankrupt on trust for any other person’.92

92

Ibid, s 283(3)(a).

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8 Competent claimants: (c) building schemes

INTRODUCTION 8.1

The matters falling to be considered in this chapter are sixfold, namely:

(1) the evolution of building schemes (para 8.2 et seq); (2) the legal effects of building schemes (para 8.22 et seq); (3) the facts which must be proved in order to establish that a building scheme exists (para 8.23 et seq); (4) the factors which may negative the existence of a building scheme (para 8.90 et seq); and (5) the requirements for registration of building scheme obligations under the Land Charges Acts 1925 and 1972 or (in the case of registered land) under the Land Registration Acts 1925–2002 (para 8.104 et seq).

1  THE EVOLUTION OF BUILDING SCHEMES 8.2 Whilst there is inevitably some chronological overlap between them, four distinct phases can be identified in the evolution of building schemes.

Phase 1 – Deeds of mutual covenant at the forefront 8.3 During the first half of the nineteenth century, long before any planning restrictions of a public nature entered onto the scene, some developers of residential areas in England saw both the environmental and financial advantages of seeking to impose a strict control on the quality, type, size and number of buildings which might be constructed on the land and the use to which such buildings when constructed might be put. 8.4 Short of a private Act of Parliament, one of the more obvious legal mechanisms at the developers’ disposal for imposing such control was the deed of mutual covenant.1 Such a deed could contain covenants (primarily, but not exclusively, restrictive) designed to secure (generally by prohibition) the maintenance of prescribed standards of building of residential houses and

1

Another mechanism which was favoured in the early stages of building schemes was that of the trust: see Schreiber v Creed (1839) 10 Sim 9, per Shadwell V-C at p 33.

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8.5  Competent claimants: (c) building schemes freedom from encroachment of non-residential uses. In addition, it could impose on each original purchaser of a house or plot an obligation, on disposing of the property, to procure that the next owner became a party to the deed so novating all the covenants as between the owners for the time being of the various properties within the development and continuing their enforceability. This, therefore, was the mechanism which was adopted; and deeds of mutual covenant, imposing on the area to be developed what has been described as a ‘local law’,2 were successfully employed in a number of residential neighbourhoods many of which remain noteworthy for their distinctive stamp of elegance and character. 8.5 Such deeds were, for example, entered into in relation to residential developments in Cheltenham, Tunbridge Wells and Ramsgate. One of the earliest related to Nelson’s Crescent in Ramsgate and was the subject of the decision of Shadwell V-C in Whatman v Gibson3 where a number of restrictive covenants, including a covenant prohibiting the exercise of the trade of an innkeeper (which was held to be broken by the opening of a ‘family hotel’) were contained in a deed of covenant first executed in 1799. Similarly, the case of Schreiber v Creed4 was concerned with a deed of mutual covenant relating to the Pittville Estate in Cheltenham which was first executed by the owner (Pitt) in 1827, and Coles v Sims5 with a deed of covenant relating to the Cambray Estate in Cheltenham.6 The cases of Collins v Castle7 and Tindall v Castle8 each arose out of a deed of covenant relating to the Campden Park Estate in Tunbridge Wells.9

Phase 2 – Deeds of mutual covenant as the backcloth 8.6 Whilst the original theory underlying the deed of mutual covenant was a sound one, its practical operation as such depended upon a factor which

2

3 4 5 6

7 8 9

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This expression is, in this context, anachronistic. Indigenous property law jurists were more notable for their absence during most of the last century and it would appear that it was not until Reid v Bickerstaff [1909] 2 Ch 305 that the expression ‘local law’ in this context was first used judicially: see per Cozens-Hardy MR at p 319. The expression does, however, fit in neatly with Kelsen’s theory of the law as consisting of a ‘grundnorm’ and various subordinate norms or sources of law, including, at the more modest level, the law which parties make for themselves by entering into a contract. Given that an enforceable multilateral contract exists which regulates the rights and obligations of parties in relation to a given area, local law (albeit privately created) is thereby created. As to the expression ‘building scheme’, see above, para 3.1, footnote 2. (1838) 9 Sim 196. (1839) 10 Sim 9 (Shadwell V-C). (1854) 5 De GM & G 1. Other cases include Kilbey v Haviland (1871) 24 LT 353; Gaskin v Balls (1879) 13 ChD 324, CA; London and Suburban Land Co v Field (1881) 16 ChD 645, CA; Hooper Bromet (1904) 90 LT 234, CA; Mackenzie v Childers (1889) 43 ChD 265 (Kay J); Kelsey v Dodd (1881) 52 LJ Ch 34, CA; Tindall v Castle [1893] WN 40 (North J); Knight v Simmonds [1896] 2 Ch 294, CA. (1887) 36 ChD 243 (Kekewich J). [1893] WN 40 (North J). See also, Kilbey v Haviland (1871) 19 WR 698; Gaskin v Balls (1879) 13 ChD 324; London and Suburban Land and Building Co v Field (1881) 16 ChD 645; Wauton v Coppard [1899] 1 Ch 92.

The evolution of building schemes 8.6 could not be guaranteed, namely that those who became the owners from time to time of the land affected would in fact execute the deed. Not surprisingly, in a number of the cases referred to, it was discovered that later owners (both original and subsequent) had not executed the deed in question. Moreover, some of the deeds did not even specifically provide for execution by owners other than the original purchasers of the individual lots.10 It was therefore not long before the courts were confronted with the twin questions whether, despite non-execution, a covenant could, where such a deed existed and was known by the owner to exist, be implied on the part of non-executing owners (whether original or subsequent) for the benefit of other owners (whether original or subsequent)11 and whether the benefit of existing covenants could be regarded as vesting in subsequent owners in the absence of words of annexation or express assignment.12 Thus, in Whatman v Gibson13 the facts were as follows. Fleming, the owner of the site of Nelson’s Crescent in Ramsgate, divided it into lots for the building of a row of houses. By a deed of covenant executed in 1799, Fleming and two persons who had purchased some of the lots from him mutually covenanted with each other and also with the several persons who should at any time thereafter execute the deed that they and the proprietors for the time being of any of the lots should observe and abide by the several stipulations and restrictions thereinafter contained, including a restriction that none of the proprietors of any of the lots for the time being should at any time carry on thereon the business of an innkeeper. In 1800, Fleming sold and conveyed No 6 Nelson Crescent to Cull, the plaintiff’s [claimant’s] predecessor in title, and in 1802 he sold and conveyed No 7 to Austin, the defendant’s predecessor in title. Each conveyance recited that the purchaser had executed the deed of covenant but it is not clear that there was any finding of fact to that effect. Neither the plaintiff [claimant] nor the defendant had executed the deed. In an action by the plaintiff [claimant] to restrain the defendant from using No 7 as a family hotel, Shadwell V-C held that the defendant was bound by the covenant not to carry on the business of an innkeeper, that use of No 7 as a family hotel would constitute a breach and that the plaintiff [claimant] was entitled to an injunction. Whilst the precise grounds upon which Shadwell V-C held the benefit and burden of the covenant to run with the claimant’s and the defendant’s land are not easy to ascertain from the judgment, the Vice-Chancellor emphasised the apparent intention underlying the deed of covenant that the covenants were to be mutually binding upon and operate for the advantage of the owners for the time being of the individual lots and that each subsequent purchaser took his lot on this footing.

10 See, for example, Kelsey v Dodd (1881) 52 LJ Ch 34, CA. 11 See Nottingham Patent Brick and Tile Co v Butler (1886) 16 QBD 778, CA. 12 As to a building scheme being an alternative to an express assignment as a means of passing on the benefit of an existing covenant (even where the building scheme did not bind the covenantor by reason of its non-publication at the time he covenanted but where it was open to the covenantee expressly to assign the benefit on a subsequent sale of the land) see Nalder and Collyer’s Brewery Co Ltd v Harman (1900) 83 LT 257, CA. If a deed of covenant existed and was in fact executed by every subsequent owner then the existing covenants would have the required extended operation by virtue of their novation rather than assignment. 13 (1838) 9 Sim 196 (Shadwell V-C).

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8.7  Competent claimants: (c) building schemes 8.7 It appears from cases such as Whatman v Gibson14 and Mackenzie v 15 Childers that at this stage in the development of the law,16 enforceability was based on implying the necessary covenant or provisions so that earlier purchasers were treated as implied covenantees of later purchasers, implied assignments were treated as being made by the vendor of earlier purchasers’ covenants to later purchasers and implied covenants on the part of the estate vendor were treated as being made with all purchasers, respectively. This approach was entirely logical and gave recognition to the fact that a duly executed deed of mutual covenant was the original foundation of the building scheme, with any vacuum left by the non-execution of a deed by subsequent owners being able to be made good in appropriate circumstances by means of an implication.

Phase 3 – Underlying intention generally as the backcloth 8.8 Once the position in phase 2 above had been reached, it was a comparatively short step to imply mutual rights and obligations as between the owners for the time being of lots within a defined area not only where there was a clear-cut model for such implication in the shape of a deed of mutual covenant the contents of which clearly showed that it was intended to be all-pervading, but also where the background facts otherwise showed an intention to secure a direct nexus of enforceability by and between all such owners. 8.9 This development first took shape in the often-quoted dictum of Hall V-C in Renals v Cowlishaw17 in which Hall V-C said: ‘Who then (other than the original covenantee), is entitled to the benefit of the covenant? From the cases of Mann v Stephens,18 Western v MacDermott19 and Coles v Sims,20 it may, I think, be considered as determined that anyone who has acquired land, being one of several lots laid out for sale as building plots, where the court is satisfied that it was the intention that each one of the several purchasers should be bound by and should, as against the others, have the benefit of the covenants entered into by each of the purchasers, is entitled to the benefit of the covenant; and that this right, that is the benefit of the covenant, enures to the assign of the first purchaser, in other words runs with the land of such purchaser. This right exists not only where the several parties execute a mutual deed of covenant, but wherever a mutual contract can be sufficiently established. A purchaser may also be entitled to the benefit of a restrictive covenant entered into with his vendor by another or others where his vendor has contracted with him that he shall be the assign of it, that is have the benefit of the covenant. And such covenant need not be express, but may be collected from the transaction of sale and purchase’ [emphasis added].

14 15 16 17 18 19 20

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(1838) 9 Sim 196. (1889) 43 ChD 265. It will be noted that the decision pre-dates the decision in Tulk v Moxhay (1848) 2 Ph 774. (1878) 9 ChD 125 at p 129, approved on appeal (1879) 11 ChD 866 and cited with approval by Lord Macnaghten in Spicer v Martin (1888) 14 App Cas 12, at p 24. (1846) 15 Sim 377. (1866) 2 Ch App 72. (1854) 5 De GM & G 1.

The evolution of building schemes 8.11 Lord Esher MR, in Nottingham Patent Brick and Tile Co v Butler,21 approved as correct Wills J’s statement of the law in the court below in the following terms: ‘In my view he is right in saying that, when an estate is put up for sale in lots, subject to a condition that restrictive covenants are to be entered into by each of the purchasers with the vendor, and the vendor is intending at that sale to sell the whole of the property, the question, whether it is intended that each of the purchasers shall be liable in respect of those restrictive covenants to each of the other purchasers, is a question of fact, to be determined by the intention of the vendor and of the purchasers, and that question must be determined upon the same rules of evidence as every other question of intention. And, if it is found that it was the intention that the purchasers should be bound by the covenants inter se, a Court of Equity will, in favour of any one of the purchasers, insist upon the performance of the covenants by any other of them, and will do so under such circumstances without introducing the vendor into the matter.’ 8.10 The movement towards a general principle of mutual obligation based upon intention was carried a stage further by Lord Macnaghten in Spicer v Martin22 when, after citing with approval the dictum of Hall V-C in Renals v Cowlishaw, set out above, Lord Macnaghten said of the various persons who owned an interest in houses on an estate all of which had all been disposed of subject to a restriction confining their use to use as dwelling houses: ‘they all had a common interest in maintaining the restriction. This community of interest necessarily, I think, requires and imports reciprocity of obligation’.23 In the context in which these words were spoken, following as they did the dictum of Hall V-C, it is not entirely clear that Lord Macnaghten was intending to suggest that the ‘reciprocity of obligation’ was the product of some new equitable principle which was independent of the existence of any express or implied covenant.24 8.11 However, Lord Macnaghton’s words were clearly treated as embodying this suggestion by Parker J in Elliston v Reacher,25 where he said: ‘[T]he equity arising out of the establishment of the four points I have mentioned has been sometimes explained by the implication of mutual contracts between the various purchasers, and sometimes by the implication of a contract between each purchaser and the common vendor, that each purchaser is to have the benefit of all the covenants by the other purchasers, so that each purchaser is in equity an assign of the benefit of these covenants. In my opinion the implication of mutual contract is not always a perfectly satisfactory explanation. It may be satisfactory where all the lots are sold by auction at the same time, but when, as in cases such as Spicer v Martin, there is no sale by auction, but all the various sales are by private treaty and at various intervals of time, the circumstances may, at the date of one or more of the sales, be such as to preclude the possibility of any actual contract. For example, a prior purchaser may be dead or incapable of contracting at the 21 22 23 24 25

(1886) 16 QBD 778, at p 784. (1888) 14 App Cas 12, at p 25. Cited by Parker J in Elliston v Reacher [1908] 2 Ch 374 at p 385; by Simonds J in Lawrence v South County Freeholds Ltd [1939] Ch 656, at p 679 and by Megarry J in Brunner v Greenslade [1971] Ch 993, at p 1005A. See the observations of Simonds J in Lawrence v South County Freeholds Ltd [1939] Ch 656. [1908] 2 Ch 374, at p 385.

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8.12  Competent claimants: (c) building schemes time of a subsequent purchase, and in any event it is unlikely that the prior and subsequent purchasers are ever brought into personal relationship, and yet the equity may exist beween them. It is, I think, enough to say, using Lord Macnaghton’s words in Spicer v Martin, that where the four points I have mentioned are established, the community of interest imports in equity the reciprocity of obligation which is in fact contemplated by each at the time of his own purchase.’ 8.12 Subsequently, the position was explained by Cross J in Baxter v Four Oaks Properties Ltd26 as follows: ‘On the other hand, for well over 100 years past where the owner of land deals with it on the footing of imposing restrictive obligations on the use of various parts of it as and when he sells them off for the common benefit of himself (in so far as he retains any land) and of the various purchasers inter se a court of equity has been prepared to give effect to this common intention notwithstanding any technical difficulties involved. In the early days it was not unusual for the common vendor to have prepared a deed of mutual covenant to be executed by each purchaser … With the passage in time it became apparent that there was no particular virtue in the execution of a deed of mutual covenant – save as evidence of the intention of the parties – and what came to be called “building schemes” were enforced by the courts if satisfied that it was the intention of the parties that the various purchasers should have rights inter se, even though no attempt was made to bring them into direct contractual relations.’

Phase 4 – The Development of an equity 8.13 As has been referred to, in the course of the third phase of the development of building schemes, the judicial approach moved away from the process of implying the missing transaction or transactions towards the adoption of a wider principle of mutual obligation based upon the parties’ deemed intention. This eventually came to be seen as an independent equity. 8.14 In Lawrence v South County Freeholds Ltd,27 a plot of land was sold to a purchaser and a covenant was imposed on that purchaser in the same way that purchasers of other plots in the scheme were subject to them. However, the purchaser then sub-divided the plot into three. There was plainly no privity between the purchasers of the three plots and the question arose as to how they could enforce the covenants between themselves Simonds J acknowledged that, if a building scheme as established, there would be ‘an equity which is created by circumstances and is independent of contractual obligation’. In the event, the court held that no building scheme existed, but that had it done so each of the purchasers would have been bound by reason of equity. He said this was prima facle so – because if it could be positively shown there was a contrary intention that would obviously render any such ‘equity’ inapplicable.

26 27

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[1965] Ch 816. [1939] Ch 656, at p 682.

The evolution of building schemes 8.17 8.15 In Brunner v Greenslade,28 the same issue came before Megarry J and the practical relevance of whether the implied transaction theory or the ‘new equity’ theory lies at the root of building schemes was subjected to scrutiny on an application for an injunction which was launched in the following circumstances. In 1926, Bromley Park Garden Estates Ltd (‘BP Garden Estates’), the owners of the greater part of the Bromley Palace Estate, began to dispose of the estate taking from the purchasers covenants in circumstances which (it appears) created a building scheme in relation to the estate. In September 1928 BP Garden Estates conveyed a 0.7 acre site on the Estate to Stanfords (Builders) Ltd (‘Stanfords’) and Stanfords covenanted with BP Garden Estates (in terms which were consistent with the existence of a building scheme) to observe certain covenants, restrictions and stipulations (‘the estate covenants’) including a restriction that not more than one house should be erected on each building plot and that each such building plot should have a frontage of not less than 30 feet to a proposed road (which subsequently became Harewood Avenue). Stanfords divided the site into five plots, building one dwelling house on each having a frontage to Harewood Avenue and then selling each plot to a purchaser. Of these, No 62 was, in October 1928, sold and conveyed to the predecessor in title of the claimants [claimants] and No 64 was, in September 1928, sold and conveyed to the predecessor in title of the defendant. In each case the property was expressed to be conveyed subject to the estate covenants but none of the conveyances of any of the five sub-plots contained any covenant other than a covenant of indemnity in respect of the estate covenants. Whilst, therefore, both No 62 and No 64 were (on the assumption that the requirements for the running of the burden of the covenants had been complied with29) clearly burdened by the estate covenants, which had been entered into by Stanfords for the benefit of the remainder of the Bromley Palace Estate, there was no express covenant which extended this benefit to the purchasers of the plots inter se. In 1968, the owner of No 64 (a corner plot) sold off part of her garden having a frontage to Murray Avenue but no frontage to Harewood Avenue, to the defendant who proposed to build a house thereon. The claimants (the owners of No 62) sought an interlocutory injunction to restrain him from doing so, claiming that they were entitled to the benefit of the estate covenants. 8.16 It was not disputed that if the claimants were entitled to the benefit of the covenants the building of the proposed house would amount to a breach of covenant, but the defendant contended that since No 62 and No 64 were both within the 0.7-acre site, the claimants, as owners of No 64, could not claim the benefit of the covenants – and this was the sole issue on the motion. 8.17 The problem which confronted the claimants was that whilst, where a building scheme exists (as in the case of the Bromley Palace Estate), the covenants which are entered into by a purchaser (Stanfords in the present case) of a site forming part of the scheme land enured for the benefit of the owners

28 [1971] Ch 993. 29 Although the defendant was not the original covenantor, it appears to have been assumed that the burden of the covenant had run with his land. As to the position, in the case of post1925 building schemes, concerning the running of the burden of scheme covenants, see below, para 8.104 et seq.

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8.18  Competent claimants: (c) building schemes for the time being of other sites within the scheme, they could not enure for the benefit of a purchaser of part of a site (the claimant in the present case) as against a purchaser of another part of the same site (the defendant in the present case) since the covenantor in relation to the site (Stanfords) could not covenant with himself.30 There was therefore no covenant affecting any part of the 0.7 acre site of which the benefit could be claimed by an owner of part of that site.31 From this premise it was then contended that the absence of any relevant covenant was fatal to the claimants’ claim. Clearly, if this were correct, whenever the original purchaser from the common vendor purchased more than one plot but subsequently sold each plot to separate purchasers,32 then there would be pockets of scheme land where the owners of sub-plots within those pockets could not enforce the scheme covenants against the owners of other sub-plots in the same pocket – and this would in turn result in the incongruous situation where more proximate owners could take no action although more remote owners (of land outside the pocket in question) could. 8.18 Megarry J, after referring to the above situation and to the fact that even the complexities of schemes of development may usually be explained in terms of covenant, said:33 ‘If, then, the result of putting the basis of schemes of development on a relentless application of the law governing covenants is to produce an unsatisfactory or unworkable result, some other basis must be sought. Now it seems to me that such a basis has long existed, quite apart from the Lawrence case.’ After citing passages from the cases of Elliston v Reacher34 and Spicer v Martin,35 referred to above, Megarry J continued: ‘The major theoretical difficulties based on the law of covenant seem to me to disappear where instead there is an equity created by circumstances which is independent of contractual obligation. Further, whatever arguments there may be about unity of seisin destroying a covenant, by analogy to easements,36 I do not think that it precludes the application of a scheme of development as between purchasers of lots merely because they were initially in one hand. In this case I accordingly think that I am fabricating no new equity, but merely emphasising an established equity. This view illustrates the way in which equity, in developing one of its doctrines, refuses to allow itself to be fettered

30 See Ridley v Lee [1935] Ch 591 (Luxmoore J) and Rye v Rye [1962] AC 496, HL. In the present case, even if Stanfords had purported to covenant with BP Garden Estates and also with themselves, the covenant could only have operated as a covenant with BP Garden Estates to the exclusion of Stanfords: see s 82 of the Law of Property Act 1925. 31 In the absence of a building scheme relating to the burdened land and other land at the time of the covenant, there is no doubt that this is a fatal objection to enforcement of a covenant by the owners inter se of the burdened land: see Re Rutherford’s Conveyance [1938] Ch 396 (Simmonds J); Lawrence v South County Freeholds Ltd [1939] Ch 656 (Simmonds J). 32 Quaere as to the position where a puchaser of a single plot afterwards subdivides it: cf Re Kalsi’s Application (1993) 66 P&CR 313 (LT), at 320 and 321, ie concerning the problem of ‘Camelia’ in that case. See further as to this, footnote 52 below. 33 At p 1004D. 34 [1908] 2 Ch 374, at p 385. 35 (1888) 14 App Cas 12, at pp 18, 19. 36 Arguments later held not to be invincible in Texaco Antilles Ltd v Kernochan [1973] AC 609.

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The legal effects of building schemes 8.22 by the concept on which the doctrine is based if to do so would make the doctrine unfair or unworkable. After all, it is of the essence of a doctrine of equity that it should be equitable, and, I may add, that it should work: equity, like nature, does nothing in vain.’ Megarry J appears to have adopted the same view as Simonds J in Lawrence v South County Freeholds Ltd,37 that showing a positive intention the equity should not arise would negative it, saying: ‘Will the equity apply as between the purchasers of sub-lots only if a positive intention to this effect is established … or will it apply unless a contrary intention appears? The true view is, I think, the latter.’ 8.19 Accordingly, where a building scheme exists, reciprocity of enforceability of the covenants as between any and every owner of scheme land for the time being will be presumed unless a contrary intention is proved.38 8.20 In the Lands Tribunal decision in Re Austin’s Application,39 the Tribunal found such a contrary intention in the words of covenant which expressly declared an intent ‘that the benefit thereof may be annexed to and devolve with each and every part of the Shaw Hill Estate other than the plot or parcel of land hereby conveyed’. A subsequent purchaser of part of that plot was accordingly held not to be entitled to the benefit of the covenants entered into by the original purchaser of the entire plot. 8.21 It is thus that an ‘equity’ arising under building schemes which is independent of implied covenant was established. This represents the position now reached.

2  THE LEGAL EFFECTS OF BUILDING SCHEMES 8.22 When a building scheme exists, the effects are primarily40 sevenfold.41 Where there is such a scheme, this: (1) Provides an alternative to section 56 of the Law of Property Act 1925 (or its predecessor section).42 Purchasers who acquired their land from the common vendor at an earlier date get the benefit of later covenants entered into by later purchasers.

37 See para 8.14 above. 38 As in Knight v Simmonds [1896] 1 Ch 653; affd [1896] 2 Ch 294 and King v Dickeson (1889) 40 ChD 596 (North J) – although the decision in the previous December of the House of Lords in Spicer v Martin (1888) 14 App Cas 12, although directly relevant, was not cited in the latter case. 39 (1980) 42 P&CR 102. 40 For a further special rule, see Re Bromor Properties Ltd’s Application (1995) 70 P&CR 569, at 583, LT (greater onus on an applicant under s 84(1) of the Law of Property Act 1925). 41 For all these results to follow from the existence of a building scheme, both the burdened and the benefited land must fall within the scheme. If given land lies outside the scope of a building scheme which affects other land, then some of the consequences of the existence of the building scheme may affect the land which lies outside the defined area: see eg Nalder and Collyer’s Brewery Co Ltd v Harmon (1900) 83 LT 257, CA (burdened land outside the area of the scheme) and Allen v Veranne Builders Ltd [1988] NPC 11, Browne-Wilkinson V-C (benefited land outside the area). 42 Considered above, para 3.3 et seq.

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8.22  Competent claimants: (c) building schemes Proving the existence of a scheme thus provides an alternative for the need to show that such earlier purchasers were either (a) parties to the later conveyances or (b) persons who, on the true construction of the covenant, were intended to get the benefit of the covenant under section 56(1) of the Law of Property Act 1925 (or its predecessor section where relevant).43 The value in this respect of a building scheme was explained by Jonathan Parker LJ in Whitgift Homes Ltd v Stocks:44 ‘[T]he effect of annexation in a case where the developer of an estate sells off the various developed plots subject to restrictive covenants is that the first purchaser will not be able to enforce the covenants entered into by the purchasers of any of the other plots, whereas the last purchaser will be able to enforce the covenants entered into by all the other purchasers. Hence in the instant case the owners of those of the respondents’ plots which were sold off by the developer before it sold off 14 and 16 Ruffetts Close cannot claim the benefit of the covenants by annexation. However, if the available evidence establishes the existence of a scheme under which similar restrictive covenants imposed on a number of properties in a defined area are mutually and reciprocally enforceable as between the respective owners for the time being of those properties (commonly referred to as a “building scheme”), then the owner for the time being of each of those properties will be able to enforce the covenants against the owners for the time being of each of the other properties subject to the scheme. Thus, in the case of an estate which is sold off by a developer in various plots, the owner for the time being of each plot will be able to enforce the covenants against the owners for the time being of all the other plots, regardless of whether such plots were sold off by the developer before or after his own plot. Hence in the instant case if such a scheme exists each of the fifty-five respondents will be able to enforce the covenants affecting 14 and 16 Ruffetts Close.’ This feature also ensures the validity of the covenants entered into by the purchaser of the last plot notwithstanding that the estate vendor with whom the covenants are entered into then retains no land capable of benefiting from the covenants. In the absence of a building scheme, it is obviously necessary to prove that the claimant’s land was retained by the covenantee at the time the restrictive covenant was entered into (and had not already been sold off by the covenantee previously) in order to be part of the covenantee’s retained land benefited by the covenant. This may be very difficult where two or more plots have been transferred on the same day (ie by transfers bearing the same date): see Perkins v McIver,45 where the Court of Appeal pointed out46 that the order in which land is registered with the Land Registry provides no evidence as to this (which may depend on which solicitor

43 44 45 46

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Nottingham Patent Brick and Tile Co v Butler (1886) 16 QBD 778, CA. See also, above para 8.9 and below, para 8.61. [2001] EWCA Civ 1293 (Ch), at paras 8 and 9. [2012] EWCA Civ 735. At paras 10 and 11.

The legal effects of building schemes 8.22 registers quickest, rather than on the order of transfers within the day). This problem does not arise where there is a building scheme. (2) Provides an alternative to annexation or express assignment. Later purchasers from the common vendor get the benefit of earlier covenants entered into with the common vendor.47 In the absence of a building scheme, such later purchasers would need to show either annexation or express assignment of the covenant.48 (3) Has the effect of imposing implied covenants on the part of the estate vendor. Notwithstanding that the estate vendor does not enter into any express covenant with any of his earlier purchasers to observe the scheme covenants in relation to his undisposed of land and to impose the scheme covenants on all (or any) of the later purchasers, covenants to this effect on the part of the estate vendor will be implied unless when the scheme covenants are imposed he expressly reserves the right to use his undisposed of land in any manner he thinks fit and to sell it free from (or subject to variations of) the scheme covenants.49 No such covenants will be implied in the absence of a building scheme.50 (4) Imposes the scheme obligations on the subsequent subdivision of a parcel of scheme land. Where more than one plot of land within the scheme is initially sold to the same purchaser so that initially such plots are mutually burdened but not (as between themselves) mutually benefited, on a subsequent sale (or subsale) of such plots to different purchasers who are aware of the scheme, the benefit of the scheme covenants will prima facie vest in such purchasers so as to be enforceable inter se (as well as against owners of all other plots within the scheme).51 In the absence of a scheme, then on the subsequent severance of the burdened land into separate ownership, no fresh rights to enforce the restrictive covenants are deemed to arise with the result that no owner of a severed part of the burdened land can enforce against any other owner of the burdened land the covenants which burden each severed part.52

47

Brown v Inskip (1884) Cab & El 231; Nalder and Collyer’s Brewery Co Ltd v Harmon (1900) 83 LT 257, CA. 48 Keates v Lyon (1869) 4 Ch App 218; Renals v Cowlishaw (1879) 11 ChD 866; Reid v Bickerstaff [1909] 2 Ch 305. 49 Spicer v Martin (1888) 14 App Cas 12; Mackenzie v Childers (1889) 43 ChD 265 at 287; Re Birmingham and District Land Co and Allday [1893] 1 Ch 342; Davis v Corpn of Leicester [1894] 2 Ch 208 at 232. As to expressly reserved dispensing powers, see below, para 8.95 et seq. 50 Holford v Acton UDC [1898] 2 Ch 240. Cf Piggott v Stratton (1859) John 341; Hodges v Jones [1935] Ch 657. 51 See Brunner v Greenslade [1971] Ch 993. This would appear not to be applicable where a single lotted plot is purchased and later subdivided: cf Re Luton Trade Unionist Club’s Application (1969) 20 P&CR 1131 at 1136 (LT); Re Austin’s Application (1980) 42 P&CR 102, LT; Re Bushall’s Application (1987) 54 P&CR 386 at 391, LT; Re Kalsi’s Application (1993) 66 P&CR 313, LT, at pp 320 and 321. 52 Willé v St John [1910] 1 Ch 325, CA; Re Rutherford’s Conveyance [1938] Ch 396 (Simonds J); Lawrence v South County Freeholds Ltd [1939] Ch 656 (Simmonds J); Re Tiltwood, Sussex [1978] Ch 269 (Foster J); Re Victoria Recreation Ground, Portslade’s Application (1979) 41 P&CR 119, LT.

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8.22  Competent claimants: (c) building schemes In two cases, however, even where there is a building scheme, the subsequent fragmentation into separate ownership of a parcel of land within the scheme will not extend the benefit of the scheme covenants to the owners of the fragmented parts so as to render the covenants enforceable as between those owners. These cases are: (a) where new covenants are imposed on the occasion of the disposition of the fragmented land which do not conform to the scheme covenants. In such a case, the principle ‘expressum facit cessare taciturn’ (‘what is expressed makes what is implied silent’) will apply so as to exclude the application of the scheme covenants;53 (b) where the right to enforce the scheme covenants by the vendor against the purchaser would constitute a derogation from grant.54 In Texaco Antilles Ltd v Kernochan,55 Lord Cross, delivering the advice of the Privy Council, instanced as an example of such derogation the case of a vendor of one of the combined plots who, before the sale, had instituted a use inconsistent with the scheme covenants. (5) Means covenants extinguished (or suspended) by merger will revive on subsequent severance of the merged plots. If there is unity of seisin between two or more lots forming part of the scheme land, so that the covenants are extinguished as between those lots, they will prima facie56 revive on a subsequent severance of the merged lots into separate ownership.57 The position is otherwise where there is no scheme.58 (6) Gives rise to special considerations in respect of the registration of the burden of the scheme obligations. In the case of post-1925 building schemes, special considerations arise in connection with the protection of the building scheme covenants by registration under the Land Charges Acts 1925 and 1972 or (as the case may be) the Land Registration Acts 1925–2002. This is dealt with later in this chapter. (7) Alters the effect of acquiescence in a breach of covenant. Where the estate vendor suffers or permits departures from a scheme covenant by some of the plot owners, then unless the acquiescence or waiver was referable to the exercise of a power to release or not to enforce the covenants, reserved to the estate vendor by the scheme, that covenant may cease to be enforceable against other plot owners by both the estate

53

Knight v Simmonds [1896] 1 Ch 653; affd [1896] 2 Ch 294. An expressed intention will also exclude the scheme covenants: see Re Austin’s Application (1980) 42 P&CR 102, LT. 54 King v Dickeson (1889) 40 ChD 596 (as interpreted by Megarry J in Brunner v Greenslade [1971] Ch 993). 55 [1973] AC 609, PC, where, however, no reference was made to King v Dickeson, above. 56 The cases referred to in footnotes 53 and 54 above would appear to be equally applicable to cases falling under the present rule. 57 Texaco Antilles Ltd v Kernochan [1973] AC 609, PC. 58 Re Tiltwood, Sussex [1978] Ch 269 (Foster J); Golden Lion Hotel (Hunstanton) Ltd v Carter [1965] 1 WLR 1189. See also Keates v Lyon (1869) 4 Ch App 218; Cryer v Scott Bros (Sunbury) Ltd (1986) 55 P&CR 183 at 188; Re Victoria Recreation Ground, Portslade’s Application (1979) 41 P&CR 119, LT.

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Facts to be proved to establish existence of a building scheme 8.24 vendor and the other plot owners.59 Where there is no building scheme, there is no such general waiver.60

3 THE FACTS WHICH MUST BE PROVED TO ESTABLISH THE EXISTENCE OF A BUILDING SCHEME 8.23 Whether a building scheme exists or not is a question of fact61 and the burden of proof lies on the party asserting its existence.62 8.24 There must be proved to have been an intention on the part of the vendor and the covenantors (express or implied) participating in the scheme that there should be reciprocity of obligation and benefit amongst the covenantors. This intention may be inferred from the circumstances and need not be embodied in an express agreement. This has been clear since Renals v Cowlishaw63 where Sir Charles Hall V-C said: ‘[I]t may I think be considered as determined that anyone who has acquired land, being one of several lots laid out for sale as building plots, where the court is satisfied that it was the intention that each one of the several purchasers should be bound by and should, as against the others, have the benefit of the covenants entered into by each of the purchasers, is entitled to the benefit of the covenant … This right exists not only where the several parties execute a mutual deed of covenant, but wherever a mutual contract can be sufficiently established.’ Similarly, in Nalder and Collyer’s Brewery Co Ltd v Harman,64 Collins LJ said: ‘Where a vendor sells land and retains other land and imposes on the purchaser a covenant, it becomes a question of fact what the effect of that is. That being a question of fact, it must be decided by the light of evidence as are all other questions of fact. But if you find that a building scheme exists, proof of that building scheme may be given. It is only a matter of evidence, and it is perfectly competent to prove by other evidence, if you can find it, whether or not the building scheme applies.’ 59

See the observations of Lord Eldon in Roper v Williams (1822) Turn & R 18: ‘In every case in which the grantor suffers grantees to deviate from a general plan intended for the benefit of all, he deprives others of the right which he had given them to have the general plan enforced for the benefit of all.’; Earl Zetland v Hislop (1882) 7 App Cas 427. As to the limits of such general waiver, see Chatsworth Estates Co v Fewell [1931] 1 Ch 224 at 231–232 (Farwell J). 60 Osborne v Bradley [1903] 2 Ch 446. 61 ‘[I]t is a question of fact whether the restrictions are merely matters of agreement between the vendor himself and his vendees, imposed for his own benefit and protection, or are meant by him and understood by the buyers to be for the common advantage of the several purchasers’, per Wills J in Nottingham Patent Brick and Tile Co v Butler (1885) 15 QBD 261, at p 268 – on appeal, (1886) 16 QBD 778, where this statement was referred to with approval. See also, Sheppard v Gilmore (1887) 57 LT 614; Re Birmingham and District Land Co and Allday [1893] 1 Ch 342 and Nalder and Collyer’s Brewery Co Ltd v Harman (1900) 83 LT 257, CA. 62 Elliston v Reacher [1908] 2 Ch 374; Lawrence v South County Freeholds Ltd [1939] Ch 656. However, a claimant seeing a declaration under section 84(2) of the Law of Property Act 1925 that no building scheme exists must adduce evidence to demonstrate its absence: below, paras 14.23–14.27. 63 (1878) 9 ChD 125, at p 129, approved (on appeal) by the Court of Appeal (1879) 11 ChD 866 and by Lord MacNaghten in Spicer v Martin (1888) 14 App Cas 12, at p 23. 64 (1900) 83 LT 257, at p 259, CA.

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8.25  Competent claimants: (c) building schemes 8.25 If a deed of mutual covenant, duly executed by all participating covenantors, actually existed, then such deed would necessarily: (1) contain particulars of the restrictions imposed by the covenants; (2) identify the parties as between whom the covenants will be enforceable; and (3) show without question that the parties to the deed intended to covenant with each other on a reciprocal basis. In the absence of an actual deed, but individual owners of land are found to have entered into covenants, not (in terms) with each other but with their vendor65 then of the above three elements, the only one which will necessarily be present will be element (1). 8.26 Accordingly, for such covenants to be shown to have been intended to be entered into by identifiable covenantors not only for the benefit of the vendor but also for the mutual benefit of each other, the other two elements (namely (2) the identity of the parties between whom the covenants were intended to be enforceable, and (3) that they intended to covenant with each other on a mutual basis) must be established by further evidence. 8.27 It is not enough that there should simply be owners of land who (or whose predecessors) have entered into covenants with the same vendor (see Wembley Park Estate Co Ltd’s Transfer London Sephardi Trust v Baker and Others,66 cited with approval by the Court of Appeal in Birdlip v Hunter).67 It is also necessary not only that they entered into such covenants but that in doing so they were all to be owners of a parcel of land forming part of a larger area, or estate, which had originally been intended to be disposed of subject to a consistent scheme of covenants amounting to a distinctive pattern of contractual ‘local law’. The area must be defined and the covenants with the estate vendor must have been intended both by him and by the individual purchasers to be mutually enforceable between the various owners for the time being inter se. As Cozens-Hardy MR said in Reid v Bickerstaff:68 ‘[T]here must be a defined area within which the scheme is operative. Reciprocity is the foundation of the idea of a scheme. A purchaser of one parcel cannot be subject to an implied obligation to purchasers of an undefined and unknown area. He must know both the extent of his burden and the extent of his benefit. Not only must the area be defined, but the obligations to be imposed within that area must be defined69 … A building scheme is not created by the mere fact that the owner of an estate sells it in lots and takes varying covenants from various purchasers. There must be notice to the

65 Except in the case of an initial purchase of several plots and their subsequent severance or of the subsequent subdivision of a plot; see above, para 8.22 at (4). 66 [1968] Ch 491. 67 [2017] 1 P&CR 1. The vendor could in such circumstances be disposing of land in two or more completely distinct neighbourhoods or may have disposed of some of his land in the same neighbourhood before deciding to dispose of the remainder on the basis of a scheme – as in Nalder and Collyer’s Brewery Co Ltd v Harman (1900) 83 LT 257, CA. 68 [1909] 2 Ch 305, at 319. 69 Though those obligations need not be identical – for example, as Cozens-Hardy MR pointed out, there may be houses of a certain value in one part and houses of a different value in another part.

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Facts to be proved to establish existence of a building scheme 8.31 various purchasers of what I may venture to call the local law imposed by vendors upon a definite area’. In the case of recently created building schemes, it is more likely than not that direct documentary evidence will be available to establish each of these two elements so that they will not need to be inferred from indirect evidence.70 8.28 However, with older estate developments, there may be little or no direct evidence to show whether the necessary elements existed or not and the question then arises whether there is sufficient evidence of an indirect kind to lead to the inference that the essential elements of a scheme existed.

Two essential elements of a building scheme 8.29 It follows from the above that the two essential requirements for the enforcebility of covenants under a building scheme (in addition to the need for the covenant to contain particulars of the restrictions imposed – item (1) in the list at para 8.25 above) are that: (1) Before any of the covenants are entered into, a defined area of scheme land must be identified which is intended to be sold off subject to a consistent scheme of covenants. (2) There must be evidence of an intention on the part of the vendor and of the individual purchasers that the purchasers’ covenants are intended to be enforceable on a reciprocal basis. 8.30 The reasons for each of these two requirements, was explained by Cozens-Hardy MR in Reid v Bickerstaff 71 in the terms set out above. Buckley LJ explained it in the same case in the following terms: ‘There can be no building scheme unless two conditions are satisfied, namely, first, that defined lands constituting the estate to which the scheme relates shall be identified, and, secondly, that the nature and particulars of the scheme shall be sufficiently disclosed for the purchaser to have been informed that his restrictive covenants are imposed upon him for the benefit of other purchasers of plots within the defined estate with the reciprocal advantage that he shall as against other purchasers be entitled to the benefit of such restrictive covenants as are in turn to be imposed upon them. Compliance with the first condition identifies the class of persons as between whom reciprocity of obligation is to exist. Compliance with the second discloses the nature of the obligations which are to be mutually enforceable. There must be as between the several purchasers community of interest and reciprocity of obligation.’ 8.31 In Jamaica Mutual Life Assurance Society v Hillsborough Ltd72 in 1989 the Privy Council stated that: ‘It is now well established that there are two prerequisites of a building scheme namely: (1) the identification of the land to which the scheme

70 For example, in the shape of recitals in each conveyance or transfer which clearly set out the intention to dispose of a defined area of land subject to a scheme of covenants intended to be mutually enforceable as between the various purchasers. 71 [1909] 2 Ch 305, at p 323, CA. 72 [1989] 1 WLR 1101.

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8.32  Competent claimants: (c) building schemes relates, and (2) an acceptance by each purchaser of part of the lands of the common vendor that the benefit of the covenants into which he has entered will enure to the vendor and to others deriving title from him and that he correspondingly will enjoy the benefit of covenants entered into by other purchasers of different plots is essential’. 8.32 These two requirements were recently affirmed and emphasised by the Court of Appeal in Birdlip Ltd v Hunter.73 Each of these two requirements will be considered in turn.

(1) Before any of the covenants are entered into, a defined area of scheme land must be identified which is intended to be sold off subject to a consistent scheme of covenants 8.33 A defined area of scheme land must be shown to have been intended to be sold off subject to the scheme of covenants before any of the sales off took place.74 8.34 It is not sufficient to satisfy this requirement merely to show that: (i) the vendor owned specific land; (ii) that he sold the whole of such land subject to similar covenants; and (iii) that the resulting development gives the appearance of having been planned as such from the outset. These three features may give rise to a plausible conjecture that there was, from the outset, an intention that the land which the vendor owned was intended by him and the various purchasers to be scheme land but are not sufficient to give rise to a reasonable inference to that effect. 8.35 This is clear from the decision of the Court of Appeal in Reid v Bickerstaff 75 which has already been referred to.76 In that case, a copyhold estate of 64 acres on the outskirts of Liverpool known as the Fairfield Estate was devised by will to trustees upon trust for sale. The following facts were found: (i) Between 1833 and August 1835, the trustees disposed of certain outlying portions of the estate for various different purposes, including a cemetery and a brewery. (ii) In August 1835, they put ‘a considerable portion’ of the estate up for sale by auction in eight large lots and an advertisement in the Liverpool Mercury referred to an office where plans and particulars might be had. No such plans were able to be adduced in evidence. (iii) The auction did not realise any sales but thereafter the whole of the land was sold in plots of suitable size for the erection of one two or three private residences. (iv) From the record of the manorial court rolls, it appeared that restrictive covenants (including a covenant against the erection or use of any buildings otherwise than as private dwelling houses) were imposed on the purchasers 73 [2017] 1 P&CR 1. See, especially, paras 21–23. 74 See Osborne v Bradley [1903] 2 Ch 446 (Farwell J); Tucker v Vowles [1893] 1 Ch 195. 75 [1909] 2 Ch 305. 76 At para 8.30 above

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Facts to be proved to establish existence of a building scheme 8.38 in practically every instance, the only exceptions being two or three narrow strips which appeared to be set out as ways or passages and which were not eligible for building upon. (v) Modern maps showed a wholly residential estate having a defined character albeit the houses consisted of large buildings on one side and workmen’s cottages on the other. (vi) The defendant, whose predecessor in title had, in 1840, purchased a one acre plot and entered into a restrictive covenant with the trustees ‘their heirs and assigns’ not to build other than three dwelling houses on the plot was building thereon substantial commercial buildings including stables for 40 horses and large sheds for vehicles of all kinds. At first instance, Joyce J considered that there was sufficient indication of a building scheme and granted an injunction but on appeal this decision was reversed on the ground that there was no sufficient evidence of a defined area within which the scheme was to operate. In the course of his judgment Kennedy LJ said:77 ‘It is not, I think, improbable that if we knew all the facts in regard to this case as they happened the judgment under appeal would be justified … But we are bound to deal with the case upon the evidence as it stands, and to shun conjecture, however plausible and attractive, by keeping carefully within the bounds of legal inference.’ 8.36 Again, in Tucker v Vowles,78 the court declined to infer the existence of a building scheme relating to the whole of the vendors’ land merely by reason of the fact that they had identified the various plots which they had sold by reference to an estate plan showing the whole area originally owned with the individual plots marked out and had imposed covenants of a kind which were consistent with a building scheme. 8.37 Similarly, in Torbay Hotel Ltd v Jenkins79 a building scheme was unable to be established because of the absence of evidence of a defined area known to all the parties where, although the requisite intention of disposing of freehold land under a systematic policy and subject to a regular system of covenants for the mutual benefit of the purchasers was found to be present, there was no evidence to define the limits of the area over which the mutuality of enforcement was intended to extend.80 8.38 Again, in Re Wembley Park Estate Co Ltd’s Transfer,81 a substantial area of land at Wembley Park was developed as a residential estate by the Wembley Park Estate Co Ltd between the First World War and 1931 when the company went into voluntary liquidation and was dissolved. None of the company’s documents had been traced but the contents of ‘a considerable number of transfers’ of the individual sites showed that they all contained covenants which were in all material respects identical. There was, however, no documentary or

77 78 79 80

Ibid, at pp 326 and 327. [1893] 1 Ch 195. [1927] 2 Ch 225 (Clauson J). The covenants provided for arbitration in any particular case as to the distances within which the mutual obligations should be permitted to operate, but this was held to negative the existence of a defined area rather than to provide the means of ascertaining it. 81 [1968] Ch 491. See, also, Torbay Hotel Ltd v Jenkins [1927] 2 Ch 225 and Osborne v Bradley [1903] 2 Ch 446.

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8.39  Competent claimants: (c) building schemes other evidence either identifying a clearly defined area or any lotting as existing before any sales took place and Goff J held that it was impossible to infer a building scheme from ‘no more than a common vendor and the existence of common covenants’. 8.39 The Privy Council in Emile Elias & Co Ltd v Pine Groves Ltd,82 again affirmed the importance of each of the original purchasers of individual plots being aware, at the time of their purchase, of the precise extent of the defined area. In that case a vendor sold off (in 1938) five lots, lots 1, 2 and 3 to separate purchasers, and lots 4 and 5 to the same purchaser. The plan annexed to each of the conveyances of lots 1, 2 and 3 showed lots 1 to 4 but did not show plot 5. Two plans were annexed to the conveyance of lots 4 and 5, one showing lots 1 to 4 and other showing lot 5. Ten years later, in 1948, the owners of lots 1 to 3 joined as parties to a deed of release releasing the restrictive covenants affecting that plot so as to permit the erection of a house. There was no other evidence to show whether, at the time of their respective purchases, the original purchasers of lots 1 to 3 knew of the existence of lot 5. On this question of fact, the Privy Council held that although the 1948 deed of release was admissible as evidence of whether they were aware, in 1938, that lot 5 was included in the alleged building scheme, it was not sufficiently unequivocal to prove the requisite state of awareness. An additional reason for there being no building scheme was that there was not a consistent scheme of covenants. In particular, whilst the owners of lots 2 and 3 were restricted to using the dwellinghouse to be erected as a private dwellinghouse only, lots 1, 4 and 5 were not so restricted; further, only lots 2 and 3 were subject to a restriction against causing a nuisance to neighbouring occupiers. 8.40 Similarly, in the more recent case of Whitgift Homes Ltd v Stocks83 (where this was acknowledged by the trial judge, Neuberger J, to be a ‘strict requirement’) the Court of Appeal held that there was on the evidence nothing which showed the ‘defined area’ within which any scheme was intended to operate. This also meant the purchaser of any given plot could not know which plots on the estate were within the scheme and which are not so as to know the extent of his burden and the extent of his benefit. Accordingly, it was not possible to find there was a building scheme. 8.41 Even more recently, the Court of Appeal in Birdlip v Hunter,84 which has already been mentioned above,85 emphasised (at para 43) that ‘all buyers of land affected by the scheme must know what that area is’. In almost all the cases in which a building scheme has been found to exist, the area of land to which the scheme applied was ascertainable from the terms of the conveyance or other transactional documents (and conversely where they gave an indication of the land to which the scheme was applied, no scheme was found): see Birdlip at para 25. 8.42 If the conveyance referred to a plan, but the plan has been lost, the court may well infer, however, that the lost plan sufficiently identified the land

82 83 84 85

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[1993] 1 WLR 305, PC. [2001] EWCA Civ 1732. [2017] 1 P&CR 1. See para 8.32.

Facts to be proved to establish existence of a building scheme 8.47 to which the scheme of mutual covenants applied: see In Re 6, 8, 10 and 12 Elm Avenue New Milton86 and Birdlip at para 31. 8.43 The fact there was no map or plan of the affected area in the conveyance itself is not necessarily fatal to the existence of a scheme of mutual covenants if the description of the area to which it applies can be identified by extrinsic evidence: see Birdlip at para 32. By way of example, in Re Dolphin’s Conveyance87 the conveyance contained a number of references to the Selly Hill Estate. Stamp J admitted evidence to identify the extent of the Selly Hill Estate. He said: ‘I find, as a fact, that the references to the “Selly Hill Estate” in the several conveyances by the Dolphins and their nephew, Watts, are references to identified land: identified not in the sense that by looking at the conveyances you could, today, without researches, identify it, because the conveyances contained no plan or description of it, but identified in the sense that a reference in a document to Richmond Park would be a reference to an identified piece of land, notwithstanding the absence of a plan on the document delineating Richmond Park.’ 8.44 However, ‘it is not sufficient that the common vendor has himself defined the area. In order to create a valid building scheme, the purchasers of all the land within the area of the scheme must also know what that area is’: per Lord Browne-Wilkinson for the Privy Council in Emile Elias & Co Ltd v Pine Groves Ltd.88 Not all the land in a development need be the subject of the building scheme so long as the area which is subject to it is defined, so that all buyers of land affected by it know what it is, and indeed, there may be more than one enforceable building scheme created in relation to a large development: see Judge LJ in Whitgift v Stocks at para 111. 8.45 Whether the necessary degree of definition of the area is established is a question of fact (above), though it is clear from cases such as Birdlip and Whitgift Homes that it is one in relation to which the Court of Appeal is not afraid of concluding even experienced judges (such as Neuberger J in Whitgift Homes), have gone plainly wrong so as to give rise to a successful appeal.

Elliston v Reacher: the extent to which there needs to be a ‘common vendor’ and whether lotting of plots is always required 8.46 Assuming that a defined area of land is sufficiently identified to which the common covenants apply, the question arises whether, as a matter of law, any further conditions are required to be satisfied in relation to that defined area. 8.47 In Elliston v Reacher,89 the claimants (or any of them) could only succeed if they could show that a building scheme existed, since the

86 87 88 89

[1984] 1 WLR 1398. [1970] Ch 654. [1993] 1 WLR 305, at p 310. [1908] 2 Ch 374 (Parker J)); affd [1908] 2 Ch 665.

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8.48  Competent claimants: (c) building schemes predecessors in title of the claimants purchased their plots from the estate owner on 27 December 1861 whilst the predecessors in title of the defendants purchased one of the defendants’ plots (and covenanted) on the same date, 27 December 1861, and purchased the other plot (and covenanted) on 19 April 1866.90 In dealing with the question of the existence of a building scheme, Parker J91 expressed his view of the law in the following terms (in a paragraph which has been reformatted here for ease of understanding): ‘I pass, therefore, to the consideration of the question whether the plaintiffs [claimants] can enforce these restrictive covenants. In my judgment, in order to bring the principles of Renals v Cowlishaw92 and Spicer v Martin93 into operation it must be proved: (1) that both the plaintiffs [claimants] and the defendants derive title under a common vendor; (2) that previously to selling the lands to which the plaintiffs [claimants] and defendants are respectively entitled the vendor laid out his estate, or a defined portion thereof (including the lands purchased by the plaintiffs [claimants] and defendants respectively), for sale in lots subject to restrictions intended to be imposed on all the lots, and which, though varying in details as to particular lots, are consistent and consistent only with some general scheme of development; (3) that these restrictions were intended by the common vendor to be and were for the benefit of all the lots intended to be sold, whether or not they were also intended to be and were for the benefit of other land retained by the vendor; and (4) that both the plaintiffs [claimants] and the defendants, or their predecessors in title, purchased their lots from the common vendor upon the footing that the restrictions subject to which the purchases were made were to enure for the benefit of the other lots included in the general scheme whether or not they were also to enure for the benefit of other lands retained by the vendors. If these four points be established, I think that the plaintiffs [claimants] would in equity be entitled to enforce the restrictive covenants entered into by the defendants or their predecessors with the common vendor irrespective of the dates of the respective purchases.’ This statement of the law has figured prominently in all the post-1908 cases on building schemes. 8.48 Nevertheless, the judgment of the Court of Appeal in Reid v Bickerstaff,94 referred to above was delivered after Parker J’s decision and it will 90

Even assuming that it could have been shown that the defendants’ plot which was conveyed on 27 December 1861 was so conveyed before the claimants’ plots were conveyed on the same day, there were neither words of annexation nor any express assignment of the benefit of the covenants affecting that plot to the predecessors in title of the claimants; and so far as concerns the covenants entered into on the purchase of the defendants’ plot which was conveyed on 19 April 1866, such covenants were not expressed to be entered into with anyone other than the vendor. 91 Ibid, at p 384. 92 (1878) 9 ChD 125 and on appeal (1879) 11 ChD 866. 93 (1888) 14 App Cas 12. 94 [1909] 2 Ch 305 – a decision described by Atkinson J in Newman v Real Estate Debenture Corpn Ltd [1940] 1 All ER 131, at p 141B as ‘the last word on this topic’.

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Facts to be proved to establish existence of a building scheme 8.49 be observed that in two respects, the four requirements specified by Parker J in the above extract go further than the two requirements specified by Buckley LJ in Reid v Bickerstaff,95 which have been so often reaffirmed as the important principles and applied. These respects are as follows: (1) the requirement that the claimant and the defendant must derive title under a common vendor; (2) the requirement that prior to any sale, the estate or the relevant part (in which both the claimant and the defendant are interested as owners) must actually have been laid out in lots.96 While the present discussion is concerned primarily with (2) above, it will be convenient to deal here also with (1).

Common vendor 8.49 As to the requirement for a ‘common vendor’, the following observations may be made. (a) If there is a scheme it will crystallise on the first sale being made: see Brunner v Greenslade;97 Birdlip Ltd v Hunter.98 As a matter of principle, it follows from this not only: (i) that the area needs to be defined with sufficient clarity at that time; but also (ii) that so long as there is a common title holder at the start, it would not matter that someone else acquires the remainder of the estate (other than as a scheme purchaser – for example, under a deed of gift) before all the sales have been made. This second point is also clear from the decision of Stamp J in Re Dolphin’s Conveyance99 – provided there was an initially defined estate to which the then owner (or joint owners), A, intended a scheme to apply, and the fact that before all the sales have taken place, B acquired (otherwise than as a scheme purchaser – in the instant case, under a deed of gift) the remainder of the estate and then proceeded with the selling off so that A was the vendor in earlier conveyances and B was the vendor in later conveyances, this will not prevent a building scheme from applying as between all the purchasers, whether from A or from B. In arriving at this conclusion, Stamp J primarily rested his judgment on the broad principle of equity considered above100 which may underlie building schemes, namely, common interest and common intention. Clearly the change in the estate vendor does not exclude the implied intention of each purchaser to covenant with each of the other purchasers where factors exist which link each of the separate vendors with the common scheme.

95 Above. 96 Requirements (3) (relating to the intention of the vendor) and (4) (relating to the intention of the purchasers) do not differ but, though broken down into two, correspond with the second of the essential elements referred to in Reid v Bickerstaff [1909] 2 Ch 305. 97 [1970] Ch 993 at 1003G. 98 [2017] 1 P&CR 1, at para 44. 99 [1970] Ch 654. 100 Above, para 8.13 et seq.

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8.50  Competent claimants: (c) building schemes (b) If, as Re Dolphin’s Conveyance shows, it makes no difference to the overall comprehensiveness of a building scheme that there is a change of estate owner half way through the selling off process, the further question arises whether it would make any difference if there were two different owners of separate parts of the estate from the outset. It is considered not. If X, the owner of 10 acres, and Y, the owner of 12 acres, agreed to treat their combined 22 acres as a comprehensive area of development and laid it out as a single estate for disposal in accordance with an overall scheme of covenants, there would appear to be no sufficient reason for not treating all the purchasers, whether from X or from Y, as subject to one overall building scheme. In this connection, as in case (i) above, the pre-existence of an overall comprehensive scheme before any sales took place should provide sufficient basis for covenants entered into by Xs purchasers with X to be impliedly intended to enure for the benefit of and to be enforceable by not only other purchasers from X but also purchasers from Y and vice versa. The fact that X’s purchasers cannot, in any circumstances, claim the benefit of Y’s purchasers’ covenants by way of succession and vice versa, is not fundamental since that is always the position of the first purchaser from a common vendor and also of subsequent purchasers from a common vendor vis-à-vis later subsequent purchasers. As pointed out above,101 it is one of the effects of a building scheme that it provides an alternative to section 56 of the Law of Property Act 1925 (or its predecessor under the Real Property Act 1845) for enabling original covenants to be made with persons who are not parties to the covenant – and it is submitted that the identification of such persons ought primarily to be made by reference to the limits of the defined estate rather than to the source either of the title or of the express covenant. (c) The identification of a defined area of scheme land will usually carry with it the identification of the former common owner of that land at the time of the scheme. However, in Re 6, 8, 10 and 12 Elm Avenue, New Milton,102 in answer to an argument that there was insufficient evidence of an initial common vendor, Scott J was, on the balance of probabilities, prepared to infer from the similarity of contents of only three later conveyances of properties in Elm Avenue that there had earlier been a common vendor of the Elm Avenue Estate.103

Prior lotting 8.50 As to (2) above, before the decision of Parker J in Elliston v Reacher,104 there had been no case in which the necessity or otherwise for Parker J’s condition as to lotting had been in issue although in all the previous cases where a building scheme had been held to exist, there was in fact a common owner who had laid out the defined area in lots prior to the first sale off. In Nottingham Patent Brick and Tile Co v Butler105 Wills J had stated,

101 102 103 104 105

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See para 8.22 at (1). [1984] 1 WLR 1398. See, ibid, p 1406G. [1908] 2 Ch 374; affd by CA [1908] 2 Ch 665. (1885) 15 QBD 261, at pp 268–269; affd (1886) 16 QBD 778.

Facts to be proved to establish existence of a building scheme 8.51 in a passage which was referred to with approval on appeal to the Court of Appeal: ‘One circumstance which has always been held to be cogent evidence of an intention that the covenants shall be for the common benefit of the purchasers is that the several lots have been laid out for sale as building lots, as in Mann v Stephens,106 Western v MacDermott,107 Coles v Sims,108 or, as it has been sometimes said, that there has been ‘a building scheme’: Renals v Cowlishaw.’109 8.51 It is to be noted that this statement merely refers to one circumstance (thus clearly implying there may be others) and emphasises the evidential character of such circumstance. After the decision in Elliston v Reacher, however, and until the decision of Cross J in Baxter v Four Oaks Properties Ltd,110 the need for satisfying Parker J’s condition as to prior lotting went virtually unchallenged. There was, however, a strong suggestion of a challenge by Clauson J in 1927 in the case of Torbay Hotel Ltd v Jenkins.111 In that case, the facts were as follows: The owners of a fully developed estate – the Cary Estate in Torquay which included the Torbay Hotel – set out to dispose of the estate, as and when sales of the freehold became practicable, by disposing of the freehold under a systematic policy involving the imposition of a regular system of covenants intended to enure for the benefit inter se of all persons who from time to time became owners of part of the estate. Both the plaintiff [claimant] hotel company and the defendant derived their titles from persons who had purchased their properties from the estate owners subject to covenants which included a covenant not to commit a nuisance or annoyance to neighbouring owners. The hotel property had been sold off first and the defendant’s property later and the defendant’s property was being used as a ‘skee ball alley’ in a way which, if the covenant was enforceable by the hotel company would constitute a breach of covenant. In the circumstances, the hotel company could only succeed if a building scheme existed. Since the estate had been fully developed before any sales off took place, there was no prior laying out of the estate in lots of any particular size. But in the course of his judgment Clauson J said: ‘The present is not, of course, the case of a building scheme in the ordinary sense; the Cary Estate owners were not setting out to deal with vacant land and to parcel it out in plots for sale. They had, in or about 1890, an already fully developed estate … It appears to me that the principle as regards the common intention of the parties on which the building scheme cases proceed would apply to the present case, notwithstanding that the circumstances differ from those of the ordinary building scheme.’ But Clauson J went on to hold that there was no building scheme because there was no evidence as to the area within which the burden and benefit of the restrictive covenants was intended to extend. 106 107 108 109 110 111

(1846) 15 Sim 377. (1866) 2 Ch App 72. (1854) 5 De GM&G 1. (1879) 11 ChD 866. [1965] Ch 816. [1927] 2 Ch 225, at p 241.

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8.52  Competent claimants: (c) building schemes 8.52 In Baxter v Four Oaks Properties Ltd,112 the facts were as follows: In 1891, Lord Clanrikarde owned an estate of some 288 acres at Sutton Coldfield known as ‘Four Oaks Estate’. He decided to sell the estate for building development his intention being that the whole estate should be residential but that the minimum cost of the houses to be erected should not be uniform throughout. To carry out his intention, he divided the estate into several parts and a separate deed of covenant was drawn up for each part. The deed of covenant relating to the part with which the case was concerned related to development having a frontage to Lichfield Road (‘the Lichfield Road land’). This deed, which was made between Lord Clanrikarde of the one part and Samuel Hope (the first purchaser of part of the Lichfield Road land) of the other part, contained recitals indicating that it was supplemental to a conveyance of even date to Samuel Hope of part of the Lichfield Road land containing covenants as to building and user (by reference to the contents of schedule 1 of the deed of covenant) and that it was intended that all other persons who might thereafter purchase any of the Lichfield Road land would enter into similar covenants. The operative part contained a covenant by Samuel Hope and every other person who should purchase any part of the Lichfield road land to perform and observe the covenants contained in schedule 1 to the deed and declared that in the event of any breach such covenants should be enforceable by any person for the time being entitled to any part of the Lichfield Road land. In the ensuing 10 years, Lord Clanrikarde sold off the whole of the estate, including the Lichfield Road land, and all the conveyances of parts of this land contained covenants in substantially the same terms as those in the conveyance to Samuel Hope. Apart from Samuel Hope, the deed of covenant was executed by the purchasers of seventeen other parts of the Lichfield Road land, including the predecessors in title of the five claimants and the predecessor in title of the defendant company. Of the five claimants, the last three derived their title through persons to whom Lord Clanrikarde had sold parts of the Lichfield Road land after the covenants had been entered into by the purchaser of the land to which the defendant company was now entitled and it was conceded that those claimants were entitled to the benefit of the covenants entered into by the defendant’s predecessor in title by reason of words of annexation contained in the covenants. The issue in the case therefore revolved around the first two claimants who derived their title from persons to whom Lord Clanrikarde had sold parts of the Lichfield Road land before the sale of the defendant’s land to the defendant’s predecessor in title (and therefore before the relevant covenants had been entered into) and who accordingly could not claim to have acquired the benefit of the covenants through or under Lord Clanrikarde. Further, although such prior purchasers were parties to the deed of covenant, the words of covenant in that deed did not contain any words sufficient to annex the benefit of the covenants to such parties’ land.113 Accordingly, the first two claimants could only succeed if there was a building scheme.

112 [1965] Ch 816. 113 As indicated above, the operative part of the deed of covenant contained a declaration that in the event of any breach, any person for the time being entitled to any part of the Lichfield Road land could enforce the covenants, but although the report is silent on the point, it must be presumed that this provision was regarded as insufficient to bring about annexation. On this

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Facts to be proved to establish existence of a building scheme 8.53 Cross J, after citing the passage in Parker J’s judgment in Elliston v Reacher referred to above, distinguished that case on the point of the need for prior lotting on the ground that it ‘was not a case in which there was direct evidence, afforded by the execution of the deed of mutual covenant, that the parties in fact intended a building scheme’ and held there was a building scheme, with the result that not only the last three claimants but also the first two could enforce the covenants. In the course of his judgment, Cross J, after pointing out that Elliston v Reacher was not a case in which there was direct evidence that the parties intended a building scheme, said:114 ‘The question [in Elliston v Reacher] was whether one could properly infer that intention in all the circumstances. In such a case, no doubt the fact that the common vendor did not divide his estate into lots before beginning to sell it is an argument against there having been an intention on his part and on the part of the various purchasers that there should be a building scheme, since it is, perhaps, prima facie unlikely that a purchaser of a plot intends to enter into obligations to an unknown number of subsequent purchasers. I cannot believe, however, that Parker, J, was intending to lay it down that the fact that the common vendor did not bind himself to sell off the defined area to which the common law was to apply in lots of any particular size but proposed to sell off parcels of various sizes according to the requirements of the various purchasers must, as a matter of law, preclude the court from giving effect to a clearly proved intention that the purchasers were to have rights inter se to enforce the provisions of the common law.’ 8.53 Re Dolphin’s Conveyance115 is another case where Parker J’s prior lotting requirement was not insisted upon. In that case: Without any part of a 30-acre estate known as the ‘Selly Hill Estate’ having been laid out in lots, the greater part of it (part being retained) was sold off to nine different purchasers by conveyances all of which-imposed restrictive covenants on the purchasers in similar terms. In each conveyance the vendors also covenanted that on a sale or lease of any other part of the Selly Hill Estate they would procure a covenant from each purchaser or lessee to the effect of the covenants entered into by each purchaser. Whilst acknowledging that ‘It is trite law that if you find conveyances of the several parts of an estate all containing the same or similar, restrictive covenants with the vendor, that is not enough to impute an intention on the part of that vendor that the restrictions should be for the common benefit of the vendor and of the several purchasers inter se’,116 Stamp J found that having regard to the existence in each conveyance of the vendors’ covenant to procure that every purchaser of a part of the estate should enter into similar restrictive covenants ‘what was intended, as well by the vendors as the several purchasers, was to lay down what has been referred to as a local law for the estate for the common benefit of all the several purchasers of it’117 and concluded that

point, compare the decision of HH Judge Rubin (sitting as a High Court judge) in Shropshire County Council v Edwards (1982) 46 P&CR 270, considered above, para 6.12. 114 Ibid. 115 [1970] Ch 654 (Stamp J). 116 Ibid, at p 661E. 117 Ibid, at p 662A.

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8.54  Competent claimants: (c) building schemes a building scheme arose ‘not by the effect of an implication derived from the existence of the four points specified by Parker J, or by the implication derived from the existence of a deed of mutual covenant, but by the existence of the common interest and the common intention actually expressed in the conveyances themselves’.118 8.54 In Whitgift Homes Ltd v Stocks,119 Judge LJ in the Court of Appeal accepted (in para 111) that following Baxter v Four Oaks Properties Ltd (above) ‘It is no longer necessary to establish that the area covered by the proposed scheme has been divided into plots’. This is notwithstanding ‘the emphasis on the need for definition of the area subject to the scheme remains unchanged’. 8.55 The upshot of the foregoing is that Parker J’s condition (1) in Elliston v Reacher (above) is not of universal application whilst his condition (2), in so far as it specifies the need for prior lotting of the defined area, is subject to the qualification that such lotting is merely one ingredient towards establishing the requisite intention that the covenants relating to the defined area shall be for the common benefit, and is not an essential ingredient where there is other satisfactory evidence of such intention.

(2) There must be evidence of an intention on the part of the vendor and of the individual purchasers that the purchasers’ covenants are intended to be enforceable on a reciprocal basis 8.56 This second element of building schemes, as referred to in Reid v Bickerstaff, was subdivided by Parker J in Ellison v Reacher into conditions (3) and (4) (at para 8.22 above) relating to the intention of the vendor (condition 3) and of the purchasers (condition 4) respectively. These two conditions correspond with the second of the building scheme essential elements enunciated by the Court of Appeal in Reid v Bickerstaff.120 8.57 An ideal way of establishing this duality of intention is by reference to an actual deed of mutual covenant to which the vendor and all the purchasers from time to time are parties and which sets out in clear terms that the purchasers covenant with the vendor and with each other.121 8.58 An equally sound method would be by reference to a clearly expressed declaration of intention contained either in the individual conveyances or transfers by the estate owner to the purchasers or in a separate document to which all such persons are parties.122 The cases to which attention will now be directed, however, are concerned with the question as to when the requisite intention can be inferred from indirect evidence.

118 119 120 121 122

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Ibid, at p 664D. [2001] EWCA Civ 1732. [1909] 2 Ch 305. As in Mackenzie v Childers (1889) 43 ChD 265. Cases of this type have so far not been considered by the courts. They represent the modern method of ensuring the creation of a building scheme and would appear to provide little scope for successful legal attack.

Facts to be proved to establish existence of a building scheme 8.59 In the first place, it should be observed that the fact that it is found that a large number, or even all, of the conveyances from the estate owner contain covenants in more or less similar terms is not sufficient, by itself, to establish the requisite intention. Something more is required. In Re Dolphin’s Conveyance,123 Stamp J said: ‘It is trite law that if one finds conveyances of the several parts of an estate all containing the same, or similar, restrictive covenants with the vendor, that is not enough to impute an intention on the part of that vendor that the restrictions should be for the common benefit of the vendor and of the several purchasers inter se; for it is at least as likely that he imposed them for the benefit of himself and of the unsold part of the estate alone.’ In that case, however, the further fact that the vendors had, in every conveyance or lease of a part of the estate, covenanted to procure a covenant from each purchaser or lessee of any other part to observe and perform the same stipulations was held sufficient to establish the requisite intention of all parties – and to displace any need for the vendors to have laid out the estate in lots prior to any disposal. 8.59 In Spicer v Martin124 the following facts were found: (i) Spicer (the unsuccessful appellant to the House of Lords) purchased the freehold of a block of seven houses in Cromwell Gardens from the Commissioners for the 1851 Exhibition which were conveyed to him by seven separate conveyances each containing a covenant not to carry on any trade or business but to use the premises as a private dwelling house only. (ii) The seven houses were built on part of a larger site which had been laid out by the Commissioners in accordance with a building scheme. (iii) Spicer granted leases of each of the seven houses to different lessees, each lease containing a covenant on the part of the lessee not to carry on any trade or business but to use the premises as a private dwelling house only. (iv) A block plan was annexed to each lease, including Martin’s (the respondent) showing the sites of all seven houses. (v) During the negotiations for Martin’s lease, Spicer’s solicitors informed him that similar restrictive covenants to those contained in his lease were contained in the leases of the other six houses which had already been granted and Martin was also informed that there was a covenant to the like effect in the conveyance of the premises to Spicer. The House of Lords held that these facts were sufficient to establish the requisite intention, as between Spicer and Martin, that the benefit of the covenant into which Spicer had entered with the Commissioners as part of the building scheme established by them, should vest in Martin so that Martin, as lessee of one of the houses on the building estate could enforce that covenant against Spicer as the freehold owner of the other six houses.

123 [1970] Ch 654, at p 669f. 124 (1888)14 App Cas 12, HL.

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8.60  Competent claimants: (c) building schemes 8.60 A similar case came before the court in Tindall v Castle,125 where the following facts were found: (i) Defined parts of an estate were, in 1875, offered for sale by auction in lots for residential purposes in accordance with plans which showed the layout and type of property intended to be built on the plots. (ii) The particulars and conditions of sale provided that each purchaser of a residential lot would build one dwelling house only thereon. (iii) The defendant purchased two residential lots and a further lot marked ‘lodge’ on the plan and although he did not buy these plots at the auction but by private treaty some 10 years later, he was aware of the estate plans at the time when he bought and his conveyance contained a covenant in the terms referred to above. (iv) In 1890 the defendant began building several cottages on the plot marked ‘lodge’ and the purchasers of some of the other residential plots sought an injunction to restrain him from doing so. (v) The defendant bought knowing that the three estate plans were put forward by the vendor as part of a general scheme with the intention of representing to the purchasers that the plot marked ‘lodge’ would only be used as such. The claimants could only succeed if they could establish a building scheme. North J held that the requisite intention to create a building scheme had been established and granted an injunction.126 8.61 Again, in Nottingham Patent Brick and Tile Co v Butler,127 the following facts were found. (i) In 1865 an estate of about 43 acres was put up for sale by auction in 13 lots. At this sale, only lots 1, 2 and 12 were sold. The remaining lots were sold at various times to different purchasers during 1866 and 1867 including lot 11 which was sold in 1866 to the predecessor in title of the defendant. (ii) Every sale took place subject to the same conditions of sale and each of the purchasers entered into restrictive covenants with the vendors in identical terms, except for lot 13 which, the conditions indicated, would be sold subject to slightly different restrictive covenants. (iii) Since the whole estate was put up for sale by auction and thereafter the whole of the unsold lots were offered for sale, the vendors’ intention to sell the whole of the estate was clearly published. (iv) By reason of (iii), the individual purchasers must have known that the covenants they were required to enter into with the vendors ‘were really intended for the benefit of each of them as against all the rest.128 In the result, the Court of Appeal held that the restrictive covenants entered into by the purchaser of lot 11 could be enforced by the owners of each of the

125 (1893) 62 LJ Ch 555. 126 A similar case may also be found in Nalder and Collyer’s Brewery Co Ltd v Harman (1900) 83 LT 257 where the Court of Appeal found a building scheme to exist although on the facts the defendant was not bound. 127 (1886) 16 QBD 778, CA. 128 Per Lord Esher MR at p 784.

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Facts to be proved to establish existence of a building scheme 8.65 other plots, whether such owners claimed through predecessors who purchased before or after the sale of lot 11. The principles applied in arriving at this decision were explained by Lord Esher MR in the following terms:129 ‘There are two lines of cases to be found in the books. The first is where there has been a sale of part of a property, with no then existing intention of selling the rest, and subsequently there is a sale of another part; Then, as regards the later sale, you cannot look at the conditions of the former sale, you must look only at the conditions relating to the latter sale. The other line of cases is where the whole of a property is put up for sale (not necessarily under a building scheme), but is put up for sale in lots, subject to certain restrictive covenants; then it is a question of fact whether it was or was not the intention that the restrictive covenants should be entered into for the benefit of each of the purchasers as against all the others, and it is a most material circumstance whether the vendor reserves any part of the property for himself. If he does not reserve any part, that is almost if not quite conclusive (unless there is something contradictory) that the covenants which he takes from the purchasers are intended for the benefit of each purchaser as against the others.’ 8.62 In other words, where the vendor, to the knowledge of the purchasers, puts up the whole of his land for sale (by auction in lots, for example) without reserving any part of the property for himself a scheme may readily be inferred because there would be no point in taking restrictive covenants unless they were intended to be mutually enforceable by the purchasers.130 8.63 It should be observed, however, that whilst an intention on the part of the estate owner to dispose of the whole of his land is strong evidence of an intention on his part that the covenants are for the benefit of each purchaser, there may still be such a scheme, where the intention is otherwise overtly manifest, notwithstanding that the estate owner intends to retain part of the estate. This is a matter which is considered further below.131 8.64 Clearly, where there was a manifested intention on the part of the vendor but there is no sufficient evidence that this was, at the time of the sales, brought to the notice of the purchasers,132 independent evidence of the purchasers’ intentions will be required (in order that the ‘purchaser’s intention’ part of the test for mutually enforceable covenants is satisfied as well as that relating to the vendor’s intention).133 8.65 In Tucker v Vowles134 an intending purchaser was shown a plan of a building estate with house lots marked on them, and entered into a written agreement to purchase a plot subject to restrictive covenants that it was only to be used for a private dwelling house, which agreement was on a printed form with handwritten alterations. It was held that he was not entitled as a purchaser to assume that the whole estate was governed by a building scheme merely by the lotting and the inclusion of a restrictive covenant in his written agreement,

129 130 131 132

At p 785. As it was put by the Court of Appeal in Birdlip Ltd v Hunter [2017] 1 P&CR 1, at para 37. Below, para 8.92. For example, where the evidence of the vendor’s intention does not consist of provisions contained in the conveyancing documents. 133 See Emile Elias & Co Ltd v Pine Groves Ltd (1993) 66 P&CR 1, PC, referred to above. 134 [1893] 1 Ch 195.

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8.66  Competent claimants: (c) building schemes which agreement may have been altered in other cases. In other words, there was no sufficient notice to purchasers of such a scheme by reason of such facts. It was not therefore shown from these facts that there was intended to be a scheme of which purchasers were aware (and which was intended by them therefore to apply). 8.66 In White v Bijou Mansions Ltd135 the facts were as follows. By an agreement made in 1886, two vendors named Davidson agreed to sell an estate in Bayswater known as the Shaftsbury House Estate to two purchasers named Daw on terms that the existing buildings would be pulled down, a new road (Palace Court Road) constructed and building leases or subsales would then be made to lessees and purchasers. Each lease or conveyance was required to contain the same six stipulations including a covenant to use the plot leased or conveyed and any building erected thereon as a private residence only. Later in 1886, a subsale of a plot, No 16 Palace Court, was made to Fellows, the predecessor in title of the claimant, who covenanted with the Daws their heirs and assigns in the terms of the six stipulations. In the conveyance, the Daws covenanted with Fellows that every lease or conveyance of any part of the estate would contain (substantially) a covenant in the like terms. The Daws also covenanted with Fellows that they would themselves observe the like stipulations and that they would commence and prosecute all such legal proceedings as should be necessary for compelling the observance and performance of the six stipulations by the owners for the time being of any other part or parts of the Shaftsbury House Estate. In 1890, a subsale of another plot on the estate, No 18 Palace Court, was made to Nicholson, the predecessor in title of the defendant, the conveyance imposing the six stipulations on Nicholson but not containing any covenants on the Daws’ part with Nicholson. The defendant now wished to convert No 18 into flatlets and the claimant sought to restrain him from doing so on the basis that he was entitled to enforce the covenant restricting the user of No 18 to use as a private dwelling house. As an alternative to a claim under section 5 of the Real Property Act 1845 (which failed136) the claimant alleged there was a building scheme. In order to succeed he had to establish not only that there was an original intention on the part of the Daws that the estate should be sold off subject to a consistent scheme of covenants (an intention prima facie manifested by the terms of the 1886 agreement137) but also that there was an intention on the part of the Daws and the various purchasers that such covenants should be mutually enforceable. 8.67 The evidence of such intention was, however, confined to the two conveyances referred to no other conveyances having been put in evidence.

135 [1938] Ch 351, CA. At first instance [1937] Ch 610, Simonds J refused to hear argument on the question whether there was a building scheme on the ground that it had not been pleaded and an application for leave to amend the pleadings was refused. But the Court of Appeal appears to have treated the question as a live issue. 136 As to this claim, see above, para 3.4. 137 See the somewhat similar background situation in Spicer v Martin (1888) 14 App Cas 12, HL.

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Facts to be proved to establish existence of a building scheme 8.68 This was held by the Court of Appeal to be insufficient. In the course of his judgment, Sir Wilfred Greene MR said:138 ‘We have before us two conveyances, and two conveyances only. We know nothing whatever about the other houses on the estate, or the circumstances in which they were sold, whether or not they contained any, and, if so, what, restrictive covenants. The only conveyances which we have being the two in question, it is quite impossible to draw any inference as to any intention on the part of anybody to apply to this estate some common regulations, which would be, and were, brought to the notice of all purchasers in such circumstances that each purchaser was entitled to infer that all other purchasers would be bound by them and was willing to accept the liability towards every other purchaser. It is an aspect of the matter which is very important, in my judgment, that, before one can apply this principle, one must be able to infer from the facts that each purchaser contemplated that he was entering into a liability, not only to his vendor, but also to a number of other persons, which they could all directly enforce against him.’ Since the burden of proof is on the party who seeks to set up the building scheme, it is, of course, for that party to show the requisite knowledge on the part of the purchaser and not for the opposing party to prove such purchaser’s ignorance. 8.68 In contrast to Tucker v Vowles and White v Bijou Mansions, in Eagling v Gardner139 there was an express representation that the same restrictive covenant would apply to other purchasers. The facts of that case were as follows. (i) The owner of the ‘Mimms Hall Estate’ at Potters Bar laid it out in clearly defined lots, each lot appropriated to a dwelling house and garden. (ii) The restrictive covenants entered into by the purchasers on the individual sales of all the plots on the estate – amounting to several hundred – were the same except that in at least one case no covenants were entered into. (iii) The restrictive covenants in each transfer (including that to Mr and Mrs Eagling) were expressed to ‘enure for the benefit of the remainder of the Mimms Hall Estate of the Vendor’. (iv) When Mr and Mrs Eagling called at the vendor’s office on the estate, they saw on the wall a plan of the estate, including the layout in roads and lots, with the position of the houses marked and the vendor’s representative mentioned restrictions and said that the same restrictions would apply to others as well as to Mr and Mrs Eagling. Ungoed-Thomas J held (a) that ‘the remainder of the Mimms Hall Estate’ referred to in each transfer referred to the remainder of the estate sold or unsold and although this could not operate to annex the benefit of the covenants to the land already sold, it showed that the vendor intended them to be for the benefit of all the lots, and (b) that although the provision in the transfer referred to in (iii) might have rung no bell in the consciousness of

138 White [1938] Ch 351 at p 363. 139 [1970] 2 All ER 838 (Ungoed-Thomas J). Despite the obvious similarity, Nottingham Patent Brick and Tile Co v Butler, above, does not appear to have been cited.

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8.69  Competent claimants: (c) building schemes Mr and Mrs Eagling, nevertheless the facts referred to in (iv) above established that they expected that their covenants would enure for the benefit of the other lots. There was therefore a building scheme. 8.69 A case which illustrates proof of the requisite intention on the part of both the estate vendor and the various purchasers in a much more direct way is Baxter v Four Oaks Properties Ltd.140 The facts of that case are set out at para 8.52 above141 and it is only necessary to observe here that the evidence of intention on the part of both the estate owner and the individual purchasers that the covenants entered into by the purchasers of land falling within specific parts of the estate should be mutually enforceable as between the individual purchasers of land within any given part was provided by a series of deeds of covenant relating to different parts of the estate. The deed of covenant relating to the part of the estate in question was executed by the vendor and by the purchasers of 17 different parcels of land within that part of the estate and recited that it was intended that the deed would be executed by ‘all other persons who may be or become purchasers of any lands forming part of’ the relevant part of the estate. The deed then declared that it should be lawful for any purchaser to enforce the covenants entered into by any other purchaser without the vendor’s consent or participation in any action. It is not clear from the report whether the deed was in fact executed by all the purchasers who were intended to execute it but, if not, its contents would necessarily have been brought to the notice of every such purchaser and the intention therein declared associated with such purchasers accordingly. 8.70 In relation to the question whether the purchasers intended that each other’s covenants should be mutually enforceable, it should be noted that the fact that any individual purchaser is unaware of the precise covenants entered into by any other purchaser does not preclude him from intending to get the benefit of the other purchasers’ covenants. It is sufficient, in the words of Parker J’s condition (4), that the individual purchasers ‘purchased their lots … upon the footing that the restrictions subject to which the purchases were made were to enure for the benefit of the other lots’. There is no requirement that they purchased on the footing that any restrictions subject to which the others purchased were to enure for the benefit of their own lots.142 The requisite evidence should accordingly be directed towards whether the original purchasers considered that their covenants would be enforceable by the other purchasers; if so, then that appears to be sufficient to establish an intention on their part to be able to enforce the other purchasers’ covenants. However, if there is no evidence on this point, either extraneous or in any relevant document, then no building scheme can be inferred. 8.71 As has been referred to above, the mere fact that a series of conveyances contains similar covenants is not enough to lead to the inference that a scheme of mutual covenants exists: Re Wembley Park Estate Co Ltd’s Transfer143 and Re Dolphin’s Conveyance.

140 [1965] Ch 816 (Cross J). 141 At pp 132–133. 142 See Eagling v Gardner [1970] 2 All ER 838, per Ungoed-Thomas J at p 846f. 143 [1968] 1 Ch 491; cited with approval by the Court of Appeal in Birdlip at para 39.

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Facts to be proved to establish existence of a building scheme 8.76 8.72 Moreover, the content of some covenants may themselves point against the existence of a scheme. An example given by the Court of Appeal in Birdlip144 was those in Lund v Taylor,145 where (at p 177) Stamp LJ said: ‘There are, we think, other difficulties in finding that the stipulations were intended by Tellings to be reciprocally enforceable. The learned judge in the court below took the view that the stipulations were of the sort designed to benefit other purchasers of plots and not the vendors or any land retained by them. But of the negative stipulations which are to be found in the known conveyances that directed against the erection of a building ‘except in conformity with plans approved by the vendors or their surveyors such approval not to be unnecessarily withheld’ would, once the estate had all been sold off in parcels, become quite inappropriate. A similar difficulty arises in relation to the stipulation against cutting down or lopping trees “without the permission of the vendors such permission not to be unreasonably withheld” Both these stipulations appear, to us to be designed to apply during the development of the estate to enable the vendors to sell off the several plots to their better advantage’. 8.73 In Birdlip itself, there was in one of the conveyances relied on a requirement to obtain the approval of the Vendor’s Surveyor to building materials, which was said to be ‘for the mutual benefit of all purchasers’. As the Court of Appeal pointed out (in para 41), ‘if all the covenants were intended to be for the mutual benefit of purchasers it is very difficult to see why that covenant alone was so described’. It provided support therefore for the conclusion there was no scheme. 8.74 The existence of an express power to vary covenants is, without more, equally consistent with the presence or absence of a scheme. If there are clear pointers towards the existence of such a scheme, the presence of such a stipulation is not a contra-indication (see Birdlip at para 40). On the other hand, if there are no such pointers, the inclusion of such a stipulation provides support for the conclusion there is no such scheme (see Whitgift v Stocks at para 101; Birdlip at para 40). 8.75 In all the cases considered above in which the claimants succeeded, the evidence by which the requisite intention on the part of the vendor was established was brought to the notice of the individual purchasers and even without any further independent evidence as to the purchasers’ intention, evidence of such notice will generally be sufficient to justify the inference that for their part the purchasers intended to purchase on the same basis (of mutual enforceability) as that on which the evidence shows the vendor intended to sell.146 8.76 Whether the converse is the case may depend upon the circumstances. The fact that a vendor remains silent in the face of it being brought to his notice that the purchasers believe the covenants will be mutually enforceable would not necessarily give rise either to the implication that he shares a similar belief or to an estoppel to that effect. However, depending on the precise

144 [2017] 1 P&CR 1 at para 39. 145 (1976) 31 P&CR 167. 146 See the observations of Buckley LJ in Reid v Bickerstaff [1909] 2 Ch 305, at p 323, cited and applied by Ungoed-Thomas J in Eagling v Gardner [1970] 2 All ER 838, at p 846f et seq.

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8.77  Competent claimants: (c) building schemes circumstances the vendor’s silence in the face of knowledge of that belief might be sufficient to draw an inference that he intended a building scheme.147

The evidence by which the requisite facts may be proved 8.77 The cases considered above provide examples of the different sets of facts which have been held sufficient to persuade the court of the existence of the two essential148 elements of a building scheme. In reviewing these cases, incidental reference has also been made to some of the forms of evidence by which such facts were proved but it may be useful to refer collectively to these forms of evidence.

Documentary evidence 8.78 The best evidence clearly consists of a document forming part of the title149 of each purchaser which identifies the estate, refers to the covenants and declares an intention that the covenants shall be mutually enforceable. The document may consist of a deed of mutual covenants which is engrossed but never executed,150 or one which is engrossed and executed by the owner of the estate.151 Or it may form part of one of the original conveyances of a part of the estate and set out details of the two elements in the recitals152 or in the operative part.153 It may, either additionally or exclusively, form part of a contract in common form by reference to which sales of the estate have taken place.154 8.79 Moreover, unlike the position in the case of ad hoc covenants in which no question of a building scheme arises,155 evidence consisting of a layout plan by which an estate was planned before any sales took place and where the subsequent sales are consistent with such layout being followed, may go far to proving the necessary elements.156 In relation to the defined area, it is not 147 In Tucker v Vowles [1893] 1 Ch 195 and Reid v Bickerstaff [1909] 2 Ch 305, the purchasers appear to have assumed that the covenants would be able to be mutually enforced but the evidence on which such assumption was based was equivocal and the vendors were not shown to have had actual notice that the purchasers had so understood the evidence. 148 Whilst other elements have also been considered by the courts from time to time (and to which reference is made above), all the cases show that these two elements represent the irreducible minimum for the establishment of a building scheme. 149 In the sense that the title reveals the existence and contents of the document. 150 As in Elliston v Reacher [1908] 2 Ch 374, although in that case Parker J found that a scheme existed on the basis of indirect evidence independently of the existence of the unexecuted deed of covenant which was not, therefore, relied on as direct evidence. In fact, at p 392 of the report, Parker J considered whether non-execution of the deed indicated a change in the original intention of the vendors but came to the conclusion that it did not. 151 As in Baxter v Four Oaks Properties Ltd [1965] Ch 816 (Cross J). 152 As, for example, in Mackenzie v Childers (1889) 43 ChD 265; Texaco Antilles Ltd v Kernochan [1973] AC 609, PC and Bell v Norman C Ashton Ltd (1956) 7 P&CR 359 (Harman J). 153 As in Texaco Antilles Ltd v Kernochan, above. 154 As, for example, in Nottingham Patent Brick and Tile Co v Butler (1886) 16 QBD 778 and Eagling v Gardner [1970] 2 All ER 838. 155 As to which see Hodges v Jones [1935] Ch 657 (Luxmoore J). 156 See Lund v Taylor (1975) 31 P&C CR 167. It is otherwise where, although there was an original layout plan, it is found that not all the land was disposed of subject to a systematic set of covenants: Tucker v Vowles [1893] 1 Ch 195. Conversely, a layout plan which shows only part of the area of an alleged building scheme will provide no useful evidence except of a negative kind: see Emile Elias & Co Ltd v Pine Groves Ltd (1993) 66 P&CR 1, PC.

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Facts to be proved to establish existence of a building scheme 8.83 necessary that the area should originally have been defined by reference to a plan provided there is an adequate verbal description which is either definitive in itself or can be made definitive by adducing extrinsic evidence.157 A plan has featured in the majority of cases where a building scheme has been found to exist since in most (but by no means all158) cases reliance will have been placed on a layout of roads and plots to show the requisite community of interest – and in the absence of a plan this is usually impracticable. 8.80 Where it is not necessary to rely upon lotting, a general description such as ‘Selly Hill Estate’, as in Re Dolphin’s Conveyance,159 will be sufficient to establish the defined area if there is extrinsic evidence as to what land was understood to be included in that description. 8.81 In order to show consistency of the pattern of restrictive covenants imposed upon the individual purchasers, it is clearly desirable that evidence of the restrictions imposed upon as many of the other purchasers as possible should be available. In some cases, evidence of virtually all the relevant conveyances or transfers has been available, as in Re Dolphin’s Conveyance,160 Re Wembley Park Estate Co Ltd’s Transfer,161 Lawrence v South County Freeholds Ltd162 (although the evidence here was indirect), Emile Elias & Co Ltd v Pine Groves Ltd163 and Reid v Bickerstaff.164 In the latter case, the land involved formed part of a copyhold estate on the outskirts of Liverpool and it was thus possible to produce evidence of all the relevant transactions which occurred between 1833 and 1847 since they had been the subject of surrenders and regrants registered in the court rolls of the manor. 8.82 In White v Bijou Mansions Ltd,165 the only conveyances from the estate owner which were in evidence were those by which the claimant and the defendant’s land had been conveyed to their respective predecessors in title and Sir Wilfred Greene MR found himself ‘quite unable’ to draw the inference that every other purchaser had entered into covenants similar to those contained in the two conveyances.166 On the other hand, in Brunner v Greenslade,167 Megarry J readily inferred that the conveyance to the defendant’s predecessor in title was in similar form to that of the conveyances relating to the two adjoining properties (including the claimant’s property). 8.83 In order to be probative of the intention of the estate vendor and the individual purchasers as at the time of the sales of the lots, it is not necessary

157 Birdlip Ltd v Hunter [2017] 1 P&CR 1, at para 32. 158 Above, para 8.52 et seq. 159 [1970] Ch 654. Stamp J ín that case likened the position with a reference in a document to Richmond Park without a plan, but where this would be a reference to an identified piece of land. The evidence which Stamp J accepted as identifying ‘Selly Hill Estate’ consisted of a plan produced by the town clerk which delineated land which the town clerk stated in his affidavit represented the extent of Selly Hill Estate. 160 [1970] Ch 654 (Stamp J). 161 [1968] Ch 491 (Goff J). 162 [1939] Ch 656 (Simonds J). 163 (1993) 66 P&CR 1, PC – where the contents of the conveyances proved inconsistency of covenants and of the extent of the common vendor’s land thus negativing the existence of a building scheme. 164 [1909] 2 Ch 305 (Joyce J). 165 [1938] Ch 351, CA. 166 In addition, however, there was evidence which pointed the other way. 167 [1971] Ch 993.

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8.84  Competent claimants: (c) building schemes that a document should be contemporaneous with those sales. Thus, in Emile Elias & Co Ltd v Pine Groves Ltd168 the contents of a deed of release which was executed 10 years after the conveyances of the lots containing covenants was held to be admissible evidence of the intention of the parties at the dates of the conveyances. However, as that case shows, the weight to be attached to later documents is limited since the memories of what was intended at the earlier dates may well have dimmed. 8.84 However, in Page v King’s Parade Properties Ltd,169 the fact that, 18 years after the sale of the first plot on the alleged scheme land, the estate vendor made an express assignment of the benefit of the covenants immediately after the sale of another part of the land was held by Goff J to be ‘completely inconsistent with a building scheme’. 8.85 Clearly, documentary evidence to which reference is made in the title is the best way of ensuring that the evidence will not be lost with the passage of time. Provided that such evidence is contained in the same document as that which imposes the original building scheme covenants (normally the original conveyance by the owner of the estate), it should remain on the title notwithstanding that it is more than 15 years old170 and notwithstanding registration of the title.171

Oral evidence 8.86 Apart from any documentary evidence, oral evidence by those who can speak to the relevant facts is also admissible. Thus, in Eagling v Gardner172 each of the claimants, Mr and Mrs Eagling, and a neighbour, gave evidence of their separate visits to the vendor’s office on the estate, when they saw a plan of the estate on the wall showing the layout in roads and lots with the position of houses marked; and this evidence was held sufficient to lead to the conclusion that the plaintiffs bought on the footing that their covenants were to enure for the benefit of the other lots and that this carried with it the consequence that they would also get the benefit of the covenants affecting the other lots. In the course of his judgment, Ungoed Thomas J, when considering another issue, namely whether the vendor intended the covenants to be mutually enforceable, rued the fact that he ‘did not have the advantage of the evidence of the solicitor who acted for the vendor and purchasers’.173 8.87 In Kelly v Battershell,174 the Court of Appeal, in finding that there was no scheme, took into account the evidence of the common lessor that he 168 169 170 171

(1993) 66 P&CR 1, PC. (1967) 20 P&CR 710 (Goff J). Since such document will fall within s 45(1) proviso (ii) of the Law of Property Act 1925. Although in the case of registration care should be exercised to see that all the relevant contents of the conveyance (and not merely the bare covenants themselves) are entered on the register (preferably by the conveyance being sewn up in the Land Certificate). There would clearly be a right to insist on such full entry since although the building scheme provisions would relate to matters of fact their effect is to give increased effect to the bare words of the covenants so that if the latter were extracted by themselves the resulting entry would not represent a fair rendering of the nature of the incumbrance which they create. 172 [1970] 2 All ER 838 (Ungoed-Thomas J). 173 Ibid, at p 843f, although he later found himself able to infer such an intention from all the other evidence. 174 [1949] 2 All ER 830, CA.

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Facts to be proved to establish existence of a building scheme 8.88 had had no intention of carrying out a letting scheme; and in Kingsbury v L W Anderson Ltd175 evidence was given by the estate owner’s predecessor in title in support of an intention to create a scheme which, however, failed on other grounds. Knowledge of a building scheme by the vendor’s solicitor, who is also employed to act for the purchaser, will not be imputed to the purchaser unless, had the purchaser employed an independent solicitor, it would have come to the notice of that solicitor in the course of so acting.176

Relevant factors need to be considered together 8.88 All the evidence, and often a lot of factors, will need to be considered together. Together they may lead to a clear conclusion. The recent case of Birdlip Ltd v Hunter177 in the Court of Appeal provides an example. The facts were as follows. Land in Gerrrards Cross was developed in the early years of the twentieth century, beginning in 1906. The common owners were Messrs Hampton and Moon. The defendant (Birdlip)’s predecessors in title acquired the land it now owned as a result of two conveyances, one dated 3 May 1909 and the other dated 18 April 1910. The defendant and the claimants owned parts of what had been a single plot purchased in 1910. The 1909 conveyance had been copied and transcribed, but the 1910 conveyance existed only in an abstract of title. The 1909 conveyance merely recited an agreement for sale in the most general terms and then conveyed the land described in the parcels clause. It also referred to a plan drawn on the conveyance, but, aside from roadways and a railway line, that plan showed only the land conveyed. The 1910 conveyance was in similar terms. Each conveyance contained similar, though not identical, obligations. Some were positive in nature, and others negative. The positive covenants included the following: (1) to erect and for ever after maintain a close boarded fence ‘of a height and material to be approved by the Vendor’s Surveyor.’ (2) to contribute rateably to road maintenance until it became a public road repairable by the local authority. (3) if footways became damaged by vehicles passing over them, to restore the footway. In the case of the 1909 conveyance this obligation was triggered ‘upon being required by the owner of any lot or lots near or adjoining or by the Vendors.’ In the case of the 1910 conveyance the obligation was triggered ‘upon being required by the Vendors or by the owners of any property near or adjoining’. The negative covenants included: (1) A specified minimum prime cost for any building erected on the land (ie no building below a certain cost to be erected);

175 (1979) 40 P&CR 136 (Browne-Wilkinson J). 176 Rowell v Satchell [1903] 2 Ch 212 at 220 (Swinfen Eady J). See also Halifax Mortgage Services Ltd v Stepsky [1996] Ch 1; affd (on a different basis) (1995) 140 Sol Jo LB 9. 177 [2017] 1 P&CR 1.

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8.89  Competent claimants: (c) building schemes (2) A restriction on the number of dwellings that could be erected on the land, which was the covenant on which the Claimants relied; (3) Restrictions on doing anything which would be ‘a damage or annoyance’ ‘to the Vendors their previous or future assigns or tenants or to the owners of any of the adjoining or adjacent property’; (4) A prohibition on erecting buildings of the land ‘until the plans and elevations thereof shall have been submitted to and approved of in writing by the Vendor’s Surveyor whose fee for such approval … shall be paid by the person by whom the plans are submitted’. In the 1910 conveyance (but not in the 1909 conveyance) this obligation has the added sentence: ‘Such approval is required only for the mutual benefit of all purchasers to prevent depreciation of the property by the erection of unsightly buildings, eg the covering of roofs will be restricted to tiles or best quality green Westmoreland slates’. (5) Each of the conveyances also contained a power to vary the covenants. In the 1909 conveyance this was expressed as the reservation of a right for the vendors ‘to vary these stipulations and restrictions in regard to the remainder of the properties in the neighbourhood’. In the 1910 conveyance it was expressed as a right ‘to vary these stipulations and restrictions so far as regards the other parts of their Estate’. The judge was also shown some 18 other conveyances of land in the area which contained obligations similar (although not identical) to those contained in the 1909 and 1910 conveyances. In addition, the judge considered, and placed heavy reliance on, the contracts for sale of two plots, called lot 38 and lot 116, made in 1908 and 1914 respectively. Each contained an agreement to convey the property ‘described in the Plan on the other side hereof as Lot [38/116] but subject … to the stipulations, restrictions and covenants hereinafter mentioned’. They were substantially the same as those contained in the 1909 and 1910 conveyances. However, the 1914 plan showed only about half the land that was shown on the 1908 plan. Some of the plots shown on the 1908 plan were excluded from the 1914 plan. 8.89 The Court of Appeal (through Lewison LJ) accepted and applied the two legal prerequisites of a building scheme referred to in Reid v Bickerstaff as affirmed in Jamaica Mutual Life Assurance Society v Hillsborough Ltd (above). It concluded that no building scheme had been shown. In doing so, it described the salient points as being that: (a) the verbal descriptions of the parcels conveyed simply defined them by reference to metes and bounds. There was no reference in the parcels clause to any estate of which the land was said to form part; (b) the conveyance plans showed no lots, but showed only the property conveyed; (c) there was no reference anywhere in the conveyances to any other plan; (d) the covenants were expressed to be given, not for the benefit of the land now said to be subject to the scheme, but to a far wider area. There was no hint that the legal effect of the covenants was to be any different as between one part of that area and another. The extent of the land to which the covenants expressly refer could not be identified. The only area of land belonging to Messrs Hampton and Moon which could be identified from 168

Facts to be proved to establish existence of a building scheme 8.89

(e) (f)

(g) (h)

(i)

(j)

the conveyances themselves was that which was contained in the original conveyance to them of 1906. But that was a far smaller area than the area said to be part of the scheme. there was no express provision in the conveyances that the covenants were to be mutually enforceable as between purchasers of different parts of the land belonging to Messrs Hampton and Moon. some of the covenants were positive covenants and very unlikely therefore to have been intended to be enforceable by individual original purchasers, and could not have been enforceable against subsequent purchasers. the two covenants which required the Vendor’s consent were, as Lund v Taylor showed, pointers against the existence of a scheme of mutual covenants. moreover, in the 1910 conveyance, but not in the 1909 conveyance, the requirement to obtain the approval of the Vendor’s Surveyor’s approval to building materials was said to be ‘for the mutual benefit of all purchasers’. But if all the covenants were intended to be for the mutual benefit of purchasers it is very difficult to see why that covenant alone was so described. the covenants themselves included a number of different geographical descriptions: ‘any lot or lots near or adjoining’, ‘properties in the neighbourhood’, ‘adjoining or adjacent properties’, ‘other parts of their Estate’; the stipulations included power for the vendors to vary the covenants.

In the light of these considerations Lewison LJ (for the Court) concluded that no scheme has been established. In relation to extrinsic evidence, he said as follows: ‘I do not think that we were shown any case which binds us to hold that the existence of a scheme can be established purely on the basis of extrinsic evidence, now over a century old. That would, in my judgment, be a very unsatisfactory state of affairs given that the existence of enforceable restrictive covenants is potentially a perpetual interference with the right of successive property owners to do as they please with their own property. Assuming, however, that the existence of a scheme can be proved by such evidence alone it would, in my judgment, require cogent evidence to do so.’ The judge below had found that the scheme was, in effect, created by the standard conditions of sale and the 1908 plan, but the Court of Appeal said the main difficulty with that conclusion was the 1914 plan. Although it formed part of the conditions of sale, the only explicit function of the plan was to identify the lot to be sold. It had no other function within the express terms of the conditions of sale. Purchasers who bought on the basis of the conditions of sale may have seen the plan. It might also be a proper inference that the buyers under the 1909 and 1910 conveyances saw the 1908 plan. But there, the process of inference ended. Lewison LJ went on: ‘As Lord Browne-Wilkinson explained [in Emile Elias & Co Ltd v Pine Groves Ltd,178] what is necessary is that all the buyers of land affected by 178 [1993] 1 WLR 305, at p 310 (as quoted above at para 8.44).

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8.90  Competent claimants: (c) building schemes the scheme must know what that area is. A buyer who bought by reference to the 1914 plan (which depicts part of the land included within the 1908 plan) would have had no idea from the conditions of sale or the 1914 plan what else had been included in the area. Mr Beglan, for the Hunters, said that the 1914 plan was obviously incomplete, and that any purchaser would therefore have made further inquiries. But the argument that a purchaser would have made further enquiries assumes the answer to the very question that needs to be answered. Why would a purchaser make further inquiries unless there were intended to be a scheme of mutual covenants? If there was no such intention then there would have been no need to make further inquiries. The legend on the 1914 plan to the effect that it depicted the “Estate Boundaries” would, in itself, have discouraged a purchaser from making any further inquiries. The form of the 1914 plan is in my judgment a pointer towards the conclusion that no such scheme was intended. The point goes further however. As noted, parts of the land within the red line delineating the Estate in 1908 were excluded from the delineation of the Estate on the 1914 plan. The judge’s thoughts about why that might have happened were in my opinion no more than speculation which went far beyond permissible inference. But even if his speculation about the making of mistakes were right, the fact remains that a purchaser who saw the 1914 plan would have been shown an estate whose boundaries differed from the estate shown on the 1908 plan. If there had been a scheme it would have crystallised in 1906, and although the Vendors may have had power to vary the covenants, they had no power to exclude land from the scheme completely. The existence of two conflicting plans is another strong pointer against the intention to create a scheme.’ The Court accordingly held ‘that the evidence fell far short of what was required to prove the existence of a scheme of mutual covenants; and that the judge was wrong to hold otherwise’.

4 FACTORS WHICH MAY NEGATIVE THE EXISTENCE OF A BUILDING SCHEME 8.90 Where facts are established which, taken alone, support a prima facie case for the existence of a building scheme there may nevertheless be other facts which (depending on the strength or otherwise of the evidence in support of a scheme) operate to negative the existence of a scheme either generally or in relation to any particular parcel of land, and all the facts must be considered together.179 Some of the factors which may tend to negative the existence of a building scheme can be seen from the case of Birdlip (see above). Others may include the following.

1 One or more purchasers from the estate vendor unaware of vendor’s intention to create a building scheme 8.91 Where it is shown that one or more purchasers from the estate vendor were, at the time of their purchase, unaware of the vendor’s intention to create 179 (1900) 83 LT 257, at p 259.

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Factors which may negative the existence of a building scheme 8.94 a building scheme, this may either negative the existence of a building scheme altogether, as in Osborne v Bradley,180 or in particular circumstances may lead to the conclusion the building scheme (as explained by the Court of Appeal in Birdlip at para 96) did not include the land in question, as in Nalder and Collyer’s Brewery Co Ltd v Harman181 where land sold off prior to the auction of the land subject to the scheme, with no reference to any scheme, was found not to be included within it even though the auction plan included the whole of the estate including the land previously sold off. In Reid v Bickerstaff,182 where Cozens-Hardy MR considered it to be a factor against the existence of a building scheme that: ‘There is nothing to shew that the purchaser of 1840 [the defendant’s predecessor in title] was aware that any of the earlier purchasers had entered into restrictive covenants of any kind, or that the purchasers of 1843 and 1846 [the claimants’ predecessors in title] were aware of the covenants entered into in or prior to 1840.’

2  Retention of land by the estate vendor 8.92 Where the estate vendor indicates an intention to reserve to himself some part of the defined area, then this imposes a heavier burden on the propounder of the building scheme in relation to establishing the requisite intention on the part of the vendor: ‘… it is a most material circumstance whether the vendor reserves any part of the property for himself. If he does not reserve any part, that is almost if not quite conclusive (unless there is something contradictory) that the covenants which he takes from the purchasers are intended for the benefit of each purchaser as against the others.’183 But the mere fact that, when the estate is put up for sale, purchasers are found for only part of it, will be of little consequence where there is no evidence that the vendor intended to retain part of the estate.184

3 Power reserved to the estate vendor to release or vary the scheme covenants 8.93

Two types of power fall to be considered.

8.94 First, a power to consent to a particular purchaser to depart from the terms of the covenants as in Webb v Fagotti Bros.185 In that case, Vaughan

180 [1903] 2 Ch 446 (Farwell J), at p 455. An additional ground for there being no building scheme in this case was that there was no clearly defined scheme area. 181 (1900) 83 LT 257, CA. 182 [1909] 2 Ch 305, CA, at p 321. Out of the three judgments, Elliston v Reacher was referred to only by Kennedy LJ. 183 Per Lord Esher MR in Nottingham Patent Brick and Tile Co v Butler (1886) 16 QBD 778, at p 785. 184 Per Lord Esher MR in Nottingham Patent Brick and Tile Co v Butler (1886) 16 QBD 778, at pp 784–785. 185 (1898) 79 LT 683, CA.

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8.95  Competent claimants: (c) building schemes Williams LJ expressed the view that such a provision was ‘very unwholesome in building schemes’186 and this has since been interpreted as meaning that the inclusion of such a provision may be some evidence against a building scheme.187 However, as the Court of Appeal pointed out in Birdlip, it depends on the circumstances. As it pointed out (and as already referred to above): ‘Considered in isolation such a provision is equally consistent with the presence or absence of a scheme. If there are other clear pointers towards the existence of a scheme of mutual covenants, then the presence of such a stipulation is not a contra-indication. On the other hand if there are no such clear pointers, the inclusion of such a stipulation provides support for the conclusion that there is no scheme: Whitgift Homes Ltd v Stocks at [101].’ 8.95 Second, there may be a more radical power entitling the vendor to dispose of parts of the estate free from the scheme covenants. In Osborne v Bradley,188 Farwell J expressed the view that an intention to create a building scheme incorporating covenants which reserved to the vendor the right of waiving or varying any of them with regard to any of the unsold lots was too far-fetched to be conceivable.189 However, in upholding, on appeal, the decision of Parker J in Elliston v Reacher in which a building scheme was found to exist notwithstanding that the vendor had a similar power, Farwell LJ said190 that he never intended to suggest, in Osborne v Bradley, that such a power was fatal to the existence of a scheme but merely that it was one element to be considered in arriving at the conclusion of fact whether there was or was not a scheme. 8.96 In Re Wembley Park Estate Co Ltd’s Transfer,191 a provision was included in a standard form of transfer imposing stipulations, reserving to the vendors ‘the right to sell dispose of or otherwise deal with any land for the time being remaining unsold, either subject or not subject to the above stipulations contained, or any of them’. Goff J, after referring to Farwell J’s and LJ’s observations said:192 ‘In any case, however, in my judgment such a general provision has very little weight and, indeed, one may use it to found an argument either way’. 8.97 In Re 6, 8, 10 and 12 Elm Avenue, New Milton,193 Scott J expressed the view that a provision in a schedule of stipulations and provisions imposed upon each purchaser that they ‘shall not be binding on the Vendor and he shall be entitled to alter or vary the same’, far from being inconsistent with

186 Ibid, at p 685. Vaughan Williams LJ gave as his reason that it enabled the estate vendor to say to a purchaser: ‘You must buy this permission whenever you want it’. 187 See the observations of Goff J in Re Wembley Park Estate Co Ltd’s Transfer [1968] Ch 491, at p 498C. 188 [1903] 2 Ch 446, at p 455. 189 Referred to by Williams LJ in Hooper v Bromet (1904) 90 LT 234 at 237 (left column). 190 [1908] 2 Ch 665, at p 674. Cozens-Hardy MR expressed a view to the like effect at p 672, adding: ‘… out of many building schemes which I have seen I think I am right in this remark, that it is altogether exceptional not to see some power reserved to the vendor to abstract certain property from the scheme’. 191 [1968] Ch 491. 192 Ibid, at p 498G. 193 [1984] 1 WLR 1398 (Scott J).

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Factors which may negative the existence of a building scheme 8.100 the establishment of a building scheme ‘points towards the establishment of a building scheme because if there were not a building scheme such provision would not be necessary: the vendor would have full power, on any subsequent sale of other plots in the estate, to alter or vary the restrictions as he chose without such special power so to do’. It appears, however, that none of the earlier cases, referred to above, turning on this point was referred to or cited.194 8.98 The existence of a dispensing power entitling the estate vendor to vary or depart from the scheme covenants would clearly not be inconsistent with the concept of reciprocity which underlies building schemes if the vendor were required to exercise the power for the benefit of the estate as a whole rather than for the vendor. Where, however, as in all the above cases, the provision containing the dispensing power is silent as to the principles upon which the power is to be exercised, it would seem that there is no restraint on the manner of exercise and that the vendor ‘can do it according to his own pleasure and without regard to the rights of any other person interested in this estate’.195 8.99 Although not involving a dispensing power by the estate vendor, it may not be out of place to mention here the Lands Tribunal decision in Re Campbell’s Application,196 the facts of which were that in 1947 the estate vendor (the Earl of Stadbroke) conveyed a double-sized plot (comprising a woodland area) as an adjunct to an existing plot on which a house had been built, subject to a restriction which prohibited any building (other than summer houses and greenhouses) and confined the use to garden land for the house. On an application by the covenantor under section 84(1)(a) and (c) of the Law of Property Act 1925 for modification to permit the construction and use of three dwelling houses on the double-sized plot, the Tribunal concluded that, whilst the objectors (owners of neighbouring houses) were entitled to enforce the covenant on the footing of a building scheme, they could only do so in a manner which was consistent with the overall scheme and since the double-sized plot could, consistently with the trend of development permitted by the scheme elsewhere on the estate, be developed by constructing two houses, they would not be injured by a modification which permitted two houses of a suitable value – and an order permitting two houses was made. 8.100 In none of the cases referred to above involving schemes which included a dispensing power197 was there any suggestion of the power being exercised during the course of the initial disposal of the scheme land. In cases

194 The case before Scott J was an application under s 84(2) of the Law of Property Act 1925 in which none of the respondents appears to have been represented. But see also Allen v Veranne Builders Ltd [1988] NPC 11, where after argument Browne-Wilkinson V-C took a similar view. 195 This was the decision of Luxmoore J in Pearce v Maryon-Wilson [1935] Ch 188, at p 191. For the purposes of the case, it was assumed that there was a building scheme and that the claimant would be injured by the exercise of a power to consent to a departure from common covenants not to use any building erected on any plot otherwise than as a separate private dwelling house. The case involved a leasehold scheme where the power to consent was vested in the lessor, but the decision would seem to apply a fortiori to a freehold scheme where the vendor’s legal position would be even more remote from the individual purchasers. See, also, Whitehouse v Hugh [1906] 2 Ch 283, CA and Sidney v Clarkson (1865) 35 Beav 118. 196 (1958) 9 P&CR 425. 197 See also Bell v Norman C Ashton Ltd (1956) 7 P&CR 359 (Harman J), at p 364; Mayner v Payne [1914] 2 Ch 555; Whitehouse v Hugh [1906] 2 Ch 283, CA.

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8.101  Competent claimants: (c) building schemes where it is so exercised, the fact of the existence of the power might well, in the light of the events which had subsequently happened, point to an initial lack of intention to create a scheme so as to prevent it from coming into existence.198 It may be mentioned that where the dispensing power is reserved in favour of ‘the vendor’, the question whether this means only the original vendor or extends to other persons is a question of construction.199

4 The inclusion of a covenant by the vendor with each purchaser to enforce the covenants entered into by the other purchasers 8.101 Where there is clear evidence of a building scheme, the inclusion of such a covenant will not negate the scheme but will provide an alternative method of securing enforcement. Where, however, the evidence is less than clear, the presence in a conveyance or transfer to a purchaser of such a covenant will tend to negative an intention that the purchaser was to have any direct right to enforce – and thus remove the required element of reciprocity. 8.102 Such a covenant appeared in one of the two conveyances which (alone) were in evidence in White v Bijou Mansions Ltd,200 where Sir Wilfred Greene MR said: ‘I may add that, when one looks at Mr Fellows own conveyance, it bears on the face of it, so far as it is permissible to look at it for this purpose, what seems to be a very clear indication that it was not the intention of anybody that Fellows should be entitled to enforce these covenants direct, because the conveyancing machinery adopted is one under which the vendors agreed on subsequent sales to take covenants from the purchasers, and to enforce those covenants at the instance of Mr Fellows. That was a special provision which Mr Fellows got put into his conveyance, and which does not appear in Mr Nicholson’s conveyance. That appears to me to be inconsistent with the view that Mr Fellows was intended to get an independent right himself to sue subsequent purchasers on the footing that the original agreement was a sort of code that was going to be brought to the notice of all such purchasers.’

5 The making by the former estate owner of an express assignment to one of the purchasers of the benefit of the covenants entered into by the other purchasers 8.103 In Page v King’s Parade Properties Ltd,201 the making of such an express assignment to a purchaser of part of the alleged scheme land,

198 See A-G and London Property Investment Trust Ltd v Richmond Corpn and Gosling & Sons (1903) 89 LT 700. 199 See Bell v Norman C Ashton Ltd (1956) 7 P&CR 359; Maynor v Payne [1914] 2 Ch 555 and below, para 11.81 et seq. 200 [1938] Ch 351, CA. The facts and decision are set out at 8.68–8.69 above. 201 (1967) 20 P&CR 710 (Goff J).

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Registration of building scheme obligations under the legislation 8.106 18 years after the earliest sales of other parts of the land, was held by Goff J to be ‘completely inconsistent with a building scheme’.

5 REQUIREMENTS FOR REGISTRATION OF BUILDING SCHEME OBLIGATIONS UNDER THE LAND CHARGES ACTS, 1925 AND 1972 AND, IN THE CASE OF REGISTERED LAND, UNDER THE LAND REGISTRATION ACTS 1925–2002 1  Unregistered land 8.104 Prior to 1 January 1926 when the Land Charges Act 1925 came into operation, the sole test for determining whether an equitable interest in land was binding upon a subsequent purchaser of a legal estate or legal interest in that land was the test of whether the purchaser had notice, in the equitable sense, prior to his acquiring the legal estate.202 8.105 This principle was of general application regardless of the type of equitable interest involved. Accordingly, whatever particular type of equitable interest is involved in the context of pre-1926 building scheme obligations, the test for the running of the burden would be the same, namely that the burden would run against every owner of scheme land except a bona fide purchaser of the legal estate for value without notice, actual or constructive. In the case of pre-1926 building scheme obligations it is accordingly of no consequence, in the present context, whether the burden created by those obligations consists exclusively of the burden of: (a) (b) (c) (d)

express covenants operating under the rule in Tulk v Moxhay;203 implied covenants operating under that rule;204 an equity based upon community of interest;205 or an equity in the nature of a ‘quasi negative easement’ different from the ordinary Tulk v Moxhay type of interest.206

8.106 The position in this respect has, however, been altered in the case of post-1925 building scheme obligations by the need to comply with the provisions of the Land Charges Acts 1925 and 1972, so far as those provisions are applicable which, in turn, requires careful consideration to be paid to the nature of the equitable burden which arises under such schemes. Further, and in anticipation of it being demonstrated that there is a need to consider what, if any, steps require to be taken under those Acts in the case of post1925 building scheme obligations,207 the question arises as to precisely when building scheme obligations arise. This is relevant not only to the question whether such obligations are (having regard to the date of their creation) registrable at all, but also if they are registrable, the moment when they fall to be registered. 202 Re Cox and Neve’s Contract [1891] 2 Ch 109; Re Nisbet and Potts’ Contract [1906] 1 Ch 386; Nottingham Patent Brick and Tile Co v Butler (1886) 16 QBD 778. 203 Above, para 8.3 et seq. 204 Above, para 8.6 et seq. 205 Above, para 8.13 et seq. 206 Per Warrington LJ in Kelly v Barrett [1924] 2 Ch 379, at p 405. 207 As to which, see below, para 8.112 et seq.

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8.107  Competent claimants: (c) building schemes

The date when building scheme obligations arise 8.107

There are a number of different situations to be considered.

Case 1 8.108 Where the intention to create a building scheme is manifest from the outset, then as soon as the first parcel of scheme land is conveyed or transferred to a purchaser who enters into the scheme covenants, the building scheme crystallises by the purchaser’s land becoming subject to the scheme covenants which he expressly enters into and the remainder of the estate becoming subject (in the absence of an express covenant208 or of an expression of intention to the contrary209) to an implied covenant on the part of the vendor to observe the like covenants in respect of the retained land and to exact scheme covenants from subsequent purchasers.210 In this situation, it becomes immediately apparent that the whole of the estate simultaneously becomes subject to the scheme covenants: as to the first purchaser’s land by virtue of the express covenant in his conveyance and as to the remainder of the estate by virtue of the implied covenant on the part of the vendor. Accordingly, if the date when such a building scheme crystallised was prior to 1926, no registration of any of the restrictive covenants will at any time have been required.211 Conversely, if that date was after 1925, then the question of registration (dealt with separately below) needs to be considered.

Case 2 8.109 As in Case 1 above, but subsequently the remainder of the estate is sold off to various purchasers each of whom enters into the scheme covenants. Clearly, the question whether there is any need to register any of these covenants will depend, in each case, upon whether completion of any particular sale took place before 1926 or afterwards since the date of completion will be the date of creation of these further covenants.

Case 3 8.110 Here, the intention to create a building scheme is manifest from the outset but the common form of conveyance or transfer to the various purchasers contains a provision excluding any implied covenant on the part of the vendor to observe the scheme covenants in relation to the unsold land (whether or not also excluding the implied covenant to exact such covenants from future purchasers212). In this case, the scheme covenants will be created in

208 As, for example, in Nicoll v Fenning (1881) 19 ChD 258. 209 As in Re 6, 8, 10 and 12 Elm Avenue, New Milton [1984] 1 WLR 1398 (Scott J). See, further, above, para 8.97. 210 Re Birmingham and District Land Co and Allday [1893] 1 Ch 342; Mackenzie v Childers (1859) 43 ChD 265; Nicoll v Fenning (1881) 19 ChD 258, per Bacon V-C at p 266. 211 Since restrictive covenants entered into after 1925 only are registrable: Land Charges Act 1972, s 2(5), re-enacting Land Charges Act 1925, s 10(1), Class D(ii). 212 As in Re 6, 8, 10 and 12 Elm Avenue, New Milton [1984] 1 WLR 1398 (Scott J), where there was a provision in the common form of conveyance that ‘The scheme of roads, buildings, lands

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Registration of building scheme obligations under the legislation 8.113 relation to any particular part of the estate only as and when parts are sold off and the individual purchasers enter into covenants (there being no pre-existing implied covenant on the part of the vendor). In this case it would appear that if the selling off process straddled the pre-1926 and post-1925 periods, then the equitable doctrine of notice would clearly apply to the covenants derived from the pre-1926 completed sales and the question of registration would arise in respect of the covenants derived from the post-1925 completed sales.

Case 4 8.111 Regardless of whether the last parcel of land on the estate was sold off before 1926 or afterwards, additional sets of building scheme obligations may arise in two cases, namely: (1) where an original purchaser (or his successor in title) of two or more plots subsequently sells (or otherwise disposes) of them to different persons. This creates new obligations as between the vendor and such new owners213 and if such new obligations arise after 1925, gives rise to the question whether there is any need to protect them by registration; (2) where in relation to any two or more plots, the original building scheme obligations are extinguished by merger on the occasion of the same person acquiring the ownership of such plots, then on the subsequent severance thereof into separate ownership, new obligations will similarly arise as between the vendor and such new owner or owners.214 Again, if this happens after 1925, the question of the need for registration similarly arises. 8.112 Do building scheme obligations which arise after 1925 require protection under the Land Charges Act in order to be enforceable against a subsequent purchaser of a legal estate in the land affected? Assuming that it is established that any given building scheme obligations have arisen since 1925, then the question arises whether such obligations require to have been (or to be) protected by registration under the Land Charges Act 1925215 or the Land Charges Act 1972 in order to be binding upon subsequent purchasers of a legal estate in the burdened land. In order to deal with this question, it is necessary, to consider each of the above four cases in turn.

The position in relation to Case 1 8.113 The express restrictive covenants and the implied restrictive covenants are as follows. (a) The express restrictive covenants entered into by the first purchaser.

and other matters as shown on the said plan and the building and other restrictions imposed upon the Purchaser shall not be binding on the Vendor and he shall be entitled to alter or vary the same’. 213 Brunner v Greenslade [1971] Ch 993, considered at some length above, para 8.15 et seq. 214 As in Texaco Antilles Ltd v Kernochan [1973] AC 609, PC, [1973] AC 609. 215 Prior to 29 January 1973 when the 1972 Act came into operation: Commencement Order SI 1972/2058.

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8.114  Competent claimants: (c) building schemes To be enforceable as such against a subsequent purchaser of a legal estate in the burdened land, there seems little doubt that such covenants must have been registered against the name of the purchaser as a Class D(ii) land charge under section 10(1) of the 1925 Act or (as the case may be) section 2(5) of the 1972 Act216; otherwise they will be void against such subsequent purchaser.217 (b) The implied restrictive covenants (corresponding to the purchaser’s covenants) on the part of the vendor relating to the remainder of the estate. If these covenants were expressly entered into, there would be little doubt but that they would require the like protection by registration against the name of the vendor218 in order to bind subsequent purchasers of a legal estate from the vendor. The only question is whether the Land Charges Act definition of a Class D(ii) land charge (restrictive covenants) includes implied restrictive covenants. It is considered that the answer is in the affirmative. In the first place, section 3(5) of the 1972 Act clearly contemplates that land charges may be created otherwise than by instrument,219 and it is none the less true to say of an implied covenant, as of an express covenant, that it is ‘entered into’ as required by section 2(5). Accordingly, it would appear to be open to the first (or any subsequent) purchaser in the present case to register the implied restrictive covenants affecting the whole of the rest of the estate. If, of course, the implied covenants on the part of the vendor are expressly excluded,220 then only the purchaser’s restrictive covenants will be registrable and the registrability of covenants affecting the remainder of the estate will occur piecemeal as and when subsequent sales take place.

The position in relation to Cases 2 and 3 8.114 Whether or not the remainder of the estate for the time being unsold is already subject to the scheme covenants by virtue of an express or implied covenant entered into by the vendor, each subsequent purchaser will (pursuant

216 The wording (although not the layout) of the provisions relating to restrictive covenants in each Act is identical. For convenience, subsequent references will be to the 1972 Act only, which should accordingly be read, in the case of relevant dates prior to the 29 January 1973, as references to the corresponding provisions of the 1925 Act. 217 Land Charges Act 1972, s 4(5). It was assumed by Harman J in Bell v Norman C Ashton Ltd (1956) 7 P&CR 359, at p 364, in a building scheme case involving conveyances executed in 1924, that had the conveyance containing the covenants been executed after 1925, registration under the Land Charges Act would have been necessary to bind the defendant, as a subsequent purchaser. A similar assumption seems to have been made by Atkinson J in Newman v Real Estate Debenture Corpn Ltd [1940] 1 All ER 131 who, however, found that the covenant in question did not require registration since it was a covenant ‘between a lessor and a lessee’ and was thus excluded from the definition of a land charge Class D(ii). 218 Assuming the vendor to be the legal owner of the remainder of the estate. He may be a subvendor (as in White v Bijou Mansions Ltd [1937] Ch 610, where, however, the covenants were pre-1926 and no building scheme was found). Where the vendor is not the legal owner, registration should be effected against the name of whoever is the legal owner: Land Charges Act 1972, s 3(1) and Barrett v Hilton Developments Ltd [1975] Ch 237, CA. 219 The subsection provides that, ‘Where a land charge is not created by an instrument, short particulars of the effect of the charge shall be furnished with the application to register the charge’. 220 As in Re 6, 8, 10 and 12 Elm Avenue, New Milton [1984] 1 WLR 1398. See footnote 209, above.

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Registration of building scheme obligations under the legislation 8.116 to the scheme) enter into express covenants with the vendor to observe the scheme covenants. As has been seen,221 these covenants will enure not only for the benefit of the vendor but also (even though not expressed to do so) for the benefit of all earlier purchasers until, following the sale of the last parcel of land within the estate, there is complete reciprocity of obligation between all the purchasers inter se. But in so far as each individual purchaser’s covenants create new obligations binding upon such purchaser’s land, do the covenants require protection by registration in order to be enforceable against subsequent purchasers?

Express or implied covenants as the basis of enforceability 8.115 If and to the extent that the obligations so created consist of Tulk v Moxhay burdens, ie, restrictive covenant burdens, then they must surely be protected by registration against the names of the individual covenantors as Class D(ii) land charges in order to be so enforceable. In the absence of an express covenant on the part of the vendor himself to undertake such registration as and when sales take place (including the need, where mortgages or other derivative transactions are involved, to apply for priority notices to be registered prior to completion222), it is difficult to see how earlier purchasers could adequately protect themselves since they would be unlikely to be kept informed with the necessary details relating to impending or actual sales.223 In the absence of registration, earlier purchasers could, as against successors (by way of purchase of a legal estate) from later purchasers, still fall back on enforcing the burden of any224 express or implied covenant on the part of the vendor, always assuming that that covenant had been protected by registration, whilst later purchasers would automatically get the benefit of earlier purchasers’ covenants by virtue of the existence of the building scheme;225 but whether the burden of such earlier purchasers’ covenants would run with their land in the hands of subsequent purchasers of a legal estate would again depend upon whether such covenants had been registered as class D(ii) land charges.

‘Wider equity’ as the basis of enforceability 8.116 As has been seen above, however,226 it has been suggested that once a building scheme exists, then although covenants lie at the root of the ‘local law’ provided for by the scheme, the mutual obligations to which those covenants give rise transcend the theory of covenants, express or implied, and take on the shape of a ‘wider equity’ which is not dependent upon the rules of covenant. If and so far as this is a principle which not only exists but is of general 221 Above, para 8.22 at (1). 222 Under the Land Charges Act 1972, s 11. 223 There is no provision in the Land Charges Act 1972 (or its predecessor) prescribing who is to register land charges and it is clear that any person interested may do so. However, in the absence of an express covenant on the part of the vendor, it is thought that there would be no implied obligation on him to register covenants for the benefit of other owners, whether under the doctrine of non-derogation from grant or otherwise, sed quaere; cf Wright v Dean [1948] Ch 686. 224 See Case 1 at 8.113 above. 225 Above, para 8.22, point 2. 226 Above, para 8.13 et seq.

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8.117  Competent claimants: (c) building schemes application, then by definition, the resulting equity is not of the Tulk v Moxhay or Class D(ii) land charge kind and accordingly, unless it is of a kind which falls under one of the other categories of land charge, the running of its burden will be independent of any question of protection under the Land Charges Act. The only other category of land charge into which it might fall is Class D(iii) – ‘an equitable easement, right or privilege over or affecting land created or arising on or after 1 January 1926, and being merely an equitable interest’.227 8.117 Whilst, as has been seen,228 much of the development of restrictive covenants has taken place by analogy to negative easements, since the Land Charges Act makes a clear distinction between restrictive covenants and equitable easements, it is clear that the restrictive covenant as such cannot be registrable as an equitable easement since land charges are required to be registered (and are only protected if registered) ‘in the appropriate register’.229 However, the wider equity arising out of building scheme covenants appears to have a separate existence independent of any contractual nexus. This equity has been judicially described as being in the nature of ‘a quasi-negative easement’,230 and it certainly shares, with the equitable negative easement, the characteristic that it attaches to the land itself and goes with it without the need for any separate assignment. Further, the qualification ‘quasi’, whilst raising doubts whether the equity would qualify as ‘an equitable easement’ proper within the meaning of section 2(5), presents no difficulties in relation to the generic words which follow, namely ‘right or privilege’. On the other hand, the manner in which a quasi (or look-alike) easement or right arises may justify its being treated as sui generis so as not to fall within the land charge category. Thus, in E R Ives Investments Ltd v High,231 an equity in the nature of an easement which arose out of proprietary estoppel was held not to be registrable as a class D(iii) land charge but to be enforceable against a subsequent purchaser of the burdened land on the basis of the ordinary doctrine of notice.232 On the whole, it is considered that if 233 the theory of the wider equity as the basis of mutual enforcement of building scheme obligations, is of general application (as opposed to having particular applications as in the examples referred to in cases 4(1) and (2) at para 8.111 above), then the balance of argument is in favour of treating the resulting wider burdens as not being registrable as land charges but of being dependent for their enforcement against subsequent purchasers of a legal estate upon the doctrine of notice.234 8.118 It may be mentioned that although section 200(1) of the Law of Property Act 1925235 makes provision entitling a purchaser of unregistered land to require a memorandum of any newly-created restrictive covenants or other rights adversely affecting other land comprised in the common title to

227 228 229 230 231 232 233 234 235

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Land Charges Act 1972, s 2(5). Above, para 1.7 et seq. See Land Charges Act 1972, s 4(5). Warrington LJ in Kelly v Barrett [1924] 2 Ch 379, at p 405, a description adopted by Harman J in Bell v Norman C Ashton (1956) 7 P&CR 359, at pp 363–364. [1967] 2 QB 379, CA. This decision was referred to with approval by Lord Wilberforce in Shiloh Spinners Ltd v Harding [1973] AC 691. As to which see above, para 8.13 et seq. As now encapsulated in s 199(1)(ii) of the Law of Property Act 1925, but subject to the provisions of sub-ss (2) and (3). Re-enacting (with minor amendments) s 11 of the Conveyancing Act 1911.

Registration of building scheme obligations under the legislation 8.121 be indorsed on one of the vendor’s title deeds, it is specifically provided by subsection (4)(a) and (c) that this does not affect the obligation to register any restrictive covenant or equitable easement as a land charge.236

Case 4 8.119 Whether, in the above cases, the mutual enforceability of the building scheme obligations is based upon a combination of express and implied covenants on the one hand or on a wider equity based upon mutuality of interest giving rise to reciprocity of obligation on the other,237 there can be no doubt that in the two cases referred to above under Case 4, the decisions have been based fairly and squarely on the principle of the wider equity.238 Whilst the decisions in those cases could probably equally have been arrived at on the basis of implying covenants on the occasion of the subsequent severance of the plots, this would prima facie have resulted in the need for such newly-created implied covenants to be protected by registration as land charges. As has been seen in dealing with Cases 2 and 3 above, however, if it is established that enforceability is based upon the theory of a wider equity, then no such registration would appear to be necessary – or, indeed, possible. 8.120 The question still remains whether, for such new equitable rights (and, more particularly, corresponding new burdens) to arise it would be necessary to show that the restrictive covenant (or covenants) which originally existed in respect of the combined plots had been registered. If the wider equity theory is of general, and not merely specialised, application, then the answer would, in accordance with what has been said above, be in the negative. But assuming that for the original covenant or covenants to bind the burdened land registration was necessary but was not effected, then in so far as the new equitable rights operate to enlarge the scope of the benefit and burden of such original covenant or covenants, such new rights would then seem to depend for their existence upon whether the covenant or covenants in question had been registered.

2  Registered land 8.121 The position where a disposition of registered land takes place following first registration (whether first registration took place before the 2002 Act or afterwards) is governed by section 29 of the Land Registration Act 2002.239 Subject to the specific points made below, it is not necessary to deal separately with the four cases identified above. By section 29, a disposition of a legal estate in registered land for valuable consideration, when registered, has the effect of postponing to the interest under the disposition any interest affecting the estate immediately before the disposition whose priority is not protected at the time of the disposition. The priority of an interest such as a covenant is only protected if it is the subject of a notice in the register (unless it is an overriding interest within Schedule 3 or appears from the register to be excepted from the effect of

236 This subsection was new. 237 As to which see, further, above, para 8.13 et seq. 238 See Brunner v Greenslade [1971] Ch 993 and Texaco Antilles Ltd v Kernochan [1973] AC 609. 239 Formerly by ss 20 and 23 of the Land Registration Act 1925, which operated to like effect.

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8.122  Competent claimants: (c) building schemes registration; and in the case of a disposition of a leasehold interest if the burden is incident to the estate). 8.122 Building scheme obligations (whether viewed as based on express or implied covenants or of a species of new equity), are not even ‘equitable easements’ in the strict sense,240 and will not be overriding interests within Schedule 3 as easements can be.241 Accordingly, in order to be binding on a transferee for valuable consideration of the burdened land, they must be protected by an entry on the register. 8.123 The position of the first registered proprietor is the same:see sections 11 and 12 of the Land Registration Act 2002.

What entry on the register will protect the scheme obligations? 8.124 For the burden of the building scheme obligations to attach to any given plot it is clear that an entry must appear on the registered title of that particular plot.242 On first registration the registrar is required to enter a notice in the register of the covenant (Land Registration Rules 2003, rule 35(1)). Similarly, on the transfer of the whole or part of a registered estate, as the conveyance or transfer to each purchaser will contain the covenants entered into by such purchaser with the vendor, and such transfer will be lodged for registration, the registrar will automatically enter the covenants on each purchaser’s title. The entry will refer to the deed and set out details of the covenants. 8.125 Ideally, the contents of the entry should specifically refer to the existence of a building scheme (identifying the scheme land), thus leaving no doubt as to the scope of the burden protected by the entry. But if only the covenants are reproduced which, in terms, are expressed to be entered into with the vendor only (and not with or for the benefit of the owners of other parts of the estate), the question arises whether the wider effect of such covenants under the building scheme, whether by virtue of implied covenant or independent equity, will be covered by the entry. If, under a building scheme, the purchaser’s covenants are treated as comprising two sets of obligations – one set for the vendor and the other for the other plot owners – then it could be argued that an entry which, in terms, only referred to the first set, did not extend to the

240 Certain of which were held by Scott J to be overriding interests under section 70(1)(a) of the Land Registration Act 1925: see Celsteel Ltd v Alton House Holdings Ltd [1985] 1 WLR 204, reversed by CA [1986] 1 WLR 512, but not on this point. The expression ‘equitable easement’ is generally understood as meaning an interest for which there was, before 1925, a legal counterpart: see E R Ives Investments Ltd v High [1967] 2 QB 379; cf Poster v Slough Estates Ltd [1969] 1 Ch 495. Thus, since there never has been any legal counterpart for equitable building scheme obligations, these obligations, even if exhibiting characteristics simitar to negative equitable easements, would not ordinarily be comprehended by the expression. 241 Whilst virtually any interest is capable of enjoying the status of an overriding interest under Sch 3, para 2 where it belongs to a person ‘in actual occupation of the land’, the land which is occupied must, of course, be the subjective land. For a full account of the running of the burden of restrictive covenants in registered land, see below, para 9.40 et seq. Only special factors affecting building scheme obligations ín registered land are dealt with here. 242 ‘The register’ in s 29 meaning only the register relating to that title and not the global register of all registered titles: AJ Dunning & Sons (Shopfitters) Ltd v Sykes & Son (Poole) Ltd [1987] Ch 287, CA (decided in relation to the equivalent provisions in the Land Registration Act 1925 and the Land Registration Rules 1925).

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Registration of building scheme obligations under the legislation 8.126 second set so that, under section 29, the proprietor would take the land free from the second set – even if he had express notice of the existence of a building scheme. The inclusion in the entry of a reference to the building scheme, or to a document which reveals its existence, is clearly desirable in order to exclude such an argument.

Effects of non-registration 8.126 Clearly, the direct effect of non-registration of the covenant relating to any individual plot is that the covenant could not be enforced against the transferee of that land once registered as proprietor. However, the effects could be wider, first, in undermining the scheme of covenants as a whole by creating gaps in it so that its value, and the benefits that other purchasers believed they were getting in return for entering into the burden of covenants on their own plots, is diminished;243 and second, because if the gaps were together significant enough, they could support an argument for the release of other covenants by the Upper Tribunal on the basis of section 84(1)(a) or (c) of the Law of Property Act 1925.244

243 By what were graphically described by Megarry J in Brunner v Greenslade [1971] Ch 993, at p 1004 as ‘haphazard islands of partial immunity’. 244 As to which, see Chapters 19 and 22 below.

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9 The running of the burden of restrictive covenants

THE NATURE OF THE BURDEN OF A RESTRICTIVE COVENANT 9.1 Apart from its nature as a contractual obligation, a restrictive covenant has no proprietary characteristics which are recognised at common law. At law, therefore, the burden is not enforceable against any person other than the covenantor (and his personal representatives in relation to his assets1). Accordingly, at law, the burden of a restrictive covenant affecting freehold land does not bind subsequent transferees from the original covenantor.2 However, as has been seen in Chapter 1, subject to the covenant satisfying the six basic requirements summarised in para 1.9, it is recognised in equity as an equitable interest in the burdened land.3 9.2 In many respects, the nature of the burden resembles that of an equitable negative easement, but it is not fettered by the compartmentalisation which characterises negative easements, and its potential sphere of operation is limited only by the requirement of being with sufficient certainty, restrictive of the user of land, the burden represents an equitable interest of its own unique kind. It is thus an example of the (former4) capacity of equity to develop new interests in land for which there was no counterpart at law. By at least 1882 when the decision of the Court of Appeal in London and South Western Rly Co v Gomm5 was made, it had become recognised as a fully-fledged equitable interest in the burdened land. 9.3 Leaving aside the requirements of registration under the Land Charges Acts and Land Registration Acts, and the rules made thereunder, the breadth and limits of the restrictive covenant’s prima facie6 enforceability as against a subsequent owner or occupier of that land therefore correspond to those

1 Kennewel v Dye [1949] Ch 517; Yogmin v Heath [1974] 1 WLR 135. 2 Rhone v Stephens [1994] AC 310; Cantrell v Wycombe DC [2009] 1 P&CR 12, at para 10. 3 See London and South Western Rly Co v Gomm (1882) 20 ChD 562, CA. 4 It would appear that since 1925, the capacity of equity to develop new interests is severely curtailed, if not eliminated, by the proviso to s 4(1) of the Law of Property Act 1925. 5 (1882) 20 ChD 562. 6 Subject to the limits of availability of the equitable remedy of injunction, considered in Chapter 13, and, of course, assuming that there is a competent plaintiff entitled to the benefit of the covenant, as to which see Chapters 2–8.

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9.4  The running of the burden of restrictive covenants which apply to non-overreachable equitable interests7 in land generally, though (as will be seen below) subject, in the case of unregistered land, to certain statutory modifications affecting the doctrine of notice which affect a group of equitable interests including restrictive covenants.

THE RUNNING OF THE BURDEN OF RESTRICTIVE COVENANTS WHERE THE TITLE TO THE LAND IS UNREGISTERED 9.4 In view of the radical changes introduced by the Law of Property Act 1925 and the Land Charges Acts 1925 and 1972, it is necessary to consider first the position of restrictive covenants entered into before 1926 (in respect of which no changes were made by those Acts) and then to consider the respects in which the position has been altered in the case of restrictive covenants entered into after 1925.

1  Pre-1926 restrictive covenants 9.5 As the restrictive covenant (where the six requirements referred to at para 1.9 above are met) is an equitable interest in the burdened land, the general equitable rule applies and the restrictive covenant will8 be binding upon every owner and occupier of the burdened land or (so far as it is capable as a matter of construction of affecting any part) any part thereof except a bona fide purchaser for valuable consideration of a legal estate or interest in the land or any part thereof who purchased without notice (in the equitable sense) of the covenant.9 9.6 As a matter of principle, this enables it to be said with accuracy that (subject to the purchaser exception) the burden of a restrictive covenant ‘runs with the land’ (and not merely with an estate or interest in the land) since its binding effect is not limited to successors in title to the covenantor10 or even to successors in title and persons deriving title under him or them. Thus, a squatter who has obtained a title by adverse possession (even though he does not acquire the estate of the former owner – that estate being extinguished11), and his successor (if not a bona fide purchaser without notice) is nonetheless bound by restrictive covenants created before the he obtained title by adverse possession;12 and a mere licensee who has no estate or proprietary interest is likewise bound.13 The position as to the running of the burden is thus more clearcut than that which applies in relation to the running of the benefit of a restrictive covenant when that benefit is annexed to the benefited land.14

7 8 9 10

Ie, equitable interests not arising under trusts. Assuming there to be a competent plaintiff, as to which see Chapters 2 to 8. Now specifically provided for by s 2(5)(a) of the Law of Property Act 1925. As in the case of covenants which ‘run with the land’ for the purposes of s 80(2) and (3) of the Law of Property Act 1925 – see sub-s (4). 11 See s 17 of the Limitation Act 1980, re-enacting s 16 of the Limitation Act 1939, and the observations of Lord Radcliffe in Fairweather v St Marylebone Property Co Ltd [1963] AC 510, at p 535. 12 Re Nisbet and Potts’ Contract [1905] 1 Ch 391; affd [1906] 1 Ch 386. 13 Mander v Falcke [1891] 2 Ch 554; Marten v Flight Refuelling Ltd [1962] Ch 115, at p 122. 14 As to which, see Chapter 6.

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Burden of restrictive covenants where title to land is unregistered 9.8 In the case of the burden, such running is automatically built in but, of course, subject to the exception of the bona fide purchaser for valuable consideration of a legal estate or interest without notice.

When the burden will entirely cease to run 9.7 The only circumstances, therefore (apart from being overridden by statute15), in which the burden of a pre-1926 restrictive covenant will cease to run with the land are where the burdened land is sold to a bona fide purchaser for valuable consideration of the legal estate in fee simple (free from any outstanding estate or interest which is otherwise already subject to the burden of the covenant) who takes without notice (in the equitable sense) of the covenant. The reason for this is the following threefold effect of such a purchase: (1) the purchaser takes free from the covenant as such a purchaser; (2) those claiming through, under or adversely to the purchaser take free from the covenant whether or not they are purchasers and whether or not they purchased the land with notice of the covenant, since otherwise the purchaser without notice would suffer a detriment from the former existence of the covenant in being hampered in subsequently dealing with the land free from the covenant;16 (3) since the legal estate purchased comprehends the entire legal ownership of the burdened land, and at the time of that purchase there was no outstanding legal estate or interest which was itself already subject to the covenant, there is no possibility of the covenant having any continued existence in respect of any other estate or interest in the originally burdened land.

When the burden will partially cease to run 9.8 On the other hand, if the legal estate so purchased consists of a leasehold interest17 or if, although freehold, it is purchased subject to a lease whose lessee was bound by the covenant, then whilst the covenant will cease to be enforceable against the purchaser and those claiming through, under or adversely to him, it will continue to run with the land in the hands of all those claiming through, under or adversely to the other subsisting estates and interests in the land. Conversely, if a purchaser who has notice of a covenant purchases subject to a legal or equitable estate or interest in the land which was created before the covenant was entered into18 or subject to a legal estate whose estate owner purchased without notice, then whilst it will run against the purchaser, it will not run against the owners of such other estates or interests. The effect of a

15 16

17 18

See Chapter 10. Wilkes v Spooner [1911] 2 KB 473, CA. It would appear that the principle of this case would apply even if the subsequent purchaser were a previous owner who was previously bound by the covenant, unless fraud was involved or the property had been sold by him in breach of trust: see ibid, p 483. This was recently reaffirmed by the CA in Independent Trustee Services Ltd v GP Noble Trustees Ltd [2012] 3 WLR 597: see, especially, paras 47 and 89. Wilkes v Spooner, above. John Bros Abergarw Brewery Co v Holmes [1900] 1 Ch 188, 197; King v Dickeson (1889) 40 ChD 596.

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9.9  The running of the burden of restrictive covenants limited purchase may therefore be to create commensurate islands of immunity, but otherwise leaving the burden of the covenant intact.19 9.9 The principles underlying the foregoing were stated by James LJ in Pilcher v Rawlins20 as follows: ‘I propose simply to apply myself to the case of a purchaser for valuable consideration, without notice, obtaining, upon the occasion of his purchase, and by means of his purchase deed, some legal estate, some legal right, some legal advantage; and according to my view of the established law of this Court, such a purchaser’s plea of a purchase for valuable consideration without notice is an absolute, unqualified, unanswerable plea to the jurisdiction of this Court. Such a purchaser may be interrogated, and tested to any extent as to the valuable consideration which he has given in order to show the bona fides or mala fides of his purchase, and also, the presence or absence of notice, but when once he has gone through that ordeal, and has satisfied the terms of the plea of purchase for valuable consideration without notice, then this Court has no jurisdiction whatever to do anything more than to let him depart in possession of that legal estate, that legal right, that legal advantage that he has obtained. In such a case the purchaser is entitled to hold that which, without breach of duty, he has had conveyed to him.’

Requirements if the burden is to cease to run 9.10 In order to qualify for immunity from a restrictive covenant, therefore, the purchaser (or those claiming through, under or adversely to him) would have to show that such purchaser was (a) bona fide, (b) gave valuable consideration, (c) acquired a legal estate and (d) was without notice of the covenant. 9.11 Although divisible into these four elements, when relied upon by a party to proceedings they comprise one composite whole in respect of which the burden of proof lies, in respect of every element, upon that party:21

(a)  Bona fide purchaser 9.12 The requirement of being a bona fide purchaser relates not so much to the character of the transaction of purchase as to the genuineness of the absence of notice, the explanation for this given by Lord Wilberforce22 being that it was the progenitor of the doctrine of constructive notice.23

(b)  Valuable consideration 9.13 Whilst there must be consideration for the purchase, there appears to be no requirement that the consideration must be such as to stamp the transaction 19 Cf Carter v Williams (1870) LR 9 Eq 678. 20 (1872) 7 Ch App 259, at p 268 – referred to as the classic judgment on the subject by Lord Wilberforce in Midland Bank Trust Co v Green [1981] AC 513. 21 See Re Nisbet and Potts’ Contract [1905] 1 Ch 391, at p 402. 22 In Midland Bank Trust Co Ltd v Green [1981] AC 513, at p 528E. 23 In Le Neve v Le Neve (1747) Amb 436, Lord Harwicke said ‘Consider what is the ground of all this … The ground is plainly this:- that the taking of a legal estate after notice of a prior right makes a person a mala fide purchaser …’.

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Burden of restrictive covenants where title to land is unregistered 9.17 as more closely allied to a sale than to a gift. The reason appears to be that the expression is ‘a term of art which precludes any inquiry as to adequacy’.24 The expression is used in the Land Charges Acts 1925 and 1972 (referred to later) without further elaboration and in Midland Bank Trust Co v Green (above) it was held by the House of Lords (reversing the majority decision of the Court of Appeal) to comprehend a sum of £500 paid for a farm worth £40,000. It would seem that the reasoning in this case applies equally to the meaning of the expression as used by equity and that the adequacy of the consideration is not, per se, material. However, it could be a factor in determining whether the purchaser is a bona fide purchaser without notice – an issue which did not arise in the Midland Bank Trust Co case for reasons referred to below.

(c)  A legal estate25 9.14 here.

This is a straightforward question of law which requires no elaboration

If the purchaser takes only an equitable estate, he takes subject to the burden of the covenant, whether he had notice of it or not: see London and SW Railway Co v Gomm.26

(d)  Without notice General 9.15 The equitable doctrine of notice was developed over a period of approximately 200 years in the course of which it emerged from its initial stance of being confined to actual notice and became a highly developed doctrine of actual and constructive notice. 9.16 In 1882, following the extensive reforms in conveyancing and property law introduced by the Conveyancing Acts of 1881 and 1882, the legislature encapsulated the doctrine in the provisions of section 3 of the Conveyancing Act 1882 which applied to all purchases whether made before or after the commencement of the Act and these provisions are now re-enacted (with similar operation) in section 199(1)(ii), (2) and (3) of the Law of Property Act 1925.27 Section 199 applies to purchases whether made before or after the 1925 Act came into force (section 199(4)). 9.17 Section 199(1) of the Law of Property Act 1925 read as a whole provides that: ‘(1) A purchaser shall not be prejudicially affected by notice of— (i) any instrument or matter capable of registration under the provisions of the Land Charges Act, 1925, or any enactment 24 25 26 27

Midland Bank Trust Co v Green, above, at p 531E. Including a legal interest. Cf Law of Property Act 1925, s 1(4). (1882) 20 ChD 562, at p 583. The re-enactment is verbatim, but the definition of ‘purchaser’ in section 1(4)(ii) of the 1882 Act omits the words ‘in good faith’ which appear in the definition of ‘purchaser’ in s 205(1) (xxi) of the 1925 Act.

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9.18  The running of the burden of restrictive covenants which it replaces, which is void or not enforceable as against him under that Act or enactment, by reason of the non-registration thereof;28 (ii) any other instrument or matter or any fact or thing unless— (a) it is within his own knowledge, or would have come to his knowledge if such inquiries and inspections had been made as ought reasonably to have been made by him; or (b) in the same transaction with respect to which a question of notice to the purchaser arises, it has come to the knowledge of his counsel, as such, or of his solicitor or other agent, as such, or would have come to the knowledge of his solicitor or other agent, as such, if such inquiries and inspections had been made as ought reasonably to have been made by the solicitor or other agent. (2) Paragraph (ii) of the last subsection shall not exempt a purchaser from any liability under, or any obligation to perform or observe, any covenant, condition, provision, or restriction contained in any instrument under which his title is derived, mediately or immediately; and such liability or obligation may be enforced in the same manner and to the same extent as if that paragraph had not been enacted. (3) A purchaser shall not by reason of anything in this section be affected by notice in any case where he would not have been so affected if this section had not been enacted.’ Section 199(1)(ii)(a) deals with actual and implied notice and appears to codify the corresponding rules of equity without change. 9.18 Section 199(1)(ii)(b) deals with imputed actual notice and imputed implied notice and again appears to reproduce the corresponding rules of equity as they had been developed before the passing of the Conveyancing Act 188229 save that the equitable rules provide that actual notice of the covenant acquired by the purchaser’s counsel, solicitor or other agent in an earlier transaction may be imputed to the purchaser in a subsequent transaction,30 whereas the section 199(1)(ii)(b) is more restrictive in that only notice of the purchaser’s counsel, solicitor or other agent in the same transaction will do. 9.19 However, this restriction does not apply where the restrictive covenant is contained in a document of title, as section 199(2) provides that section 199(1)(ii): ‘shall not exempt a purchaser from any liability under, or any obligation to perform or observe, any covenant, contained in any instrument under which his title is derived … and such liability or obligation may be enforced in the same manner and to the same extent as if that paragraph had not been enacted.’

28 As to this, see para 9.25 below. 29 See Wyllie v Pollen (1863) 3 De G J & Sm 596, at 634–635, per Lord Westbury LC. 30 See R v Cousins (1886) 31 ChD 671; Taylor v London and County Banking Co [1901] 2 Ch 231; Bateman v Hunt [1904] 2 KB 530; Slack v Hancock (1912) 107 LT 14.

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Burden of restrictive covenants where title to land is unregistered 9.23 Accordingly, where a restrictive covenant is contained in any document dealing with the estate or interest acquired by the purchaser,31 the old equitable rules will apply in full, so that the rule that actual notice of the covenant acquired by the purchaser’s counsel, solicitor or other agent in an earlier transaction may be imputed to the purchaser in a subsequent transaction.32 9.20 If, however, the restrictive covenant was contained in a separate deed, then subsection (2) would appear not to apply with the result that the statutory code as to notice would apply to such a covenant and only knowledge acquired by the agent in the same transaction would do.33 9.21 In no case does the statutory code as to notice enlarge the equitable doctrine, however. This is made clear by section 199(3).

The special position of lessees and underlessees 9.22 Further, in addition to this slight alteration in the equitable doctrine, originally introduced by section 3 of the Conveyancing Act 1882 and now in section 199(1)(ii)(b) of the Law of Property Act 1925, a further alteration was introduced (for the first time) by section 44(5) of the Law of Property Act 1925 in the case of lessees and their assigns. By section 44(2), (3) and (4) of the 1925 Act,34 an intending lessee or underlessee and an intending assign from either, is, under an open contract, not entitled to call for the title of the lessor or underlessor to grant the lease or underlease. This was also the position before 1926, but under the rule in Patman v Harland35 such an intending lessee, underlessee or assign was nevertheless affixed with constructive notice of what he would have discovered had he in fact investigated the title of his immediate lessor and any superior title. He was therefore deemed to have constructive notice of any restrictive covenants affecting such titles. 9.23

However, by section 44(5) of the 1925 Act, it is provided as follows:

‘(5) Where by reason of any of the three last preceding subsections, an intending lessee or assign is not entitled to call for the title to the freehold or to a leasehold reversion, as the case may be, he shall not, where the contract

31 It is immaterial whether the document in question was prior to the root of title or not since actual knowledge of such pre-root title on the part of the agent is involved and notice based on such knowledge would, under the equitable doctrine, always be imputed to the purchaser. This may put a purchaser who employs the same solicitor as the vendor at a disadvantage, since pre-root documents which come into the hands of the solicitor in his capacity as solicitor for the vendor must inevitably come to his notice in his dual capacity. As to the limits of imputed notice where a solicitor acts for both parties, see Halifax Mortgage Services Ltd v Stepsky [1995] 4 All ER 656; affd (on different basis) (1995) Times, 1 December. 32 See Re Cousins (1886) 31 ChD 671; Taylor v London and County Banking Co [1901] 2 Ch 231; Bateman v Hunt [1904] 2 KB 530; Slack v Hancock (1912) 107 LT 14. 33 Compare the position, in this respect, with the corresponding position which applied to a lessee under the rule in Patman v Harland (1881) 17 ChD 353: Carter v Williams (1870) LR 9 Eq 678. Under the statutory code, only knowledge acquired by a solicitor while acting for the client will be imputed. 34 Subsection (2) re-enacting, with slight amendments, the first rule in s 2 of the Vendor and Purchaser Act 1874 and sub-s (3) re-enacting s 3(1) of the Conveyancing Act 1881. 35 (1881)17 ChD 353.

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9.24  The running of the burden of restrictive covenants is made after the commencement of this Act, be deemed to be affected with notice of any matter of thing of which, if he had contracted that such title should be furnished, he might have had notice.’ 9.24 In every case, therefore, unless it could be shown that, at the date of the lease, underlease or assignment the lessee, underlessee or assignee had independent actual or constructive notice of the existence of a restrictive covenant affecting the title of the immediate lessor or any superior title, such covenant could not be directly enforced against the lessee, underlessee or assignee.36 But whether, as a practical matter, the covenant could be indirectly enforced against him might well depend upon whether the covenant was one relating to the freehold or was one contained in superior lease out of which the inferior lease in question was derived. In the former case, there would be complete immunity from the existence of the covenant by virtue of the subsection. But in the latter case, the covenant in the superior lease would almost certainly be reinforced by a proviso for re-entry on breach of covenant and assuming that the conduct of the underlessee otherwise constituted a breach, the immunity of the underlessee from direct liability would not preclude the headlessor from forfeiting, or threatening to forfeit, the headlease which, in turn, would threaten the existence of the underlease. Further, any relief from forfeiture which might be granted to the underlessee under section 146(4) of the Law of Property Act 1925 (or under the general jurisdiction of the court) could be by way of substituting the headlease (pro rata) for the underlease, and consequently thereby ensuring the future binding effect of the covenant.

2 Post-1925 restrictive covenants: the Land Charges Act 1925 and its successor, the Land Charges Act 1972 9.25 Post-1925 restrictive covenants take effect as equitable interests in the burdened land in the same way as pre-1925 covenants.37 Further, they continue to run with the land in the hands of every owner and occupier except a purchaser of a legal estate for valuable consideration without notice. However, the question of whether a purchaser has notice of such covenants or not is taken out of the equitable doctrine of notice (which continues to apply to pre-1926 covenants as slightly modified by the statutory rules contained in section 199(1)(ii) of the Law of Property Act 1925 – see above). The question of notice is instead brought into the provisions of sections 198(1) and 199(1)(i) of the Law of Property Act 1925 coupled with what are now sections 4(6) and 10(4) of the Land Charges Act 1972.38 The result is the retention of the concept of notice for determining enforceability of a post-1925 restrictive covenant against a purchaser of a legal estate but a complete transformation in the meaning of that concept.

36 37 38

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Shears v Wells [1936] 1 All ER 832, where Luxmoore J held that the onus of showing the existence of such notice was upon the plaintiff as the party seeking to enforce the covenant. Law of Property Act 1925, s 4(1). Re-enacting ss 13(2) and 17(3) of the Land Charges Act 1925.

Burden of restrictive covenants where title to land is unregistered 9.28

The doctrine of notice as it applies to post-1925 restrictive covenants39 9.26 By section 2(5) of the Land Charges Act 1972,40 a restrictive covenant41 (other than a covenant or agreement between a lessor and a lessee42) entered into on or after 1 January 1926 is registrable under the Act as a land charge Class D(ii).

The effect of registering a restrictive covenant 9.27 The positive effect of so registering a restrictive covenant is provided for by section 198(1) of the Law of Property Act 1925 which provides: ‘(1) The registration of any instrument or matter in any register kept under the Land Charges Act 1972 or the local land charges register shall be deemed to constitute actual notice of such instrument or matter, and of the fact of such registration, to all persons and for all purposes connected with the land affected, as from the date of registration or other prescribed date and so long as the registration continues in force.’ Accordingly, once a restrictive covenant has been registered as a Class D(ii) land charge or, in the case of a restrictive covenant entered into with a local authority and certain other public bodies, registered as a local land charge under sections l(1)(b)(ii) and 4 of the Local Land Charges Act 1975,43 then subject to one minuscule exception, a plea of absence of actual notice is statutorily excluded. Subject to that exception (dealt with below) a restrictive covenant so registered becomes, in effect, a right in rem enforceable against the whole world.

The position of lessees and their assigns 9.28 In this connection, it would appear, for the reasons indicated below, that lessees and their assigns are as much affected by a registered restrictive covenant as other persons claiming through or under the owner of the burdened land, notwithstanding the provisions of section 44(5) of the Law of Property Act 1925, above. 39

Much of this account of the doctrine of notice applies equally to other ‘land charges’ registrable under the Land Charges Act 1972 or the earlier Act, but since more than 50 per cent of all land charges which are registered consist of restrictive covenants, any problems under the Act are most likely to arise in the context of such covenants. It therefore seems appropriate to deal in this book with the details of the law in so far as they set the doctrine of notice into its proper perspective. 40 Re-enacting s 10(1) of the Land Charges Act 1925. 41 As that expression is used in this book, ie a covenant or agreement ‘restrictive of the user of land’: see above, para 1.11 et seq. 42 This exception applies even though the covenant is one by the landlord which restricts the use of other land of the landlord not included in the lease: Dartstone v Cleveland Petroleum Co Ltd [1969] 1 WLR 1807. The decision in this case has been criticised (eg by the Law Commission in its 1984 report on The Law of Positive and Restrictive Covenants, at para 3, 54–55), but has stood for over 40 years, being treated as good law by Neuberger J in Oceanic Village Ltd v United Attractions Ltd [2000] Ch 234 (though it is to be noted that the position in relation to registered land as there set out has now changed as a result of s 33(c) of the Land Registration Act 2002:see, in conjunction with that, s 12, referred to at para 9.42 below). 43 As to which, see below and Chapter 10.

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9.29  The running of the burden of restrictive covenants This is because of section 198(1) of the 1925 Act, as set out above, and the fact that the only relief from notice which is afforded to a lessee or assign under section 44(5) is as to ‘notice of any matter or thing of which, if he had contracted that such title should be furnished, he might have had notice.’ In the case of an intending headlessee, if he had contracted for the right to investigate the title to the freehold reversion, this title would be limited by the 15-year period provided for by section 44(1), and he would be deemed to have notice of all matters appearing in that title; but this is not the same as giving him notice of whatever matters were registered under the Land Charges Act – the latter extending to matters arising at any time since 1925 and whether or not they would have appeared in the reversioner’s title deeds. It cannot be argued, therefore, that the freedom from notice given by section 44(5) covers all the matters of which actual notice is deemed to be given by section 198(1). 9.29 Conversely, in the case of an intending underlessee, if he had contracted for the right to investigate the title to the headlease, he would get notice of all matters appearing in that title, including restrictive covenants in the headlease which (because they were covenants between a lessor and a lessee) would not be registrable under the Land Charges Act. It follows that to this extent, section 44(5) is wholly effective to protect the underlessee from notice of such restrictive covenants (whenever entered into). It is clear, therefore, that both section 198(1) and section 44(5) have clear-cut spheres of operation without any conflict arising between them, and this in itself eliminates any argument that they cannot, in the present context, co-exist. 9.30 Furthermore, in respect of those matters of which he might (if he had contracted for title to be deduced) have had notice but which are registrable under the Land Charges Act, it is not the knowledge which he acquires as a result of investigating the title which gives him actual notice (since if they are not registered they are void against him44 and he is not prejudicially affected by such notice45), but registration under the Land Charges Act so that again there is no conflict. Accordingly, whilst the purpose of section 44(5) may to some extent be defeated by section 198(1), there would appear to be no technical conflict between the two provisions as worded, with the result that there is no case for arguing that any limit should be placed on the clear language of section 198(1).

The exception to a registered restrictive covenant being a right in rem 9.31 The minuscule exception referred to above arises out of the provisions contained in section 10 of the Land Charges Act 1972 which provide for the issue of a certificate of the result of an official search of the register. In respect of such a certificate, subsection (4) provides: ‘(4) In favour of a purchaser or an intending purchaser, as against persons interested under or in respect of matters or documents entries of which are required or allowed as aforesaid, the certificate, according to its tenor, shall be conclusive, affirmatively or negatively, as the case may be.’ 44 45

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Land Charges Act 1972, s 4(5) and (6). Law of Property Act 1925, s 199(1)(i).

Burden of restrictive covenants where title to land is unregistered 9.34 9.32 In a case where a restrictive covenant is entered on the register but a certificate of search is issued to a purchaser which mistakenly omits to refer to such entry, there is an apparent conflict between section 198(1) of the Law of Property Act 1925 (which would treat him as bound) and section 10(4) of the Land Charges Act 1972 (which would treat him as not bound), but in Ministry of Housing and Local Government v Sharp,46 the Court of Appeal resolved this conflict by holding that section 10(4) of the 1972 Act (which at that time subsisted as section 17(3) of the Land Charges Act 1925) prevailed over section 198 of the Law of Property Act 1925. In this one instance, therefore, a restrictive covenant registered as a land charge will be defeated so that, to that extent, it is not a pure right in rem.47 Whilst mistakes by the land charges registrar are rare, they are by no means confined to the case cited; but where such a mistake is made an action for damages at the instance of the person formerly entitled to enforce the restrictive covenant would lie against the Chief Land Registrar but not, in the absence of fraud, against any officer, clerk or person employed by the Land Registry.48 9.33 In one important respect, the statutory actual notice produced by registration of a restrictive covenant is more far-reaching in its coverage than the equitable doctrine of notice since it extends to covenants and registrations made at any time since 1925 and not merely to covenants disclosed by the documents of title commencing with a good statutory root of title—a potential difference between the two of some 50 years. Under section 44(1) of the Law of Property Act 1925, the maximum length of title which a purchaser under an open contract can insist on is one commencing with a root of title which is not less than 15 years old. Accordingly, as a matter of contractual right, the purchaser will only have access to the names of estates owners who owned the land during that period and will not be in a position to search against earlier estate owners of whose names he is unaware. Frequently this will present no problem because certificates of official search made against the names of earlier estate owners will be produced by the vendor; but in other cases, the purchaser will be purchasing blind as to what might have been entered on the register of land charges between 1925 and the date of the conveyance to the conveying party under the root of title. 9.34 Whilst not derogating from the consequences of the deemed actual notice of such entries provided for by section 198(1) of the Law of Property Act 1925, nevertheless so long as the purchaser had no actual knowledge49 of the subject-matter of the entry at the time when the purchase was completed, sections 24 and 25 of the Law of Property Act 1969 provide for the payment by the Chief Land Registrar (acting on behalf of the Crown) of compensation for the loss suffered as a result of the existence of the entries. In the case of

46 47

[1970] 2 QB 223, CA. This does not apply to a restrictive covenant which is correctly registered as a local land charge under section l(1)(b)(ii) of the Local Land Charges Act 1975. In such a case, the defective certificate of search does not prevail so as to defeat the covenant but may entitle the purchaser who relies on it to claim compensation under s 10(1) of that Act. 48 See Ministry of Housing and Local Government v Sharp, above, as now modified by s 10(5) of the Land Charges Act 1972. 49 Determined without regard to the provisions of s 198 of the Law of Property Act 1925: Law of Property Act 1969, s 25(2).

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9.35  The running of the burden of restrictive covenants registered restrictive covenants, the loss would prima facie be the difference between the value of the land subject to the restrictive covenants and its value free from such covenants.

The negative effect of not registering a restrictive covenant as a land charge 9.35 The negative effect of not registering a restrictive covenant which is registrable as a general land charge (as opposed to a local land charge50), is set out in section 4(6) of the Land Charges Act 1972 and section 199(1) of the Law of Property Act 1925. The former subsection provides as follows: ‘(6) An estate contract and a land charge of Class D created or entered into on or after 1 January 1926 shall be void as against a purchaser for money or money’s worth or, in the case of an Inland Revenue charge, a purchaser within the meaning of the Capital Transfer Tax Act 1984 of a legal estate in the land charged with it, unless the land charge is registered in the appropriate register before the completion of the purchase.’ Prima facie, an unregistered restrictive covenant which is statutorily declared to be void as against a purchaser could hardly be expected to rule the purchaser from its grave under the banner of the purchaser’s notice of the covenant’s icon. Nevertheless, in such a case, section 199(1)(i) of the Law of Property Act 1925 removes even the possibility of an argument to that effect by providing that: ‘(1) A purchaser shall not be prejudicially affected by notice of— (i) any instrument or matter capable of registration under the provisions of the Land Charges Act 1925,51 or any enactment which it replaces, which is void or not enforceable as against him under that Act or enactment, by reason of the non-registration thereof.’ 9.36 If the inter-relation between these two sets of provisions is carefully analysed, then the following three propositions emerge: (a) A purchaser can rely on section 4(6) of the 1972 Act even if he is not a purchaser ‘in good faith’ since those words do not appear in the definition of ‘purchaser’ contained in section 17(1) of that Act. On the other hand, for a purchaser to be relieved of notice under section 199(1)(i) of the 1925 Act, he must be a purchaser ‘in good faith’ since those words are part of the definition of ‘purchaser’ in section 205(1)(xxi) of that Act. In Midland Bank Trust Co v Green,52 whilst both provisions were applicable to the unregistered option in that case, precedence was given to the purchaser’s protection under section 4(6) of the 1972 Act and the question whether the purchaser was in good faith for the purposes of section 199(1)(i) was not, therefore, of significance. (b) Once a restrictive covenant has become void against a purchaser under section 4(6), it cannot be resurrected as against a subsequent purchaser of 50 As to which, see para 9.37 below. 51 To be construed as a reference to the 1972 Act by virtue of the Interpretation Act 1978, s 17(2)(a). 52 [1981] AC 513, HL.

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Burden of restrictive covenants where title to land is unregistered 9.37 the same or a derivative estate either by being registered prior to completion of that subsequent purchase53 or by that purchaser expressly conveying the  land ‘subject to’ the unregistered covenant.54 Again precedence is given to section 4(6) in totally disabling the covenant in the direction of the purchaser and those claiming through or under him and this feeds into section 199(1)(i). It should be pointed out, however, that whether subsequent registration is entirely without effect would depend upon whether, prior thereto, the whole of the burdened land had been disposed of for an estate in fee simple free from any outstanding legal interest as against which the covenant had not already become void.55 (c) In order to be a purchaser within the meaning of section 4(6), the purchaser must, in addition to qualifying as such under the definition of ‘purchaser’ contained in section 17(1) of the Act (which includes the requirement of consideration consisting of ‘valuable consideration’) be a purchaser for ‘money or money’s worth’. If a purchaser provides valuable consideration of some other kind, then he falls outside section 4(6) (so that the covenant is not void against him under that provision) but he still falls within section 199(1)56 and it is necessary to consider what effect, if any, the covenant can have against him under that section. Since the covenant is not void against him under the provisions of the Land Charges Act, he is not excused from the effects of any notice of the covenant under section 199(1)(i), and therefore section 199(1)(ii) applies under which he will only not be prejudicially affected by the covenant if he has no notice of it in accordance with those provisions. If, therefore, such purchaser has actual or constructive notice of the covenant, then the general law continues to apply with the result that he will be bound by the covenant. The net result is that whether a purchaser for valuable consideration other than in money or money’s worth takes subject to an unregistered (post-1925) restrictive covenant depends upon whether he had notice (in the section 199(1)(ii) and (2) sense) or not; ie notwithstanding that the covenant is a post-1925 covenant, it depends, in such a case, for its enforcement upon the ordinary doctrine of notice.

The effect of not registering as a local land charge a restrictive covenant registrable as a local land charge 9.37 The restrictive covenants in question are those made registrable as local land charges by section l(1)(b)(ii) of the Local Land Charges Act 1975.57 53 See Kitney v MEPC Ltd [1977] 1 WLR 981, CA. 54 See Re Rutherford’s Conveyance [1938] 1 All ER 495 (Simonds J). 55 See further, above, para 9.8 et seq, and the corresponding situation in registered land illustrated by Freer v Unwins Ltd [1976] Ch 288 (Walton J), although it would appear in that case that in addition to the lease having been granted at a time when the restrictive covenant had not been protected on the registered title, the freehold had also been transferred – both interests (and not merely the leasehold interest) should therefore have taken effect free from the covenant. In relation to Freer v Unwins, see further para 9.63 et seq below. 56 To which the definition of ‘purchaser’ in s 205(1)(xxi) applies under which the term means one who for ‘valuable consideration’ acquires an interest in property ‘except that in Part I of this Act and elsewhere where so expressly provided “purchaser” only means a person who acquires an interest in or charge on property for money or money’s worth’. Section 199 of the Act is in Part XI of the Act and contains no such express provision; hence the exception does not apply. 57 See para 9.73 below (and also para 10.23 et seq).

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9.38  The running of the burden of restrictive covenants Since that Act came into operation in 1977, an unregistered local land charge is no longer void but section 10(1) provides that: ‘Failure to register a local land charge in the appropriate local land charges register shall not affect the enforceability of the charge …’ but ‘the purchaser shall … be entitled to compensation for any loss suffered by him in consequence’. The question of enforceability is therefore left to the general law and, accordingly, its enforceability will depend upon whether the burden of the covenant is legal or equitable. If, having been authorised by a specific statute, it takes effect as a legal burden, then it will prima facie be enforceable as a right in rem. If, however, it takes effect only in equity (in common with restrictive covenants at large) then its enforcement will depend upon whether the land is acquired by a purchaser of a legal estate who takes for value and without notice in the traditional sense already considered above. This matter is considered further in Chapter 10.58

Registering a restrictive covenant 9.38

Three points call for special mention.

(1) By virtue of section 3(1) of the Land Charges Act 1972, a restrictive covenant can only be registered against the name of the owner of a legal estate in the burdened land whose estate is affected thereby.59 Yet as has been seen,60 a restrictive covenant can be validly created by a covenantor who merely has an equitable interest in the burdened land. In such a case, unless and until the covenantor acquires a legal estate in the burdened land, it would appear that the restrictive covenant could not be registered—not against the covenantor since he is not the ‘estate owner’ within the meaning of section 3(1) and not against whomsoever is the estate owner since he has not entered into the covenant.61 However, if and so long as the interest of the covenantor in the burdened land remains equitable, no protection under the Land Charges Act 1972 is required since a subsequent purchaser, whether with or without notice of the covenant, of the equitable interest in the burdened land could not claim the protection of section 4(6) of the Act. On the other hand, a disposition of the legal estate by the legal owner would, of course, take effect free from the restrictive covenant. The only way indirect protection against either the present or a future legal owner of the burdened land could be achieved would be by the covenantee requiring appropriate steps to be taken by the covenantor to ensure that the covenantor’s equitable interest (including the burden of the covenant attaching to it) was adequately protected as against the present owner of the legal estate in the land, so as to be enforceable not only against that 58 At para 10.27 et seq. 59 See Barrett v Hilton Developments Ltd [1975] Ch 237, CA. 60 See above, para 1.51. 61 It is thought that the observations (by way of obiter dicta) of Russell and Stamp LJJ in Barrett v Hilton Developments Ltd [1975] Ch 237 that a contract for sale between a sub-vendor and a sub-purchaser would be registrable against the head-vendor, if valid in relation to such a contract, would not extend to a restrictive covenant entered into by the owner in equity of land being registrable against the owner of the legal estate in the land.

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Burden of restrictive covenants where title to land is unregistered 9.39 owner but also against a person deriving title through him. In the case of the covenantor being a contractual purchaser or the owner of an option, this could be done by requiring him to register the contract or option.62 (2) Priority notices. In most cases the occasion for restrictive covenants being entered into is the occasion of a sale of part of the land owned by the covenantee. It is therefore not unlikely that, immediately upon completion of the sale, another disposition of a legal estate or interest effected by the purchaser/covenantor will take effect, eg a legal mortgage, lease or subsale. Yet no land charge can be registered against the covenantor in advance of its creation, that is until he enters into the covenant, nor (as has been seen) until he acquires the legal estate in the land. Moreover, a purported registration made in anticipation of his acquiring the legal estate (even if he covenants in advance of completion) will not become effective on his doing so.63 To enable land charges (including restrictive covenants) to be protected in such circumstances, section 11 of the Land Charges Act 1972 provides that the covenantee, not less than 15 working days64 before the intended registration is to take effect, may give a priority notice to the registrar. If then (following completion of the sale and the restrictive covenant being entered into) an application to register the covenant is made within 30 days after the priority notice is entered in the register, the registration of the covenant is deemed to take effect at the time the restrictive covenant was entered into, ie at the moment of completion when the covenant is entered into. By the adoption of this procedure, the registration would be effective as against an immediate mortgagee, lessee or sub-purchaser of the land. (3) Building scheme covenants. The special problems attaching to the registration of such covenants and the steps required to be taken have been fully considered in Chapter 8 in dealing with building schemes.

Obtaining the removal from the register of a restrictive covenant 9.39 In the case of restrictive covenants registered under the Land Charges Act 1972, the occasion for their removal from the register will most frequently arise as a result of successful proceedings under section 84(1) or 84(2) of the Law of Property Act 1925 or as the result of a release by the persons entitled to

62

But other equitable interests in land are not so protectable, eg an equitable interest under a bare trust. In such a case, a sale of the legal estate by the bare trustee in favour of a purchaser who had no notice of the trust would inevitably overreach the equitable interest of the beneficiary, including the derivative interest consisting of the restrictive covenant entered into by the beneficiary. 63 Barrett v Hilton Development’s Ltd [1975] Ch 237. In that case, the defendant sub-purchaser registered its estate contract against the name of the plaintiff sub-vendor on 23 May 1972 and the plaintiff completed his purchase and acquired the legal estate on 31 May. Subsequently, the plaintiff contracted to sell the land to a third party and applied to the court for the entry of the defendant’s estate contract to be vacated. The Court of Appeal upheld an order for the vacation of the entry holding that the initial invalidity of the registration against the name of the subvendor was not cured by the sub-vendor subsequently acquiring the legal estate. 64 This period is specified in order to avoid any conflict with the 14-working day period of protection afforded to a person who obtains a certificate of official search under ss 9 and 10 of the Land Charges Act 1972.

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9.40  The running of the burden of restrictive covenants the benefit of the covenant. These are matters dealt with under the relevant heads in Chapters 14, 15 and 16. But occasionally a ‘rogue’ restrictive covenant may be entered on the register which ought never to have been entered by reason either of some demonstrable mistake of fact or of a clear misunderstanding of the law. In such a case application may be made to the court by summons or motion in an action for its instant removal under section 1(6) of the Land Charges Act 1972.65

THE RUNNING OF THE BURDEN OF RESTRICTIVE COVENANTS WHERE THE TITLE TO THE BURDENED LAND IS REGISTERED 9.40 Where the title to the burdened land is registered, the position is governed exclusively66 by the provisions of the Land Registration Acts and the Rules made thereunder and the position is the same whether the covenant was entered into before 1925 or afterwards.

1  Registered proprietor with an absolute title67 9.41 The key sections of the Land Registration Act 2002 which apply in this case are section 11, which applies to a first-registered proprietor of freehold land, and section 29, which applies to transferees from a registered proprietor of freehold land.68

First registration 9.42 Section 11 of the 2002 Act provides that the registration of a first registered proprietor with an absolute title to freehold land has, by the relevant parts of subsection (4), the following effect in relation to restrictive covenants: ‘(4) The estate is vested in the proprietor subject only to the following interests affecting the estate at the time of registration— (a) interests which are the subject of an entry in the register in relation to the estate, (b) unregistered interests which fall within any of the paragraphs of Schedule 1 …’ Like provisions apply in relation to leasehold land by reason of section 12.

65 See Calgary and Edmonton Land Co Ltd v Dobinson [1974] Ch 102 (Megarry J). For the position in the case of registered land, see Lester v Burgess (1973) 26 P CR 536 (Goulding J) (where the propriety of the continued appearance of the entry on the register was not clear). 66 Registration of a restrictive covenant under the Land Charges 1972 will, if the land is registered, have no effect: Land Charges Act 1972, s 14(1); Land Registration Act 1925, s 50(1); cf City Permanent Building Society v Miller [1952] Ch 840; Kitney v MEPC Ltd [1977] 1 WLR 981. 67 By s 9(2) of the Land Registration Act 2002, ‘A person may be registered with absolute title if the registrar is of the opinion that the person’s title to the estate is such that a willing buyer could properly be advised by a competent professional adviser to accept’. In relation to leasehold estates, see s 10(2). 68 For the corresponding provisions dealing with leasehold land, see ss 12 and 30.

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Burden of covenants where title to the land is registered 9.45 9.43 Restrictive covenants are not within any of the paragraphs of Schedule 1 – in other words, they are not overriding interests. Such a covenant will normally be disclosed by the documents required by regulation 24(1)(c) of the Land Registry Rules 2003 to accompany the application for first registration. It will also usually be apparent because it is protected by an entry under the Land Charges Act 1972. Supressing information with the intention of concealing a person’s right in the course of registration is likely to amount to a criminal offence under section 123 of the 2002 Act.69 On registration, the registrar will accordingly enter a notice on the charges register of the title in respect of it. The entry of a notice will then give protection against future transferees.

After first registration 9.44

Section 29, in so far as relevant, provides that:

‘(1) If a registrable disposition of a registered estate is made for valuable consideration, completion of the disposition by registration has the effect of postponing to the interest under the disposition any interest affecting the estate immediately before the disposition whose priority is not protected at the time of registration. (2) For the purposes of subsection (1), the priority of an interest is protected— (a) in any case, if the interest— (i) is a registered charge or the subject of a notice in the register, (ii) falls within any of the paragraphs of Schedule 3 …’. 9.45 Restrictive covenants are not within Schedule 3. Accordingly, only if protected by a notice on the charges register will they be protected. Where a restrictive covenant is created over registered land, an application must therefore be made for the entry of a notice in the charges register in order to protect it against others. Restrictive covenants between lessor and lessee relating to land other than the demised premises may under the Land Registration Act 2002 be protected by notice because the exclusion from such protection in section 33(c) of the Act is limited to covenants relating to the demised premises. This represents a change from the position under the Land Registration Act 1925, where the exclusion in section 50(1) applied to any covenant between lessor and lessee even where it restricted the use of other land of the landlord other than that included in the demise.70

69 Alhough s 123 refers to it being an offence to supress information with the intention of concealing a person’s right ‘during the course of proceedings’, this is likely to include the ‘proceedings’ of making first registration via the registrar, which is plainly one of the things it is aimed at, particularly given the offences created by s 124. 70 See Oceanic Village Ltd v United Attractions Ltd [2000] Ch 234 (Neuberger J), where the steps a covenantee could in these circumstances take to try to protect his position were also set out.

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9.46  The running of the burden of restrictive covenants The right to apply for the entry of a notice on the register must not be exercised without reasonable cause (section 77(1)(b)). In the event of a breach of this duty, anyone who suffers damage as a result has a statutory cause of action against the wrongdoer, by reason of section 77(2).

Effect of the entry of a notice in the charges register 9.46

Section 32(3) of the 2002 Act provides that:

‘The fact that an interest is the subject of a notice does not necessarily mean that the interest is valid, but does mean that the priority of the interest, if valid, is protected for the purposes of sections 29 and 30.’ Accordingly, if the covenant is valid, subsequent interests are subject to it. These provisions mean that where notice of a restrictive covenant appears on the register, the defence of purchaser of a legal estate without notice will not be available to a transferee of an estate or interest in the registered land, but in all other respects the enforceability of the covenant is dependent upon the general rules of equity and such enforceability is not enhanced in any way by the notice on the register.71 9.47 The effect of section 32 of the Land Registration Act 200272 (as with sections 50(2) and 52 of the Land Registration Act 1925, read in conjunction, before it) would appear to be that the entry of a notice of a restrictive covenant in the charges register of the burdened land will give the benefit of the covenant (subject to its own inherent limitations) the status of a right in rem – thus increasing its original status as a right in personam – since there would appear to be no circumstances in which such an entry (while it subsists) could not be set up against a person interested in the burdened land.73 9.48 In White v Bijou Mansions Ltd,74 Simonds J at first instance held that the previous sections of the Land Registration Act 1925 (sections 50(2) and 52) to like effect excluded any argument that a lessee from a registered proprietor, who (because of section 44(2) of the Law of Property Act 1925) had no right when he took the lease to inspect the registered title of the lessor, was not affected by notice of restrictive covenants entered on the lessor’s registered title. The provisions of section 44(5) of the Law of Property Act 192575 accordingly will not protect such a lessee from notice of such restrictive covenants and the rule in Patman v Harland76 is, in registered land, fully reconfirmed. However, there is now nothing to prevent an intending lessee or assign of a lessee, or anyone else,

71

As was apparent from the cases of Kitney v MEPC Ltd [1977] 1 WLR 981and Freer v Unwins Ltd [1976] Ch 288 under the Land Registration Act 1925. 72 As with ss 50(2) and 52 of the Land Registration Act 1925, read in conjunction,before it. 73 Compare the position, in this respect, with that of a restrictive covenant registered under the Land Charges Act 1972, above, para 9.31 et seq, and also with that of a restrictive covenant in registered land which is merely protected by a caution which may be overlooked by the registrar when issuing an official certificate of search: Parkash v Irani Finance Ltd [1970] Ch 101. The possibility of a similar mistake being made in relation to a notice (which requires the formality of the production of the land certificate) would seem to be non-existent. 74 [1937] Ch 610 (Simonds J); affd [1938] Ch 351, but the present point not being considered. 75 Considered above at para 9.28 in relation to unregistered land. 76 (1881) 17 ChD 353.

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Burden of covenants where title to the land is registered 9.51 from inspecting the lessor’s registered title77 and there is obviously every good reason for such a lessee doing so.78

Procedure 9.49 By section 34(3) of the Land Registration Act 2002, the entry of a notice on the charges register (by way of an ‘agreed notice’) can be made if: ‘(a) the applicant is the relevant registered proprietor, or a person entitled to be registered as such proprietor, (b) the relevant registered proprietor, or a person entitled to be registered as such proprietor, consents to the entry of the notice, or (c) the registrar is satisfied as to the validity of the applicant’s claim.’ Although such a notice is described in the Act as an ‘agreed notice’, it will be seen that the beneficiary of a restrictive covenant can obtain protection for the covenant even without the consent of the registered proprietor if he can satisfy the registrar that his claim is valid. Following the making of any entry without consent, it is, as would be expected, the practice of the Land Registry to notify the registered proprietor that the entry has been made.79 9.50 The application must be made in Form AN1 and accompanied by the instrument containing the restrictive covenant (Land Registration Rules 2003, rule 81), and either the written consent of the registered proprietor or person entitled to be registered as such (with evidence of that person’s entitlement to registration) or the evidence necessary to satisfy the registrar that the applicant’s claim is valid. In the event that the applicant does not feel able to satisfy the registrar as to validity, a unilateral notice may be entered without the consent of the relevant proprietor. The applicant is not then required to satisfy the registrar that his claim is valid and does not need to support his claim of entitlement with any evidence. The application is made using Form UN1. The relevant proprietor is not notified of the application until after the entry has been made so will not usually be able to object to the application.80 However, they will always be notified after the application has been completed.81 They can then apply at any time to cancel the notice82 and by doing so require the person claiming the benefit of the protected interest to prove the validity of their claim. 9.51 If the beneficiary of a unilateral notice, or a person entitled to be registered as beneficiary, objects to the cancellation of the notice, the Land Registry will notify the person seeking cancellation. Unless satisfied the objection is groundless, time will then be given to the parties if they wish to negotiate, but in the absence then of agreement to withdraw either the notice or the objection 77 Section 66 of the Land Registration Act 2002 (the right of open inspection having first been introduced by s 1 of the Land Registration Act 1988, which substituted a new s 112 in the Land Registration Act 1925). 78 He is bound by what is on his lessor’s registered title whether he in fact knows of it or not, and there is nothing legally to lose by acquiring knowledge in fact. 79 See Land Registry Practice Guide 19, para 3.3.2. 80 Ibid, para 2.3.3. 81 Ibid. 82 Using Form UN4.

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9.52  The running of the burden of restrictive covenants to cancellation of it, or in the event that either of the parties commences court proceedings to determine the dispute, the matter must be referred by the registrar to the Land Registration division of the First-tier Tribunal (Property Chamber). Unless court proceedings have been commenced to decide matters (in which case the Tribunal will stay proceedings before it to await the result), the Tribunal will then determine the dispute, and the registrar will give effect to the order made. Costs are dealt with as set out in Land Registry Practice Guide 38.

Position where the covenant is not protected by any entry on the register 9.52 How far, if at all, such a covenant binds the burdened land depends on the circumstances. The following cases fall to be considered.

(a)  A first registered proprietor who is beneficially entitled 9.53 By virtue of section 11(4) of the Land Registration Act 2002 (relevant parts of which are set out in para 9.42 above), such a registered proprietor takes free from the unregistered restrictive covenant.83 However, the section does not provide that the covenant is void as against such proprietor and if the person entitled to the benefit of the covenant can make out a case for alteration of the register under Schedule 4 of the 2002 Act,84 then the appropriate entry on the charges register will be made.85 9.54 The court has power to order that the interest added to the register by this means should rank in priority to interests registered in the period between the date when this should have been done and the date of the rectification ordered: see MacLeod v Golden Harp Properties.86 See further under ‘Rectification’ below.87

(b) A first registered proprietor who is not entitled for his own benefit to the registered land 9.55 Relevant parts of section 11(4) of the Land Registration Act 2002 have been set out at para 9.31 above. Subsection (5) goes on to state, ‘(5) If the proprietor is not entitled to the estate for his own benefit, or not entitled solely for his own benefit, then, as between himself and the persons 83 That is to say, one which is not protected by an ’agreed’ or unilateral notice (as to which, see above). 84 ‘Rectification’ is, under the 2002 Act, a particular type of alteration. An alteration may on the order of the court or by the registrar himself (and by reasons of the Land Registration Rules 2003, r 126(1) in fact, in the case of the court, in the absence of exceptional circumstances, must) be made for the purpose, amongst other things, of correcting a mistake found to have been made. ‘Rectification’ is where the alteration: (i) involved the correction of a mistake; and (ii) prejudicially affects the title of a registered proprietor (see Sch 4, para 1). It is not used in the same sense as in equity generally but has this defined meaning for the purposes of the Land Registration Act 2002. No rectification can take place without the proprietor’s consent unless: (a) the proprietor has by fraud or lack of care caused or substantially contributed to the mistake; or (b) it would for any reason be unjust for the alteration not to be made (Sch 4, paras 3 and 6). 85 As occurred in Rees v Peters [2011] 2 P&CR 18, CA. 86 [2015] 1 WLR 1249. 87 At para 9.63 et seq.

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Burden of covenants where title to the land is registered 9.58 beneficially entitled to the estate, the estate is vested in him subject to such of their interests as he has notice of.’ This simply means that that where the first registered proprietor holds the land on trust, the estate will be vested in him or her subject to the rights of the beneficiaries under that trust. The position set out in relation to the requirement for the entry of a notice on the register in relation to a restrictive covenant in order for subsequent purchasers to be bound is as in (a) above.

(c) A subsequent registered proprietor to whom the land has been transferred for valuable consideration 9.56 Section 2988 (cited above) of the Land Registration Act 2002 applies, and such a proprietor will take the land free from the restrictive covenant. Again, by section 32(3) the covenant is not void as against such a subsequent proprietor. However, it is considered that it would only be in a wholly exceptional case that the court would make an order for alteration of the register under section 65 of and Schedule 4 to the 2002 Act which overrode the clear indications of freedom from the covenant contained in section 29.89

(d) A subsequent registered proprietor to whom the land has been transferred without valuable consideration 9.57 A transferee who does not provide valuable consideration90 has no priority over pre-existing interests affecting the land.91 This corresponds to the position in unregistered land in the case of restrictive covenants entered into before 1926 where in order to take free from a restrictive covenant of which he had no notice (under the equitable doctrine), the subsequent owner must have been a bona fide purchaser for valuable consideration.92 9.58 It also substantially corresponds to the position in unregistered land in the case of post-1925 restrictive covenants, but with one difference. In the case of unregistered land, the payment by a purchaser of valuable consideration which does not consist of money or money’s worth does not make a restrictive covenant which is not registered as a land charge void against him.93 Such a purchaser is accordingly not relieved of notice of the covenant under section 199(1)(i) of the Law of Property Act 1925, and whether he has notice of it will

88

Or, in the case of leasehold land affected by a restrictive covenant which is not contained in the lease, s 23(1). 89 See the observations of Walton J in Freer v Unwins Ltd [1976] Ch 288 (in relation to the rectification provisions formerly contained in the Land Registration Act 1925), though there would appear to be jurisdiction in the court to do this notwithstanding the land being vested in a subsequent purchaser who relied on the register (see Norwich and Peterborough Building Society v Steed [1991] 1 WLR 449 in relation to s 82 of the 1925 Act). 90 In the words of s 29 of the Land Registration Act 2002. 91 The same position pertained under the 1925 Act. 92 See above, paras 9.12 and 9.13. 93 Land Charges Act 1972, s 4(6), see above para 9.36(c).

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9.59  The running of the burden of restrictive covenants therefore depend upon whether he has notice in the sense provided for by section 199(1)(ii) and (2) of the Act.94 If he has, then there is nothing in the property legislation relieving him from the ordinary consequences of such notice, with the result that the covenant will be binding upon him. However, in the case of registered land the provision by a transferee of valuable consideration of any kind will take the case out of the present case (d) and place it in case (c) above, under which he will take free from the unprotected restrictive covenant whether he has notice of it or not. Section 132(1) of the Act provides that ‘valuable consideration’ does not include marriage consideration or a nominal consideration in money’. 9.59 In relation to what constitutes ‘nominal consideration’, in City of Westminster v Duke of Westminster,95 Harman J said (at p 184): ‘In my judgment any substantial value – that is a value more than, say, £596 – passing at the time of a disposition will prevent that disposition being for a nominal consideration. The fact that the value of the property given far exceeds the value of the consideration given for it does not make the consideration “nominal”.’

(e)  A lessee to whom a legal lease is granted 9.60 A lease of more than seven years’ duration is registrable under the Land Registration Act 2002, section 4(1)(c).97 The lessee will be registered with absolute title or ‘good leasehold title’.98 This has the same effect99 as registration as a proprietor of freehold title. A lease of seven years’ duration or less is not required to be registered and is simply an overriding interest which is, without being noted on the Register, binding on whoever is, from time to time, the registered proprietor. Where such a lease is granted out of a registered estate, section 29(4) of the Land Registration Act 2002 provides that section 29 has the same effect as if the grant was a registrable disposition which was registered at the time of the grant. It will therefore be subject to restrictive covenants and (and all other entries) appearing on the register at that date.100

94 See above, para 9.17 et seq. 95 [1991] 23 HLR 174. The actual decision in which was reversed by the Court of Appeal at [1994] 24 HLR 572, but which has no bearing on the current point). 96 Equivalent to around £12 in 2018 (based on 1990 values, when the case was decided). 97 This represents a change from the position under the Land Registration Act 1925, where only leases of more than 21 years’ duration were registrable. A lease of more than seven years’ duration is therefore registrable where granted on or after 13 October 2003 (when the Land Registration Act 2002 came into force), and a lease of more than seven years’ duration created before then is required to be registered on the occurrence of any of the events set out in s 4(1) of the Land Registration Act 2002, including any transfer whether for consideration or by way of gift, or may be voluntarily registered at any time when more than seven years of the lease remain unexpired or the right to possession under it is discontinuous (see Land Registration Act 2002, s 3). 98 Where the registrar does not approve the lessor’s title to grant the lease – but the effect is the same as for an absolute title aside from the fact that any interest etc, affecting the title of the lessor to grant the lease is unaffected by the registration (see s 10(3)). 99 Save as indicated in footnote 98 above. 100 As confirmed by Freer v Unwins [1976] 1 Ch 288, below.

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Burden of covenants where title to the land is registered 9.63 9.61 Once granted, such a lease is itself nonetheless an unregistered legal estate. Whilst legal interests to which such a lease is subject will be binding on successors in title to the lease, equitable interests such as restrictive covenants noted on the grantor’s title, whilst they will be binding on the original lessee, would not appear to be binding on the lessee’s successors in title unless registered under the Land Charges Act 1972. 9.62 Prior to the Land Registration Act 2002, a lease not exceeding 21 years (rather than one of seven years or less) could not be registered (under the Land Registration Act 1925), and was merely an overriding interest.

Rectification 9.63 A restrictive covenant may be overlooked when land is first registered.101 The charges register can subsequently be rectified,102 but Freer v Unwins103 (decided under the Land Registration Act 1925, but where the logic still applies under the 2002 Act) illustrates some of the problems this can create. The facts were as follows: In 1953, the owners of a parade of shops sold and conveyed shop A to the plaintiff, the owners covenanting with the plaintiff that the rest of the shops would not be used for the sale by retail of tobacco, cigarettes, smokers’ sundries, sweets or chocolates. At that time, the shops were unregistered and the covenant was duly registered against the names of the vendors under the Land Charges Act 1925. Subsequently, the title to the remaining shops, including shop B, was registered but in the case of shop B no entry was made on the title showing the existence of the restrictive covenant. In December 1969, the registered proprietor of shop B granted a lease of shop B for a term of 21 years and in December 1974 this lease was assigned to  the defendant company who were vintners and who began selling the goods referred to in the covenant. Before taking the assignment and changing the use, the defendant company particularly made certain that there was nothing on the freehold title, as registered, which would affect them in the business which they wished to carry on. In February 1975, the plaintiff issued a writ claiming against the defendant company an injunction to restrain such sales and damages for breach of the restrictive covenant. The plaintiff then discovered that the covenant had not been registered against the freehold title to shop B and, in proceedings before the Chief Land Registrar brought under section 82 of the Land Registration Act 1925, the plaintiff sought and obtained rectification of the register of the freehold

101 Cygnet Healthcare Ltd v Greenswan Consultants Ltd [2009] EWHC 1318 provides a relatively recent example. There, the mistake went further than just in relation to registration, and a restrictive covenant was entered into by a company that was not in fact the purchaser of the land, but the actual purchaser was a director of the company who knew of the mistake and was held to have contributed to it. Rectification of the land register to include the covenant against the purchaser’s title was on this basis considered appropriate (see para 50 of the judgment). 102 See footnote 84 above. 103 [1976] Ch 288.

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9.64  The running of the burden of restrictive covenants title, the restrictive covenant then being shown on that title as having been registered on 28 April 1975. In December 1975, the plaintiff issued a notice of motion for an injunction in the terms of the writ. 9.64

Walton J held:

(1) That the earliest date from which rectification of the register, pursuant to an order made under section 82 of the Act, could take effect was the date when the rectification was entered on the register. (2) Since that date was subsequent to the date of the lease of December 1969, then by virtue of the combined effect of sections 19(2), 20(1) and 50(2) of the Land Registration Act 1925, the lessee took free from the restrictive covenant and the defendant company, as assignee, was in an exactly similar position. (3) Since the lease in the present case was not registrable (being for not more than the then requisite period of 21 years104), there could have been no rectification against the defendant company. But (obiter) if the lease had been registrable and registered, then whilst rectification would be claimable against that title, an order for rectification could only be made if the court (or the registrar) ‘considered that it would be unjust not to rectify the register against him’, and (in the words of Walton J): ‘I cannot, as at present advised, think that a lessee who has taken every precaution to see that he is entitled to use the land for the purpose for which he wishes to use it, so far as he can see, would have the title rectified against him because so far from it being unjust not to rectify the register against him (at any rate, in the usual case which is likely to happen), it seems to me that it would be most unjust to rectify the register against him. Vigilantibus non dormientibus servit aequitas— equity aids the vigilant and not the indolent—and here the defendants have been very vigilant, although I am not ascribing any sleeping on his rights to the plaintiff. But the defendants having been vigilant, even if they had a separate registered title, I do not think there would be any prospect of rectification as against them.’ 9.65 However, the court has power to order that the interest added to the register by this means should rank in priority to interests registered in the period between the date when this should have been done and the date of the rectification ordered: see MacLeod v Golden Harp Properties.105 The Court of Appeal regarded the long-standing decision in Freer v Unwins Ltd that rectification takes effect from the date the notice of the interest in question (there, the restrictive covenant) is added to the register as not affecting the fact that the court can, on making the order for rectification, alter the order of priorities so as to give the earlier interest added by rectification the priority it would have had but for the fact that it was not registered earlier as it should have been. The court made the point106 that the Land Registration Act 2002, like the 1925 Act which it replaced, is not intended to provide absolute indefeasibility of title

104 Which would now be seven years: see paras 9.60 and 9.62 above. 105 [2015] 1 WLR 1249. 106 At para 98.

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Burden of covenants where title to the land is registered 9.67 and that Schedule 4 explicitly recognises that the rectification has the potential to prejudice the interests of third parties who have relied in good faith on the register. It considered the carefully structured provisions of paragraphs 2 and 3 (and their equivalents in the case of rectification by the registrar), with the special protection given to a proprietor in possession, allow a fair balance between the competing interests to be struck in any particular case. Schedule 8 gives the loser the right to an indemnity.

2  Registered proprietor with a possessory or qualified title Possessory title 9.66 A person may be registered with possessory title under section 9(5) of the Land Registration Act 2002 (in the case of freeholds) or under section 10(6) (in the case of leasehold estates) if the registrar is of the opinion that (a) he is in actual possession of the land, or in receipt of rents and profits of the land, by virtue of the estate, and (b) there is no other class of title with which he may be registered. Registration with possessory title has the same effect as registration with absolute title, except that it does not affect the enforcement of any estate, right or interest adverse to, or in derogation of, the proprietor’s title subsisting at the time of registration or then capable of arising (see section 11(7) in the case of freehold estates and section 12(8) in the case of leasehold estates). Further, where there is registration with possessory title, the charges register is likely to note that the land may be affected by covenants though no particulars can be given. Section 11(4)(a) of the Act provides that the title vested in the registered proprietor is subject to ‘interests which are the subject of an entry in the register in relation to the estate’ at the time of registration and it is arguable this would amount to an ‘entry’. Accordingly, where a covenant subsists and is capable of taking effect at the time of first registration (which will fall to be determined by reference to the rules applicable to unregistered land at that time), it is likely to take effect and bind subsequent registered proprietors.107 It would seem wrong were it otherwise, as a person registered with possessory title where covenants were necessarily unknown on the registration being made would otherwise be in a better position than one with an absolute title based on deeds revealing them.

Qualified title 9.67 By sections 9(4) (freehold estates) and 10(5) (leasehold estates), this is an absolute title save that the person’s title to the estate, or the lessor’s title to the reversion, has only been established to the satisfaction of the registrar for a limited period or subject to certain reservations which cannot be disregarded under section 9(3) or 10(4).

107 In relation to which, see para 1.51 above.

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9.68  The running of the burden of restrictive covenants Registration with qualified title has the same effect as registration with absolute title, except that it does not affect the enforcement of any estate, right or interest which appears from the register to be excepted from the effect of registration (sections 11(6) and 12(7)).

3  Leasehold estates 9.68 As will be apparent from the above, registration of a leasehold estate with an absolute, qualified or possessory title has like effect under section 12 as in the case of a freehold estate under section 11. There is also a further category of possible title in relation to leasehold estates, namely that of ‘good leasehold title’. Registration with absolute title in the case of leaseholds will be made where (a) the registrar is of the opinion that the person’s title to the estate is such as a willing buyer could properly be advised by a competent professional adviser to accept and (b) the registrar approves the lessor’s title to grant the lease. ‘Good leasehold title’ is where (a) is present but (b) cannot be met, but otherwise has the same effect as registration with absolute title.

POSITION OF SQUATTERS WHO GAIN TITLE TO LAND Unregistered land 9.69 A squatter who has obtained title by adverse possession108 will be bound by restrictive covenants created by, or binding on, the owner before he gains title, to the same extent that any other person who obtains title to the land would be bound. Although he does not obtain the estate of the previous owner; rather that estate is extinguished by the Limitation Act,109 the burden of the restrictive covenants is not incident to the extinguished owner’s estate (so that they would be extinguished with that estate), but, rather, paramount to the previous owner’s title, and all the Act extinguishes is the title of the previous owner. The right to enforce these covenants was no part of his title, and they are therefore enforceable against the squatter who subsequently becomes owner of the land by adverse possession: see Re Nisbet & Potts’ Contract.110

Registered land 9.70 On first registration the squatter will be registered as proprietor subject to the pre-existing covenants which bind him as aforementioned. Where the land is already registered, he does not acquire the estate for valuable consideration, so will be bound by pre-existing covenants. Where the squatter

108 In the case of registered land, by becoming registered proprietor. 109 Tichborne v Weir [1891–4] All ER Rep 449, 67 LT 735. The current Limitation Act is the Limitation Act 1980 (s 17). 110 [1906] Ch 386 (CA), and also the clear exposition of the law by Farwell J at first instance reported at [1905] 1 Ch 391.

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Local land charges 9.73 subsequently sells the land, however, the normal rules under section 29 of the Land Registration Act 2002 will apply, and only covenants that appear on the registered title (as notices in the charges register) will bind such a purchaser.

COVENANTS IN LEASES Unregistered land 9.71 In the case of unregistered land a restrictive covenant entered into by a lessee in favour of the lessor and relating to the demised premises is not required to be registered under the Land Charges Act 1972 and is binding on underlessees whether they have notice of it or not. Notice appears not to have been required even before 31 December 1995,111 although after that date section 3(5) of the Landlord and Tenant (Covenants) Act 1995 makes clear that it is not.

Registered land 9.72 In the case of registered land, a restrictive covenant between lessor and lessee in so far as relating to the demised premises is not able to be noted on the register (section 33(c) of the Land Registration Act 2002),112 but would be likely to be protected in priority by section 29(2)(b) as an interest where the burden is incident to the leasehold estate. Again, in relation to leases granted after 31 December 1995, section 3(5) of the Landlord and Tenant (Covenants) Act 1995 in any event makes clear that it is binding on the underlessee whether or not he has notice of it.

LOCAL LAND CHARGES 9.73

Special mention must be made of local land charges.

As will be set out in more detail in Chapter 10,113 by virtue of the combined effect of the provisions of section 1(1)(b)(ii), (c)(ii), (2)(a) and (c) of the Local Land Charges Act 1975, a restriction on the use of land enforceable by a local authority or minister or government department under any covenant or agreement (other than one made between a lessor and a lessee) made after 1925 which is binding upon successive owners of the land otherwise than by reason of such local authority, minister or government department owning an interest in the benefited land, is registrable as a local land charge against the burdened land. By section 2(5) of the Land Charges Act 1972, a restrictive covenant which is registrable as a local land charge is specifically excluded from being a Class D(ii) land charge under that Act. In the case of registered land, a local land charge is an unregistered interest which overrides both first registration and registered dispositions (see Land Registration Act 2002, Schedule 1, paragraph 6 and Schedule 3, paragraph 6).

111 Clements v Welles (1865–66) LR 1 Eq 200. 112 Although it would be easily discoverable from the lease itself. 113 Para 10.23 et seq below.

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9.73  The running of the burden of restrictive covenants Although it amounts to an overriding interest, it may alternatively be the subject of a notice or restriction. In practice, however, local land charges are usually just entered in the local land charges register, which affords sufficient protection. For the effect of the failure to register a local land charge, see para 9.37 above and para 10.27 below.

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10 Restrictive covenants and public law

INTRODUCTION 10.1 There are three particular public law contexts in which the general rules relating to restrictive covenants require special consideration, namely: (1) public bodies becoming covenantees pursuant to special statutory provisions; (2) the acquisition by public bodies of land which is burdened by restrictive covenants, and (3) the relationship between restrictive covenants and planning permission. 10.2 Separately, section 106 of the Town and Country Planning Act 1990 (as it now stands) enables people to enter into ‘planning obligations’ in relation to land, which are enforceable by local planning authorities, and which pass with the land. These are not restrictive covenants as such, but are obligations (negative or positive) specifically entered into under the section which the planning authority may enforce by direct action or injunction under the specific terms of the section itself (and the sections which follow it). Accordingly, what are known as section 106 obligations are dealt with separately in Chapter 32, where the statutory regime in relation to them is set out.

I: PUBLIC BODIES BECOMING COVENANTEES PURSUANT TO SPECIAL STATUTORY PROVISIONS PUBLIC BODIES AS COMPETENT CLAIMANTS 10.3 Under section 111(1) of the Local Government Act 1972, a local authority has ‘power to do any thing (whether or not involving the expenditure, borrowing or lending of money or the acquisition or disposal of any property or rights) which is calculated to facilitate, or is conducive or incidental to, the discharge of any of their functions’. Under section 1 of the Localism Act 2011, it is also now provided that, ‘A local authority has power to do anything that individuals generally may do’. 10.4 In the absence of specific statutory provisions providing otherwise, local authorities and other public bodies are subject to the same rules relating to covenants as private individuals. 213

10.5  Restrictive covenants and public law 10.5 Accordingly, the rule, that for a restrictive covenant to be enforceable against a successor in title from the covenantor, the covenant must ‘touch and concern’ (ie benefit) relevant land belonging to the covenantee, applies equally to public bodies. This was made clear in the leading case of London County Council v Allen,1 where the LCC agreed to give its consent under section 7 of the London Building Act 1894 for the laying out of a new street on condition the owner entered into a covenant not to build on a plot of land which lay at the end of the proposed street (so as to afford facilities for the continuation of the street in the future). The covenant entered into bound the covenantee ‘for himself, his heirs and assigns, and other the persons claiming under him, and so far as practicable to bind the land and hereditaments herein mentioned into whosesoever hands the same may come’ not to build on part of his land.2 The land was subsequently conveyed to the covenantor’s wife who had then mortgaged it. The Council sought to enforce the covenant against them. The Court of Appeal held that it could not do so, as it held no land that was benefited by the covenant, as required by the ordinary rules on restrictive covenants, of which the requirement to hold such land was one.3 Scrutton J, sitting in the Court of Appeal, said:4 ‘I regard it as very regrettable that a public body should be prevented from enforcing a restriction on the use of property imposed for the public benefit against persons who bought the property knowing of the restriction, by the apparently immaterial circumstance that the public body does not own any land in the immediate neighbourhood. But, after a careful consideration of the authorities, I am forced to the view that the later decisions of this court compel me so to hold. … I regret that I do not see my way to depriving Mrs Allen of her costs, as, whatever may be her equitable rights, I am not at all favourably impressed with her conduct as a good citizen … .’ 10.6 It was apparent that if public benefit was to feature as a factor justifying a departure from the ordinary rules of law and equity relating to restrictive covenants this could only be achieved by the intervention of Parliament. This was thereafter done by particular Acts deeming local authorities, and certain other public bodies (such as the National Trust) which entered into covenants under the Acts, to have an interest in land capable of benefiting from the covenant.5

1 2 3 4 5

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[1914] 3 KB 642, CA. At the time of the covenant, the covenantor was in possession of the land under an option agreement which he later exercised so as to acquire the legal freehold and he was treated by the Court of Appeal as a competent covenantor in all respects. On the basis of the authorities considered above, para 1.20 et seq. At the end of his judgment. See, the observations of Browne-Wilkinson V-C in Peabody Donation Fund Governors v London Residuary Body (1987) 55 P & CR 355, at 361. In that case, an argument that s 9 of the Artisans and Labourers Dwellings Improvement Act 1875 had effectively provided for the problem failed.

Statutes allowing enforcement by deemed ownership 10.9

(A) STATUTES ALLOWING ENFORCEMENT BY DEEMED OWNERSHIP OF BENEFITED LAND Planning matters 10.7 In relation to planning matters, the enforcement of obligations entered into by landowners with local authorities was originally dealt with in this way – by an Act deeming the local planning authority to own benefited land, so that it was in the same position under the law of restrictive covenants as if it held such land and the covenant had been entered into for the benefit of that land. Accordingly, so long as a restrictive covenant was entered into by agreement with the authority under the relevant section of the Act, the authority could enforce the covenants in the same way as anyone else could enforce a restrictive covenant, but without satisfying the requirement to actually own benefited land. All the other requirements relating to restrictive covenants needed to be fulfilled, however, under the ordinary law, in order for the covenant to be able to be enforced by the authority against the covenantor’s successors in title to the land.6 10.8 The original provision was contained in section 25 of the Town and Country Planning Act 1947. It was subsequently re-enacted in section 52 of the Town and Country Planning Act 1971, which continued in force until 24 August 1990. It was then re-enacted with amendments by the original section 106 of the Town and Country Planning Act 1990. This provided that: ‘(1) A local planning authority may enter into an agreement with any person interested in land in their area for the purpose of restricting or regulating the development or use of the land, either permanently or during such period as may be prescribed by the agreement. (2) Any such agreement may contain such incidental and consequential provisions (including financial ones) as appear to the local planning authority to be necessary or expedient for the purposes of the agreement. (3) An agreement made under this section with any person interested in land may be enforced by the local planning authority against persons deriving title under that person in respect of that land as if the local planning authority were possessed of adjacent land and as if the agreement had been expressed to be made for the benefit of such land.’ This way of dealing with the matter applied (through either the 1990 Act or predecessor statutes) to covenants entered into between 1 July 1948 and 25 October 1991. 10.9 This method held good in relation to planning matters until the introduction of a new section 106 planning obligations regime (entirely independent of the ordinary law of restrictive covenants) relating to planning authorities in 1991 by the substitution of a new section 106 in the Town and

6

So, for example, positive obligations could still not be enforced against successors in title under these provisions – see, eg Cantrell v Wycombe District Council [2009] 1 P&CR 12 where this was held to be the position under s 609 of the Housing Act 1985 (see page 217–218 below), which adopted the same mechanism

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10.10  Restrictive covenants and public law Country Planning Act 1990.7 This introduced a separate statutory regime in relation to ‘planning obligations’ (which may now be negative or positive), and which are enforceable by the planning authority as statutory planning obligations under section 106 itself rather than as restrictive covenants as such. Planning obligations are dealt with in Chapter 32. 10.10 Although the earlier provisions referred to have now been repealed, it would seem likely that a large number of agreements still exist which were entered into on the basis of the earlier provisions in force at the time. The new statutory provisions do not affect them, and the position in relation to them will continue to be as previously.8

Other fields 10.11 A number of statutes in respect of other specific public bodies adopted the same sort of mechanism. The relevant statutory provision can be expected to be referred to in the document containing the covenant. These include the following provisions, which remain extant: ●●

Section 8 of the National Trust Act 1937 This provides that: ‘Where any person is willing to agree with the National Trust that any land or any part thereof shall so far as his interest in the land enables him to bind it be made subject either permanently or for a specified period to conditions restricting the planning development or use thereof in any manner the National Trust may if it thinks fit enter into an agreement with him or accept a covenant from him to that effect and shall have power to enforce such agreement or covenant against persons deriving title under him in the like manner and to the like extent as if the National Trust were possessed of or entitled to or interested in adjacent land and as if the agreement or covenant had been and had been expressed to be entered into for the benefit of that adjacent land.’ By section 27 of the National Trust Act 1971, section 84 of the Law of Property Act 1925 (which contains power for the Upper Tribunal9 to discharge or modify restrictive covenants affecting land10) does not apply to restrictions imposed (whether before or after the passing of this Act) for the purpose of (a) preserving; or (b) protecting or augmenting the amenities of; or (c) securing the access to and enjoyment by the public of any property which is inalienable by section 21 of the National Trust Act 1907 (‘Certain property of Trust to be inalienable’) or by section 8 of the National Trust Act 1939 (‘Mansion and lands to be inalienable by National Trust’).

7 8 9 10

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By s 12(1) of the Planning and Compensation Act 1991. The new s 106 is set out at para 32.10 below. In relation to which, see para 10.7 above. Previously the Lands Tribunal. See Chapter 16.

Statutes allowing enforcement by deemed ownership 10.11 ●●

Section 5(1) of the Forestry Act 1967 This section, as amended, provides that: ‘(1) … (a) ‘forestry dedication covenant’ means a covenant to the said effect entered into with the [appropriate forestry authority] in respect of land in England or Wales without an intention being expressed contrary to the application of section 79 of the Law of Property Act 1925 (under which covenants relating to land are, unless the contrary is expressed, deemed to be made on behalf of the covenantor, his successors in title and persons deriving title under him or them); … (2) Where land in England or Wales is subject to a forestry dedication covenant,— (a) the [appropriate forestry authority] shall, as respects the enforcement of the covenant against persons other than the covenantor, have the like rights as if they had at all material times been the absolute owners in possession of ascertained land adjacent to the land subject to the covenant and capable of being benefited by the covenant, and the covenant had been expressed to be for the benefit of that adjacent land; and

●●

(b) section 84 of the Law of Property Act 1925 (which enables the [Upper Tribunal] to discharge or modify restrictive covenants) shall not apply to the covenant.’ Section 609 of the Housing Act 1985 This relates to covenants entered into with a local housing authority on the disposal of land held by it for housing purposes. It provides that: ‘Where— (a) a local housing authority have disposed of land held by them for any of the purposes of this Act and the person to whom the disposal was made has entered into a covenant with the authority concerning the land, or (b) an owner of any land has entered into a covenant with the local housing authority concerning the land for the purposes of any of the provisions of this Act, the authority may enforce the covenant against the persons deriving title under the covenantor, notwithstanding that the authority are not in possession of or interested in any land for the benefit of which the covenant was entered into, in like manner and to the like extent as if they had been possessed of or interested in such land.’ It being provided that the covenant may be enforced ‘in like manner and to the like extent as if the authority was interested in land for the benefit of which the covenant was taken, the Court of Appeal in Cantrell v Wycombe DC11 confirmed the section did not mean that a positive

11

[2009] 1 P&CR 12.

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10.11  Restrictive covenants and public law

●●

covenant could be enforced against successors in title. This is because the effect was simply to make the covenant enforceable against successors in title to the same extent as if benefited land had been owned by the council when the covenant was entered into, and the owning of such land would only give rise to an ability to enforce a restrictive (not a positive) covenant against successors. The same point would apply to other statutes in such terms.12 A housing authority cannot under the ‘right to buy’ provisions in section 118 of the Act impose a covenant on the transfer of it to use the land conveyed only as a single dwelling house in order to extract a price for the release of the covenant if building on the garden land is sought in the future. Such a purpose is outside the scheme of the Act, which is for the transfer of the property in return for the consideration paid at the time, by reference to the appropriate discount, not to allow the authority to achieve a share of any subsequent development value: R v Braintree District Council, ex p Halls.13 Provision for repayment of any discount given on sale in the event of a relevant disposal being made within a prescribed period of time exists separately in that covenants to this effect are included in the transfer by reason of section 155 of the Act. Again, the principle (ie that covenants can only be imposed and operated in accordance with the scheme of the relevant Act) would apply to other statutes. Section 75 of the Mission and Pastoral Measure 2011 This legislation in relation to Church of England land provides that: ‘(1) Without prejudice to any restriction or requirement in a pastoral (church buildings disposal) scheme or a pastoral church buildings scheme to which section 58 or 59 applies, the Commissioners14 or the diocesan board of finance may, in exercising their powers under this Part to sell, give, exchange or let or, as the case may be, to let or license, any building or land, include in the conveyance, lease or other instrument such covenants imposing conditions and requirements as to the use of the building or land concerned as the Commissioners or board think necessary or expedient to give effect to the provisions of the scheme or otherwise to secure the suitable use of the building or land; and, in a case where the land is sold, given or exchanged, any such covenants shall be enforceable as if the Commissioners or board were the owners of adjacent land and the covenants were expressed to be entered into for the benefit of that adjacent land, and in the case of covenants of a positive character as if they were negative. (2) Where any such covenant is subsequently varied or released by agreement, any sum of money received by a diocesan board of finance in consideration of the variation or release of a covenant imposed by the board shall be paid to the Commissioners and section 63(5) shall apply in relation to the sum so paid, and in relation to any sum of money received by the Commissioners in consideration of the variation or release of a covenant imposed

12 13 14

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Unless the statute expressly provides that positive covenants can also be enforced under it – as with s 75 of the Mission and Pastoral Measure 2011, next considered. (2000) 80 P&CR 266. Ie, the Church Commissioners.

Statutes allowing enforcement by deemed ownership 10.13 by them, as it applies in relation to the proceeds of any sale or exchange under section 63(2), (3) or (4). (3) Section 84 (except subsection (2)) of the Law of Property Act 1925 (c. 20) (which enables the Upper Tribunal to discharge or modify restrictions affecting land) shall not apply in relation to conditions and requirements imposed under subsection (1).’ 10.12 This is the latest Measure so providing. Like provisions were in force prior to this Measure under the Pastoral Measure 1983 (where section 62 was to the same effect). It will be noted that it also covers positive covenants (as to which, see para 28.19 below).

Effects of such deeming provisions 10.13

The following points are to be noted:

(1) Where (as with the former section 106 of the Town and Country Planning Act 1990 sub-section (3)) the statute requires the agreement to have been ‘made under this section’, this must be shown. Where made under the provisions of a statute, a statement to that effect is likely to be contained in the body of the agreement (eg that it is made under section 106 of the Town and Country Planning Act 1990), but there seems no reason why contemporaneous extrinsic evidence could not in an appropriate case be received.15 (2) Where the local planning authority exacts a covenant on the occasion of the sale of part of its land and such covenant is expressed to be for the benefit of the authority’s retained land then, the covenant would clearly not be likely to be regarded as made for the benefit of notional adjacent land under the section.16 (3) The particular wording of the statute in question needs to be looked at – for example, section 609 of the Housing Act 1985 requires the covenant to have been ‘entered into … with the local housing authority’. Obviously, a local authority can hold land either simply as a landowner (for any number of purposes) or as local housing authority, and if the disposal is of land held as local housing authority, this would (again) be expected to be made clear in the conveyance. In the absence of it, again, however, there seems no reason why extraneous evidence should not be received in an appropriate case. (4) The method of protection by registration is generally different (an entry in the Local Land Charges Register rather than the Land Charges Register or Land Register – see below). (5) Where the statutory power is exercised, the covenant is taken by the public body for whatever its public purpose is – in the case of the National 15

This is in contrast to the provisions of the current s 106, which specifies in sub-s (9) that under the new regime (set out in Chapter 32 below) that in order to create a planning obligation the deed creating the obligation must state that the obligation is a planning obligation for the purposes of s 106 (see para 32.41). 16 And this conclusion is supported by National Trust for Places of Historic Interest or Natural Beauty v Midlands Electricity Board [1952] Ch 380, where the covenant was expressly entered into ‘for the benefit of Midsummer Hill’ (forming one of the heights of the Malvern Hills).

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10.13  Restrictive covenants and public law Trust, for example, as custodian of the country’s natural beauty and historic  buildings: see Gee v National Trust.17 Accordingly, as the case makes clear, applications for release of such covenants, where possible under section 84 of the Law of Property Act 1925, as in the case of the National Trust,18 fall to be considered in the light of any damage to the relevant interests. (6) The words ‘as if the agreement had been expressed to be made for the benefit of such’ notional adjacent land, result in a presumption that such notional land is touched and concerned by the covenant,19 thus avoiding speculation as to whether the notional land is of a kind which is capable of benefiting from the covenant. Accordingly, no evidence could be adduced to demonstrate that it could not benefit. The purpose of the deeming provision is simply machinery to enable the public body in question to enforce the restriction.20 However, the extent to which the public purpose for which the statute allows the covenant to be taken will be affected by discharge or modification under section 84 of the Law of Property Act 1925 (where it is possible under the statute) will be relevant on such an application.21 As will be appreciated, in so far as land which is notional does not lend itself to disposal either as a whole or as to part, the fact that the annexation is to the land as a whole and not to any part or parts cannot present any problem. (7) The original version of section 106 of the Town and Country Planning Act 1990 (and its predecessor statutes),22 subsection (3) limits enforcement beyond the covenantor himself to being ‘against persons deriving title under’ him. Unlike the limit on enforceability laid down by equity under the ordinary rules (which merely excludes the bona fide purchaser for valuable consideration of a legal estate without notice), this would appear, on the face of it, not to include a person acquiring a title by adverse possession as against the covenantor. Such a person’s title is not derived from the dispossessed owner but from the relevant Limitation Act. His position was described by Lord Radcliffe in Fairweather v St Marylebone Property Co Ltd23 as follows: ‘He is not at any stage of his possession a successor to the title of the man he has dispossessed. He comes in and remains in always by right of possession, which in due course becomes incapable of disturbance as time exhausts the one or more periods allowed by statute for successful intervention. His title, therefore, is never derived through but arises always in spite of the dispossessed owner.’ On this basis, enforcement against a squatter under this section would therefore seem technically to depend on the planning authority actually being possessed of benefited land.

17 [1966] 1 WLR 170, at pp 174–175. 18 Subject to s 27 of the National Trust Act 1971 (see para 10.11 above). 19 See Marten v Flight Refuelling Ltd [1962] Ch 115, per Wilberforce J at p 136, cited above at para 1.36. 20 Gee, p 174. 21 Ibid. 22 And like, indeed, the current version of s 106, as to which see Chapter 32 below. 23 [1963] AC 510, at p 535.

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Statutes allowing enforcement etc 10.16 However, this seems both contrary to common sense and repugnant, in that a person who acquires title by squatting would be in a better position than someone who acquires the land normally and for due consideration, and it would enable such a person to ignore covenants imposed under statute for the public benefit. Having regard to the purpose of the legislature, and the anti-repugnance rule of statutory construction,24 it may well be that the higher courts would consider Parliament to have had an intention that the words should have a wider application than the technical one indicated by Fairweather and should include squatters who in a practical sense acquire title in succession to the owner (ie upon the extinguishment of his title). (8) Unless there is express exclusion of the Upper Tribunal’s jurisdiction under section 84(1) of the Law of Property Act 1925 (as in the case of section 5(2)(b) of the Forestry Act 1967, and section 75(3) of the Mission and Pastoral Measure 201125), there is nothing to prevent an application from being made to the Tribunal for the discharge or modification of such a covenant on any of the grounds specified in section 84(1). In fact, many applications have been made, some of which have been successful,26 and these are considered in the relevant context in Chapters 19 onwards.27 10.14 Where the restriction is enforceable by a body other than a local authority, minister or government department (eg under section 8 of the National Trust Act 1937), such covenants will fall to be registered in the same way as any other restrictive covenant, save that the word ‘restrictive’ may be omitted from the entry in the register.

(B) STATUTES ALLOWING ENFORCEMENT WITHOUT INTRODUCING THE MECHANISM OF DEEMING PROVISIONS 10.15 These statutes operate by independently providing that a covenant entered into by a person with the local authority (or the local authority acting in a particular capacity) in relation to specific matters shall be enforceable without any reference to land owned by the authority. Such statutes generally cover not just restrictive covenants, but both negative and positive covenants. They will therefore be considered in Chapter 28 below.28 10.16 Section 33 of the Local Government (Miscellaneous Provisions) Act 1982 can usefully be taken to provide an example at this point, however.

24 As to which, see. eg Benion on Statutory Interpretation,6th edn,(2013 LexisNexis), Code S158, at p 430). 25 And, to a limited extent, s 27 of the National Trust Act 1937: see para 10.11 above. 26 Including Gee v National Trust for Places of Historic Interest or Natural Beauty [1966] 1 WLR 170 in the Court of Appeal. 27 The Tribunal’s jurisdiction is now excluded in the case of statutory ‘planning obligations’ entered into with a local planning authority on or after 25 October 1991 under s 106 of the Town and Country Planning Act 1990: see s 106A(10). Provision is instead made by the other subsections of s 106 for an application to be made to the local planning authority itself for discharge or modification and s 106B provides for a right of appeal to the Secretary of State for the Environment. See further below, para 32.75 et seq.The jurisdiction is also excluded in respect of covenants entered into under s 5 of the Forestry Act 1967. 28 See para 28.15 et seq.

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10.17  Restrictive covenants and public law Section 33(1) and (2), as amended, provide that: ‘(1) The provisions of this section shall apply if a principal council (in the exercise of their powers under section 111 of the Local Government Act 1972 or otherwise) and any other person are parties to an instrument under seal which— (a) is executed for the purpose of securing the carrying out of works on land in the council’s area in which the other person has an interest, or (b) is executed for the purpose of regulating the use of or is otherwise connected with land in or outside the council’s area in which the other person has an interest, and which is neither executed for the purpose of facilitating nor connected with the development of the land in question.29 (2) If, in a case where this section applies— (a) the instrument contains a covenant on the part of any person having an interest in land, being a covenant to carry out any works or do any other thing on or in relation to that land, and (b) the instrument defines the land to which the covenant relates, being land in which that person has an interest at the time the instrument is executed, and (c) the covenant is expressed to be one to which this section or section 126 of the Housing Act 1974 (which is superseded by this section)) applies, the covenant shall be enforceable (without any limit of time) against any person deriving title from the original covenantor in respect of his interest in any of the land defined as mentioned in paragraph (b) above and any person deriving title under him in respect of any lesser interest in that land as if that person had also been an original covenanting party in respect of the interest for the time being held by him.’ The requirements an agreement must fulfil in order to come within the section are clearly set out in the body of the provision. 10.17 Other examples of such statutes will be referred to in detail in Chapter 28, as they cover not only restrictive covenants but also other negative covenants30 and positive covenants, but they include the following: ●● ●●

section 35 of the Highways Act 1980 (‘walkway’ agreements); and section 39 of the Wildlife and Countryside Act 1981 (management agreements).

10.18 In addition, as stated above,31 with effect from 25 October 1991, the original section 106 of the Town and Country Planning Act 1990 was replaced

29 Because s 106 of the current version of s 106 of TCPA 1990 would separately cover that situation. 30 Ie, those not restrictive of the use of the land. 31 See para 10.9.

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Statutes allowing enforcement etc 10.21 by a new section 106 which introduced statutory ‘planning obligations’ which could be enforced under the terms of the statute itself without any reference to deemed ownership of adjoining land by the local planning authority. These are of major importance and are considered in Chapter 32 below.

Local Acts 10.19 Numerous local Acts also contain provisions designed to secure the running of the burden of covenants in circumstances where they would not run under the general law. 10.20 Foremost amongst these is the Greater London Council (General Powers) Act 1974, which is of major importance as the power given to London Borough Councils by section 16 of the Greater London Council (General Powers) Act 1974 continues to apply to these authorities throughout Greater London, notwithstanding that it no longer applies to the Greater London Council which has been abolished. Section 16 provides that every undertaking given to, or agreement with, such an authority by the owner of any legal estate in land which (a) is made under seal in connection with the land, and (b) is expressed to be given or made in pursuance of the section shall be enforceable not only against the owner joining in the undertaking or agreement, but also against the successors in title of any such owner and any person claiming through or under them. Such an undertaking or agreement is to be treated as a local land charge.32 Any person against whom such an undertaking or agreement is enforceable shall be entitled to require a copy thereof from the local authority without payment.33 Section 16 was recently relied on by the Court of Appeal in R (Khodari) v Royal Borough of Kensington and Chelsea34 to uphold the enforceability of an obligation entered into by a developer with the Council in relation to a planning application in circumstances where section 106 of the Town and Country Act 1990 did not cover the obligation in question.35 10.21 Other local or private Acts containing provisions rendering covenants made under them enforceable by the bodies named in them include the Wentworth Estate Act 1964, the Lincoln’s Inn Act 1860 (regulating the maintenance of buildings in the Inn), the Green Belt (London and Home Counties) Act 1938, section 22, and the London Building Acts 1930 and 1939. Many local authorities will be found to have (or to have had) special powers under a local Act and the possible existence and effect of such an Act on the enforceability of covenants entered into with a local authority will need to be considered in any particular case.

32 33 34 35

See subsection (2), and now the Land Charges Act 1975. Subsection (3). [2017] EWCA Civ 333. See paras 32.36–32.37 below.

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10.22  Restrictive covenants and public law

The covenant must be imposed and operated within the scheme of the Act under which it is imposed 10.22 Covenants can only be imposed and operated in accordance with the scheme of the relevant Act and the powers of the body imposing it. Accordingly, as set out above,36 a housing authority cannot, for example, under the ‘right to buy’ provisions in the Housing Act 1985, impose a covenant on the transfer of it to use the land conveyed only as a single dwelling house in order to extract a price for the release of the covenant if building on the garden land is sought in the future. Such a purpose is outside the scheme of the Act, which is for the transfer of the property in return for the consideration paid at the time, by reference to the appropriate discount, not to allow the authority to achieve a share of any subsequent development value, and is unlawful: R v Braintree District Council, ex p Halls.37

BURDEN OF PUBLIC LAW COVENANTS REGISTRABLE AS LOCAL LAND CHARGES 10.23 By virtue of the combined effect of the provisions of section 1(1)(b)(ii), (c)(ii), (2)(a) and (c) of the Local Land Charges Act 1975,38 a restriction on the use of land enforceable by a local authority39 or minister or government department under any covenant or agreement (other than one made between a lessor and a lessee) made after 1925 which is binding upon successive owners of the land otherwise than by reason of such local authority, minister or government department owning an interest in the benefited land, is registrable as a local land charge against the burdened land. The individual Acts also generally specifically so provide. 10.24 This distinguishes restrictive covenants which are enforceable by a public body against the covenantor’s successors only by reason of statutory ‘deemed’ ownership by the public body of benefited land, or which are specified simply to be enforceable by the public body (which, in both types, are registrable only as local land charges) on the one hand, and restrictive covenants which are enforceable against the covenantor’s successors because of the actual ownership by the public body of an interest in benefited land (which are registrable only as general land charges under the Land Charges Act 1972 or, in the case of registered land, by corresponding protection on the register of title) on the other. 10.25 The two forms of protection are mutually exclusive and not cumulative since by section 2(5) of the Land Charges Act 1972, a restrictive covenant which is registrable as a local land charge is specifically excluded from being a Class D(ii) land charge under that Act. In the case of registered land, a local land charge is an unregistered interest which overrides both first registration and registered dispositions (see the Land Registration Act 2002, Schedule 1, para 6 and Schedule 3, para 6). Although it 36 37 38 39

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See para 10.11 above, third bullet point. (2000) 80 P&CR 266. Which came into operation on 1 August 1977 (SI 1977/984). Including, for the purposes of s 1, the Broads Authority: ibid, section 1(3). It is difficult to see (unless the Broads Authority is incapable of owning any interest in land) why this extension of the meaning of ‘local authority’ does not equally apply to s 2(c).

Failure to register covenants as local land charges 10.28 amounts to an overriding interest, it may alternatively be the subject of a notice or restriction. In practice, however, local land charges are usually just entered in the local land charges register, which affords sufficient protection. 10.26 The court has power under section 5(5) of the Land Charges Act 1975 Act to order the cancellation of the registration of a local land charge.

FAILURE TO REGISTER COVENANTS AS LOCAL LAND CHARGES 1  Restrictive covenants which remain equitable 10.27 Before 1 August 1977, if a restrictive covenant registrable as a local land charge was not so registered, it would be void against a purchaser of a legal estate in the land who purchased before 1977 whether he had notice of the covenant or not: see the provisions (then in force) of section 15(1) of the Land Charges Act 1925. From 1 August 1977, section 10(1) of the Local Land Charges Act 1975 provides as follows. ‘Failure to register a local land charge in the local land charges register shall not affect the enforceability of the charge but where a person has purchased any land affected by a local land charge, then— (a) in a case where a material personal search of the appropriate local land charges register was made in respect of the land in question before the relevant time, if at the time of the search the charge was in existence but not registered in that register; or (aa) if the appropriate local land charges register is kept in electronic form and a material personal search of that register was made in respect of the land in question before the relevant time, if the entitlement to search in that register conferred by section 8 above was not satisfied as mentioned in subsection (1A) of that section; or (b) in a case where a material official search of the appropriate local land charges register was made in respect of the land in question before the relevant time, if the charge was in existence at the time of the search but (whether registered or not) was not shown by the official search certificate as registered in that register, the purchaser shall (subject to section 11(1) below) be entitled to compensation for any loss suffered by him in consequence.’ 10.28 In Pound v Ashford Borough Council,40 the High Court held that the right to compensation under the section is tied to the fact that the charge is enforceable against the purchaser notwithstanding non-registration, and that the compensation he is entitled to is therefore limited to the loss suffered by him as a result of the fact it is enforceable against him. Accordingly, a claim that had the local land charge – based there on the purchaser’s house being a listed building (which should have been registered in the local land charges register

40

(2004) 21 P&CR 2.

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10.29  Restrictive covenants and public law under section 54 of the Town and Country Planning Act 1990) – been registered, planning permission for development which affected the value of the purchaser’s house would not have been granted, so that he would not have suffered such loss, was struck out. 10.29 Where, under the relevant statutory provisions, a restrictive covenant is made enforceable as if the local planning authority or (as the case may be) other public body was possessed of adjoining land capable of benefiting from the covenant, then it is considered that the inherent nature of the restrictive covenant remains the same, namely that it retains its character as an equitable interest. On this basis, although by section 10(1) of the Local Land Charges Act 1975 the non-registration of a local land charge no longer affects its enforceability, as an equitable interest, it will depend for its enforcement against a bona fide purchaser for value of a legal estate in the burdened land upon whether he had actual or constructive notice of the covenant ascertained by reference to the traditional doctrine of notice.41 Where the land is registered land, such unregistered restrictive covenant also takes effect as an overriding interest by reason of the Land Registration Act 2002, Schedule 1, para 6 and Schedule 3, para 6. Again, it will depend for  enforcement under that regime on the matters just mentioned since the status of being an overriding interest does not alter or enhance the inherent limits of enforceability of an equitable interest.42

2  Covenants which have legal status 10.30 Where, under the relevant statutory provisions, a restrictive covenant is made statutorily enforceable against successors and persons acquiring derivative interests in the burdened land without praying in aid the fiction of deemed benefited land, then it is considered that there must thereby be created a new form of legal interest in the land which takes effect according to its statutory terms.43 This would be the position in the case of covenants entered into under section 39(3) of the Wildlife and Countryside Act 1981, section 33 of the Local Government (Miscellaneous Provisions) Act 1982 and section 35(4) of the Highways Act 198044 (or the new section 106 planning obligations dealt with in Chapter 32) for example. In such cases it is therefore considered that, as a legal restrictive (or positive) covenant, the covenant would be enforceable in rem (according to the statutory terms) independently of any question of notice, although, in fact, since 1 August 1977 such a covenant would be covered by section 10(1) of the Local Land Charges Act 1975 (see para 10.29 above).

41 Now encapsulated in s 199(1)(i), (ii) and (2) of the Law of Property Act 1925 considered in Chapter 9. 42 See City of London Building Society v Flegg [1988] AC 54, HL. 43 In the case of the positive obligation to repay, in certain circumstances, part of the discount allowed on the purchaser of a council house, s 156(1) of the Housing Act 1985 expressly declares such obligation as taking effect ‘as if it had been created by deed expressed to be by way of legal mortgage’. 44 For the text of these provisions, see Chapter 28.

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Holding statutory powers to deal with land 10.33

II: PUBLIC BODIES ACQUIRING LAND BURDENED BY RESTRICTIVE COVENANTS POWERS OF COMPULSORY ACQUISITION 10.31 No public body can acquire land compulsorily unless specifically authorised to do so by the provisions of an ‘enabling’ Act of Parliament or (particularly in the case of war) regulations made thereunder. But whilst such Acts are the source of compulsory powers, their exercise has, since the middle of the last century, usually been regulated by reference to a general code laid down by a ‘procedural’ Act. Thus, earlier enabling Acts usually incorporated many of the provisions of the Lands Clauses Consolidation Act 1845 (‘the 1845 Act’). 10.32 Current enabling Acts, whilst continuing to incorporate certain provisions of the 1845 Act, rely more generally on the incorporation of provisions in the Compulsory Purchase Act 1965 (‘the 1965 Act’). The codes laid down by each of these Acts proceed on the basis of the end result being a compulsory transfer of the land which is the subject of the compulsory purchase but not a transfer of interests benefiting other land which are enjoyed over the compulsorily acquired land, such as restrictive covenants. Accordingly, the initial effect of a compulsory acquisition of land is that such land becomes vested in the acquiring body subject to any restrictive covenants (or easements and the like) affecting, the land.45

HOLDING STATUTORY POWERS TO DEAL WITH LAND 10.33 The same applies where a statutory body already owns land subject to restrictive covenants and subsequently acquires statutory powers for dealing with the land.46 It may be that an acquiring body could (assuming it were practicable to do so) exercise its compulsory powers by additionally serving a notice to treat on the persons entitled to the benefit of a restrictive covenant.47 However, this is not necessary and the body will be allowed to carry into effect the statutory purpose for which the burdened land was acquired without the need for this.

45

Ellis v Rogers (1884) 29 ChD 661; Manchester, Sheffield and Lincolnshire Rly Co v Anderson [1898] 2 Ch 394, at p 404; Marten v Flight Refuelling Ltd [1962] Ch 115, at p 140; Re 6, 8, 10 and 12 Elm Avenue, New Milton [1984] 1 WLR 1398 (Scott J). 46 See Lloyd v London Chatham and Dover Rly Co (1865) 12 LT 363. 47 See Ellis v Rogers (1885) 29 ChD 661, at p 665; Kirby v School Board for Harrogate [1896] 1 Ch 437, at p 401. Or, perhaps, otherwise bringing about the compulsory extinguishment of the covenant: see the (cryptic) observations of Wilberforce J in Marten v Flight Refuelling Ltd [1962] Ch 115: ‘It is not said that the covenant has been taken over or extinguished by any statutory procedure – as can be done under the Lands Clauses Acts’.

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10.34  Restrictive covenants and public law

EFFECT ON RESTRICTIVE COVENANTS OF THE COMPULSORY ACQUISITION OF THE BURDENED LAND (OR ITS ACQUISITION BY AGREEMENT IN CIRCUMSTANCES WHERE IT COULD HAVE BEEN COMPULSORILY ACQUIRED) 10.34 It should be pointed out at the start that in relation to restrictive covenants the position of an acquiring body which has powers of compulsory acquisition is the same whether those powers are actually invoked or the land in question is acquired for the statutory purpose by voluntary agreement.48 Accordingly, reference to ‘compulsory purchase’ should be taken to include land so acquired.

1  The continued existence of restrictive covenants 10.35 The compulsory acquisition of the burdened land has no immediate effect on the continued existence of restrictive covenants affecting the land.49 There are also no express provisions in either the 1845 Act or the 1965 Act preventing their enforceability or providing for the payment of compensation rather than any other remedy such as an injunction in the event of non-compliance therewith. 10.36

Section 68 of the 1845 Act provided that:

‘If any Party shall be entitled to any Compensation in respect of any Lands, or of any Interest therein, which shall have been taken for or injuriously affected by the Execution of the Works, and for which the Promoters of the Undertaking shall not have made Satisfaction under the Provisions of this or the special Act, or any Act incorporated therewith, and if the Compensation claimed in such Case shall exceed. the Sum of Fifty Pounds,50 such party may have the same settled either by Arbitration or by the Verdict of a Jury, as he shall think fit.’51 On the face of it, this merely laid down a procedure for settling the amount of compensation in relation to any land or interest in land injuriously affected by the execution of works in respect of which there was an entitlement to compensation, when the sum claimed exceeded £50,52 and such compensation was provided to be payable.53

48

Kirby v School Board for Harrogate [1896] 1 Ch 437, CA; Brown v Heathlands Mental Health National Health Service Trust [1996] 1 All ER 133. See also Re 6, 8, 10 and 12 Elm Avenue, New Milton [1984] 1 WLR 1398, at 1403H–1404G. 49 Re 6, 8, 10 and 12 Elm Avenue, New Milton [1984] 1 WLR 1398 (Scott J); Marten v Flight Refuelling Ltd [1962] Ch 115. 50 The reference to this limit of £50 was removed by the 1965 Act, section 39(4), Sch 8, Part III. 51 The reference to arbitration or the verdict of a jury was also removed by the 1965 Act. 52 The reference to this limit of £50 was removed by the 1965 Act, section 39(4), Sch 8, Part III. 53 Indeed, in Hammersmith & City Railway Co v Brand (1869) LR 4 HL 171, Lord Cairns observed (at pp 217–218) that s 68 ‘does not define the conditions under which the person whose land has been injuriously affected is to be entitled to compensation. It rather assumes that the right to compensation has been given in some other enactments, and it contents itself with pointing out the manner in which that compensation shall be obtained’.

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Effect on restrictive covenants of compulsory acquisition of land etc 10.40 10.37 However, in Kirby v School Board for Harrogate,54 the Court of Appeal took it for granted that a restrictive covenant could not be enforced by injunction or otherwise to prevent the carrying out of the statutory purpose for which land had been compulsorily purchased, and held this applied equally where it had acquired instead by agreement. It went on to hold that section 68 of the 1845 Act (though it appeared on its face to be merely procedural) operated to give a right to compensation in any case where an interest in land such as a restrictive covenant was injuriously affected by the execution of works which the statutory purpose meant the covenant could not be enforced to prevent.55 The same view was taken by the Court of Appeal in Long Eaton Recreation Grounds Co v Midland Rly Co.56 10.38 The effect of these cases has since been expressly adopted as representing the law by the provisions of section 10(1) and (2) of the 1965 Act. Section 10 provides that: ‘(1) If any person claims compensation in respect of any land, or any interest in land, which has been taken for or injuriously affected by the execution of the works, and for which the acquiring authority have not made satisfaction under the provisions of this Act, or of the special Act, any dispute arising in relation to the compensation shall be referred to and determined by the [Upper Tribunal]. (2) This section shall be construed as affording in all cases a right to compensation for injurious affection to land which is the same as the right which section 68 of the Lands Clauses Consolidation Act 1845 has been construed as affording in cases where the amount claimed exceeds fifty pounds.’ 10.39 Notwithstanding that section 68 was on its face a purely procedural section, and whatever the logic or otherwise of the decisions in the Kirby and Long Eaton cases, as Lord Hoffmann said in Wildtree Hotels Ltd v Harrow London Borough Council,57 section 10(2) of the 1965 Act showed Parliament did not want the principles established to be re-examined. Accordingly, they are to be taken to represent the law.

2  The extent of the permitted non-compliance 10.40

Under this heading, there are two questions to be considered:

(a) Does the permitted non-compliance extend not only to the carrying out of works on the land or does it also extend to a use of the land which is prohibited by the covenant?

54 [1895] 1 Ch 437. 55 See Kirby v School Board for Harrogate [1896] 1 Ch 437 and Long Eaton Recreation Grounds Co v Midland Rly Co [1902] 2 KB 574; Re Simeon and Isle of Wight RDC [1937] Ch 525. As to the latter point, see, also, Clark v School Board for London (1874) 9 Ch App 120. 56 [1902] 2 KB 574. 57 [2001] 2 AC 1, at pp 6H–7A.

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10.41  Restrictive covenants and public law (b) Does any particular non-compliance fall within the scope of a given statutory purpose?

(a)  Is a non-conforming use permitted? 10.41 It might be thought that if the statutory purpose consists of the construction of works and their subsequent use then both the construction and the use would be permitted in defiance of a restrictive covenant which prohibited them. However, the position is not so simple. 10.42 In both Kirby v School Board for Harrogate58 and Long Eaton Recreation Grounds Co v Midland Rly Co59 the non-compliance concerned consisted of the carrying out of works of construction rather than the subsequent use of the works when constructed, and a right to compensation in such a case was clearly provided for by section 68 of the 1845 Act. However, in both cases the court linked the permitted non-compliance to the availability of compensation under section 68 (the implication being that if compensation was not available under section 68 there would be no permitted non-compliance with a covenant). In the absence of any other statutory provision which provides for the payment of compensation on the exercise of a particular statutory power, any right to compensation is limited to the situation covered by section 68, and now section 10 of the 1965 Act, which provides only for compensation in respect of interests injuriously affected by ‘the execution of works’ – not for the use of them.60 10.43 In Fletcher v Birkenhead Corpn61 the Court of Appeal held that compensation was payable under section 6 of the Waterworks Clauses Act 1847 to persons ‘injuriously affected by the construction or maintenance of the works thereby authorised’ not only in respect of the construction of the works but also in respect of the subsequent use of the works. However, there the powers under the 1847 Act included not just the construction but the ‘supply of waterworks’ so as to cover not just the building of the works by the water undertaker but also the pumping of water, so as to clearly authorise this and section 6 of the Act referred to ‘maintenance’ of the works, which it was held meant more than just ‘construction’. Compensation was expressly payable under section 6 to anyone interested in the land whose interest was affected not just by the construction of the works but by the maintenance of the works on the land, so that compensation was payable for the maintaining of the supply of water by pumping. Accordingly, there was a right to compensation for the injurious effects of this.62

58 [1896] 1 Ch 437, CA. 59 [1902] 2 KB 574. 60 See Hammersmith and City Railway Co v Brand (1869) LR 4 HL 171, where the House of Lords (Lord Cairns dissenting) decided that this meant that there could be compensation only for the effects of the construction of a railway and not for its operation. Accordingly, as pointed out by Lord Hoffmann in Widtree Hotels Ltd v Harrow LBC [2001] 2 AC 1, at 7H-8A, if an embankment was constructed which obstructed the claimant’s light or access he could claim compensation under s 68 for the execution of those works, but not for noise, vibrations, or the smell of passing trains which resulted from the use of them. 61 [1907] 1 KB 205. 62 The earlier cases of Hammersmith and City Rly Co v Brand (1869) LR 4 HL 171 and Hopkins v Great Northern Rly Co (1877) 2 QBD 224 were distinguished on the ground that in those cases

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Effect on restrictive covenants of compulsory acquisition of land etc 10.46 10.44 As has been mentioned, in contrast to this, section 68 of the 1845 Act (and section 10 of the 1965 Act) refers simply to compensation in relation to interests injuriously affected by the ‘execution of works’. In Re Simeon and Isle of Wight Rural District Council,63 a case which concerned section 68 of the 1845 Act, Luxmoore J appeared, however, to go further. He appeared to hold that the words of the section (which simply provides for compensation to persons whose interest in land is ‘injuriously affected by the execution of the works’) were wide enough to include not only the construction of the works but also the use of those works. In the course of his judgment, Luxmoore J said:64 ‘The words of section 68 of the Lands Clauses Consolidation Act are not, as in the case of section 6 of the Railways Clauses Act, “construction of the works” but “execution of the works”. In my judgment the latter words are wider than the former and include the exercise, that is the carrying out and the execution of the appropriate statutory powers.’ 10.45 However, as HH Judge Rich QC sitting as a High Court judge in Thames Water Utilities v Oxford City Council65 pointed out, the Simeon case was concerned with section 51 of the Public Health Act 1857, which authorised the construction and maintenance of waterworks for the supply of water which involved the use of the land to draw water from it. The operation of the waterworks to extract water, authorised by section 51 of the Public Health Act 1857, was in itself ‘the execution of the works’, and covered by what was by section 68 to be compensated for: see p 173.66 Accordingly (as indeed Luxmoore J pointed out at p 539 of Simeon itself) the same reasoning as in Fletcher v Birkenhead Corporation applied. Statutory compensation was payable in respect of this under section 68. Particular statutes may, however, provide for the use by a body of land for particular purposes without providing for compensation, and the statutory authorisation will nonetheless override any covenants preventing this. 10.46 In Re 6, 8, 10 and 12 Elm Avenue, New Milton,67 section 28 of the Road Traffic Regulation Act 1967 provided that a local authority may ‘provide within their district suitable parking places for vehicles’, and provided for land to be purchased compulsorily for such purposes. Scott J, after referring to the Kirby and Long Eaton cases (but not the Fletcher or the Simeon cases) said: ‘Those authorities provide, in my view, clear support for the proposition that notwithstanding that in the present case the acquisition by the Lymington Borough Council of the land in question was not effected by compulsory

63 64 65 66 67

the statutory provision which applied was s 6 of the Railways Clauses Consolidation Act 1845 (which applied to the exclusion of the 1845 Act – including s 68) under which compensation was payable to persons ‘injuriously affected by the construction’ of the railway, the word ‘maintenance’ not appearing. [1937] Ch 525. Ibid, at p 539. [1991] 1 EGLR 167. And p 539 of Simeon, where Luxmoore J said, ‘the statutory powers in this case are to construct and maintain waterworks and to supply water. In order to supply water it is necessary to draw water fro the land taken, and this is an execution of the works authorised’. [1984] 1 WLR 1398.

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10.47  Restrictive covenants and public law process but by agreement, none the less the benefit of the restrictive covenants cannot stand in the way of the use of those properties by the council for the statutory purposes for which they were acquired.’ He held that restrictive covenants over the land which prevented this type of use (which was held to constitute a ‘business use’ within the meaning of the covenants) could not be asserted so as to prevent the use of the land for the statutory purpose of providing car parking facilities (at p 1405C). What was directly in issue there was, in fact, the construction of the car park, but Scott J put it in terms that the use of the land for the statutory purposes for which it was required was unable to be prevented. At p 1405A he also referred to the fact that ‘the compensation procedure is available to compensate those entitled to the benefit of the restrictive covenants if that use should injuriously affect their land’. 10.47 However, the inability to enforce the covenant did not depend on the availability of compensation under section 68 or section 10 as such, although it was available there for the construction of the carpark, which is what was in issue. Section 28 of the Road Traffic Regulation Act 1967 expressly provided that it was a statutory function of the authority to provide car parking facilities, and this was so whether compensation was available to those whose covenants were affected by the use for statutory purposes or not. ‘Providing car parking facilities’ would have been an ongoing act authorised by the statutory powers, preventing the enforcement of covenants which would thwart them, whether compensation was available or not. 10.48 The rules apply if land is acquired by a public body pursuant to (or against the background of) compulsory powers and cover use for the statutory purposes for which it was acquired, although compensation is only available under section 10 of the 1965 where works of execution are involved. It follows that if there is merely a change of use of the land pursuant to statute, with no works at all being executed, whilst enforcement of the covenant will be prevented by reason of this, the person with the benefit of a restrictive covenant cannot be entitled to compensation under section 10 – or to any compensation at all therefore unless provided for by the statute itself, or some other statute. 10.49 In Brown v Heathlands,68 Chadwick J considered that the principle arising from Kirby and Re Elms Avenue, New Milton was that: ‘… where the legislature has entrusted a statutory body with functions to be discharged in the public interest and given it power to acquire and hold land for the purpose of discharging that function, private rights of restriction affecting the land are not to be enforced by injunction or damages because the legislature has provided for an exclusive remedy by way of statutory compensation’ [emphasis added]. 10.50 However, this was held to be inaccurate by HH Judge Rich QC sitting as a High Court judge in Thames Water Utilities Ltd v Oxford Council69 (below). Whether compensation is payable or not, if land is compulsorily (or, in lieu of the use of such compulsory powers, voluntarily) acquired for use (for example, for use as a mental health establishment under the National Health Service and 68 69

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[1996] 1 All ER 133. [1999] 1 EGLR 167.

Effect on restrictive covenants of compulsory acquisition of land etc 10.54 Community Care Act 1990, which Chadwick J was there considering) that will prevent enforcement of the covenant by injunction or otherwise, to prevent or hinder the statutory purpose for which it is so acquired. The non-availability of injunctive relief does not depend on compensation being available, but reflects the fact that Parliament has made such provision for compensation as it thinks fit (which may be none). 10.51 Accordingly, where what is relied on by a local authority is simply a specific statutory power in an Act to carry out works – with subsequent use not itself being for any statutory purpose, whilst those works will be authorised and mean covenants preventing them cannot be enforced, so far as subsequent use is concerned there will be nothing to prevent the enforcement of any covenant in the ordinary way (notwithstanding no compensation is available under section 10 in relation to that subsequent use contrary to the covenant). 10.52 This is the situation that arose in Thames Water Utilities Ltd v Oxford City Council Covenants70 in connection with the originally enacted section 237 of the Town and Country Planning Act 1990 (TCPA 1990). Judge Rich QC pointed out that in the Simeon case the use of the land to draw water from, and the operation of the waterworks to extract water from it, authorised by section 51 of the Public Health Act 1857 was ‘the execution of the works’, and was therefore covered by section 68 under which compensation was payable: see p 173 of Simeon. Accordingly (as indeed Luxmoore J pointed out at p 539 of Simeon itself) the reasoning in Fletcher v Birkenhead Corporation applied. However, as Judge Rich said (also at p 173): ‘Mere use is not works’. 10.53 Accordingly, in the Thames Water Utilities Ltd case, Judge Rich held that whilst section 237(1) of the TCPA 1990, as then enacted, statutorily permitted the construction of a football stadium by a local authority, which overrode enforcement of any land covenants to the contrary, and by subsection (4) gave compensation to those (such as covenantees) whose interests were injuriously affected by such works, this did not statutorily authorise the subsequent use of the land as a football club, so that covenants preventing that could still be enforced. The absence of provision for compensation in relation to any such use simply supported this (see p 175).71 10.54 Although it seems somewhat contrary to common sense that a statute would authorise works but not the use of them,72 (a) the wording of the statute expressly referred there just to the authorisation of works (which were not going to be used for any purpose by any public body but simply used by an ordinary football club operator), and (b) in the case of any doubt as to the extent of a statutory power, it will usually be construed so as not to involve the appropriation of third party rights where there is no compensation provided for (as Judge Rich pointed out at p 175).

70 [1999] 1 EGLR 167. 71 As did the contrasting wording of ss 238 and 239, authorising consecrated land or burial grounds ‘to be used’ by any person in any manner in accordance with planning permission notwithstanding any restriction or obligation imposed by ecclesiastical law. 72 And Judge Rich’s decision has been the subject of criticism, eg at [2008] JPL 9.

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10.55  Restrictive covenants and public law

Position under TCPA 1990, s 237 (now under Housing and Planning Act 2016, ss 203–204) 10.55 Following the Thames Water Utilities decision, the originally enacted version of section 237 was altered73 (to add a new subsection (1A)) so that, where it applied, uses as well as execution of works were statutorily permitted by it, with those affected being entitled to compensation. Section 237 has now been replaced in its entirety by sections 203 and 204 of the Housing and Planning Act 2016, which likewise cover use, and will be considered further below.74

General principles remain the same 10.56 As will be appreciated, though, the general principle set out para 10.51 above is not affected by this specific change in relation to section 237, or, as it now is, sections 203 and 204 of the 2016 Act.

(b)  What is the scope of the statutory purposes in question? 10.57 In determining whether the particular purpose to which land authorised to be acquired for given statutory purposes is put falls within the scope of those purposes, the sole question is whether what is being done on the land comes, as a matter of statutory interpretation, within those purposes and not whether the way in which the land is being used is a reasonable way of implementing those purposes. Thus, in Hawley v Steele,75 where the War Department acquired land under the Defence Act 1842 for military purposes, the Court of Appeal held that the use of such land as a rifle range for training purposes was a military purpose and that it was for the War Department, not the court, to decide which of the various military purposes it wished to pursue on the land. 10.58 An example of a detailed consideration of the question whether particular activities fell within the scope of the relevant statutory powers is provided by the decision of Wilberforce J in Marten v Flight Refuelling Ltd.76 The facts in that case are as follows: Crook Farm, comprising some 562 acres and forming part of the Crichel Estate in Dorset, was sold in March 1943 to a purchaser who covenanted that no part of the land should at any time be used for any purpose other than agricultural purposes without the previous written consent of the vendor. At that time the Air Ministry was in possession of some 200 acres of the farm, having in July 1942 requisitioned that land under statutory powers for use as an aerodrome. In 1947 the Air Ministry granted a licence to the defendant company (whose ‘moving spirit’ was Sir Alan Cobham) to occupy the whole of the requisitioned 73 74 75 76

234

By s 194 and Sch 9 to the Planning Act 2008, effective from 6 April 2009. See para 10.68 et seq. (1877) 6 ChD 521. The action was for nuisance and did not involve a restrictive covenant. [1962] Ch 115.

Effect on restrictive covenants of compulsory acquisition of land etc 10.59 land for the purpose of maintaining the airfield and carrying on its industrial undertaking and that company remained in occupation. In July 1958, the greater part of the requisitioned land was conveyed to the Secretary of State for Air, the conveyance being expressed to be subject to the restrictive covenant so far as the same was valid, subsisting and capable of being enforced. The statutory purposes for which, under the Defence Act 1842,77 the land was acquired were the service of the Air Force or the defence of the realm. It was found as a fact that the activities of the defendant company consisted of (i) maintaining the airfield and its facilities; (ii) design and development of flight refuelling equipment and the fitting of that equipment to Royal Air Force aircraft (accounting for about 30% of the company’s activities in money terms); (iii) work on ‘meteor drones’ (about 40 per cent in money terms); and (iv) miscellaneous (between 22 to 30 per cent in money terms). Of these, (i), (ii) and (iii) were found, after detailed analysis, to fall within, or to be a reasonable concomitant of, the statutory purposes; but (iv) – which consisted largely of work for the Belgian Air Force, nuclear research work (but not for any government department) and commercial activities to do with valves and other equipment – fell wholly outside the statutory purposes. 10.59

On the above facts and findings Wilberforce J held:

(1) ‘In the ultimate analysis, the question for the court appears to me to be this: How much of the company’s activity should be treated as done for the purposes for which the airfield may be considered to have been acquired? And in answering this question the court must, as was said in Hawley v Steele,78 adopt a broad approach and must take great care not to embark on inquiries or to make distinctions in a matter which is essentially for the administrative discretion of the government’.79 (2) As to activities (i), (ii) and (iii), the defendant company could shelter behind the immunity claimable by the Air Ministry (the second defendants) since, ‘It cannot … make any difference that, instead of doing this type of work himself, he commits it to an individual or company, nor that, having chosen his instrument, he uses the latter as an independent contractor rather than as an agent, nor that, to enable the contractor to do the job, he grants him a lease or a licence. In all cases the land is being used for the statutory purposes for which it is acquired and such user is protected from attack’. (3) An injunction would be granted against the defendant company restraining it from using the land otherwise than for agricultural purposes but subject to certain provisos including the main proviso that nothing therein should be taken to prevent the user of the land by either defendant for the service of the Royal Air Force or the defence of the realm. This case demonstrates that whilst the court will adopt a ‘broad approach’ to the question of the freedom of the acquiring body as to the manner of implementing the statutory purposes, it will nevertheless scrutinise with some particularity the activities which are carried on in order to determine whether they fall within the category of those statutory purposes. 77 78 79

As extended to the Air Force by the Air Force (Application of Enactments) (No 1) Order 1918 (SI 1918/538) made under the Air Force (Constitution) Act 1917. (1877) 6 ChD 521. [1962] Ch 115, p 148.

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10.60  Restrictive covenants and public law 10.60 Where the covenant is not inconsistent with the statutory purpose, its enforcement will not be prevented – a fortiori where it assists the statutory purpose: see, eg Earl of Leicester v Wells-next-the-Sea Urban District Council.80

ALTERING THE STATUTORY PURPOSES FOR WHICH LAND WAS ACQUIRED 10.61 If land is acquired by a public body pursuant to (or against the background of) compulsory powers for purposes which are not implemented or if, having been implemented, the purposes become spent, then unless that public body has statutory power to appropriate the land to a different statutory purpose, it would prima facie be incumbent upon it to dispose of the land as superfluous lands either under the provisions of sections 127–130 of the 1845 Act or (if those provisions are not applicable) in accordance with the requirements of fair administration issued from time to time by the Department for Communities and Local Government (‘the Crichel Down Rules’).81 10.62 However, in the case of land vested in local authorities,82 such authorities have the alternative of appropriating the land ‘for any purpose for which the council are authorised by this or any other enactment to acquire land by agreement’, under section 122(1) of the Local Government Act 1972. Here again (by express provision in the subsection), an appropriation takes effect subject to any subsisting restrictive covenants but section 122(4) provides as follows: ‘(4) Where land has been acquired under this Act or any other enactment or any statutory order incorporating the Lands Clauses Acts and is subsequently appropriated under this section, any work executed on the land after the appropriation has been effected shall be treated for the purposes of section 68 of the Lands Clauses Consolidation Act 1845 and section 10 of the  Compulsory Purchase Act 1965 as having been authorised by the enactment or statutory order under which the land was acquired.’ 10.63 Accordingly, what has been said above in relation to the effect on restrictive covenants of the acquisition of the burdened land pursuant to (or against the background of) statutory powers applies equally to the appropriation by a local authority of land which it already owns. The result is that, to the extent that the purposes for which the land is appropriated involve activities or a use prohibited by a restrictive covenant, such activities or use are protected from attack by an action for an injunction or damages. Where works are involved (so that section 10 of the Compulsory Purchase Act 1965 is triggered83) or compensation is otherwise provided for, this is, of course, subject to the payment of compensation for injurious affection. 10.64 On this issue, Scott J in Re 6, 8, 10 and 12 Elm Avenue, New Milton84 observed: ‘It is not necessary for present purposes, I think, for the local authority to go further, but in my judgment it would follow also that the benefit of the 80 81 82 83 84

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[1973] 1 Ch 110. The latest version of which was published in 2015. As defined by s 270(1) of the Local Government Act 1972. See above, para 10.42 et seq. [1984] 1 WLR 1398.

Extension of immunity of LAs to private individuals & bodies 10.67 restrictive covenants could not stand in the way of use of those properties by the local authority for some other statutory purpose to which they might wish to appropriate the properties.’85

EXTENSION OF IMMUNITY OF LOCAL AUTHORITIES TO PRIVATE INDIVIDUALS AND BODIES Position of the original covenantor 10.65 Notwithstanding that the original covenantor may have ceased to have any legal or equitable interest in, or control over, the burdened land, on general principles he and his estate will (unless the terms of the covenant otherwise provide) remain personally liable by virtue of privity of contract in the event of any breach of or non-compliance with the terms of the covenant by any subsequent owner. In none of the statutory provisions which confer immunity from enforcement in the case of the burdened land being acquired or appropriated for statutory purposes does such immunity extend, in terms, to the original covenantor. 10.66 However, in Baily v De Crespigny,86 a covenant was held to be unenforceable against the original covenantor after the land had been acquired by a railway company possessing statutory powers. In arriving at this result, the court applied the principle lex non cogit ad impossibilia (‘the law does not compel the impossible’), Parliament having intervened to produce this result. Similarly, in Marten v Flight Refuelling Ltd,87 Wilberforce J, after referring to this principle, said: ‘There is no question here of suing the original [covenantor] … after an Act of Parliament has put it out of his power to comply with the covenant’. It seems clear that this principle is of general application in such cases.88

Position of licensees and lessees of the statutory body 10.67 If the public body chooses (assuming it otherwise has power so to choose89) to carry out the statutory purpose through the instrument of a private individual or company to whom it grants a licence or lease for this purpose, then the licensee or lessee will be entitled to shelter under the umbrella of statutory immunity which is conferred upon the public body.90

85 In Brown v Heathlands Mental Health National Health Service Trust [1996] 1 All ER 133, at 137e, Chadwick J observed that it was unnecessary for him to decide whether he would go as far as Scott J was willing to go in the above passage. 86 [1869–69] LR 4 QB 180. 87 As to which, see para 10.58 above. 88 The words actually used by him as reported in the ChD and WLR reports were ‘There is no question here of suing the original covenantee (namely Mr Harding) after an Act of Parliament has put it out of his power to comply with the covenant’, but ‘covenantee’ is clearly a typing error in these reports or a slip of the tongue and it should obviously say ‘covenantor’ (that being Mr Harding). The correct version appears in the report of the case at (1962) 13 P&CR 389 at p 406. 89 Cf R v Wandsworth London Borough Council, ex p Beckwith [1996] 1 WLR 60, HL. 90 Marten v Flight Refuelling Ltd [1962] Ch 115.

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10.68  Restrictive covenants and public law If, however, a licence or lease is granted to enable the licensee or lessee to pursue purposes which are not within the statutory purposes, then such a licensee or lessee is outside the shelter of the umbrella.

Housing and Planning Act 2016, sections 203 and 204 10.68 These sections replace section 237 of the Town and Country Planning Act 1990. Section 203 provides as follows: ‘(1) A person may carry out building or maintenance work to which this subsection applies even if it involves— (a) interfering with a relevant right or interest, or (b) breaching a restriction as to the user of land arising by virtue of a contract. (2) Subsection (1) applies to building or maintenance work where— (a) there is planning consent for the building or maintenance work, (b) the work is carried out on land that has at any time on or after [13 July 2016]— (i) become vested in or acquired by a specified authority, or (ii) been appropriated by a local authority for planning purposes as defined by section 246(1) of the Town and Country Planning Act 1990, (c) the authority could acquire the land compulsorily for the purposes of the building or maintenance work, and (d) the building or maintenance work is for purposes related to the purposes for which the land was vested, acquired or appropriated as mentioned in paragraph (b). (3) Subsection (1) also applies to building or maintenance work where— (a) there is planning consent for the building or maintenance work, (b) the work is carried out on other qualifying land,91 (c) the qualifying authority in relation to the land could acquire the land compulsorily for the purposes of the building or maintenance work, and (d) the building or maintenance work is for purposes related to the purposes for which the land was vested in, or acquired or appropriated by, the qualifying authority in relation to the land. (4) A person may use land in a case to which this subsection applies even if the use involves— (a) interfering with a relevant right or interest, or (b) breaching a restriction as to the user of land arising by virtue of a contract. (5) Subsection (4) applies to the use of land in a case where— (a) there is planning consent for that use of the land, 91

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As defined in s 205.

Extension of immunity of LAs to private individuals & bodies 10.71 (b) the land has at any time on or after [13 July 2016]— (i) become vested in or acquired by a specified authority, or (ii) been appropriated by a local authority for planning purposes as defined by section 246(1) of the Town and Country Planning Act 1990, (c) the authority could acquire the land compulsorily for the purposes of erecting or constructing any building, or carrying out any works, for that use, and (d) the use is for purposes related to the purposes for which the land was vested, acquired or appropriated as mentioned in paragraph (b). (6) Subsection (4) also applies to the use of land in a case where— (a) there is planning consent for that use of the land, (b) the land is other qualifying land, and (c) the qualifying authority in relation to the land could acquire the land compulsorily for the purposes of erecting or constructing any building, or carrying out any works, for that use, and (d) the use is for purposes related to the purposes for which the land was vested in, or acquired or appropriated by, the qualifying authority in relation to the land. (7) Land currently owned by a specified authority is to be treated for the purposes of subsection (2)(c) or (5)(c) as if it were not currently owned by the authority. (8) Land currently owned by a qualifying authority is to be treated for the purposes of subsection (3)(c) or (6)(c) as if it were not currently owned by the authority.’ 10.69 A restrictive covenant is within subsections (1) and (4) and can therefore be overridden by reason of it. This covers both the carrying out of work and the use of land (so including change of use where no works are carried out), but in either case compensation is payable under section 204 for the overriding of the restriction. It will be noted that section 203(1)–(3) apply specifically to work, and section 203(4)–(6) to use. 10.70 The purposes for which the land was ‘vested, acquired or appropriated’ for the purposes of sections 203(2)(d) and 204(5)(d) will include planning purposes (under sections 236 and 232 of the TCPA 1990). A significant feature of the section is that (like section 237 of the TCPA 1990 before it) it permits a breach of covenant (or interference with an easement or profit à prendre) either by the authority which acquires or appropriates the land for planning purposes or by a person deriving title under them who may, of course, be a private person or body. 10.71 The land is taken by successors in title free of the restrictions (so long as, and whilst, the use of the land is related to the planning purposes for which the body acquired, or retained, the land) and this is so even where the authority acquires the land in order to make a disposal back free of restrictions: see FordCamber v Deanminster Ltd92 (though if the purpose were simply financial gain 92

[2007] EWCA Civ 458. Relating to s 237 of the TCPA 1990, but which would apply equally to the replacement s 203 of the 2016 Act as there is no change which would be material to this.

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10.72  Restrictive covenants and public law to the authority that might be challengeable by judicial review as an improper purpose).93 This does not cease to apply once the original purpose for which the body acquired the land has been achieved, but is available to a council to authorise further works or use for which planning permission is duly granted: see R v City of London Council, ex p Master Governors and Commonality of the Mystery of the Barbers of London.94 10.72 Section 203 is wider than the former section 237 of the TCPA 1990, which it replaces,95 in that it covers not just local authorities but ‘specified authorities’, which include, for example, statutory undertakers. Section 205 of the 2016 Act defines a ‘specified authority’ (which has the benefit of section 204) as being: ‘(a) a Minister of the Crown or the Welsh Ministers or a government department, (b) a local authority as defined by section 7 of the Acquisition of Land Act 1981, (c) a body established by or under an Act, (d) a body established by or under an Act or Measure of the National Assembly for Wales, or (e) a statutory undertaker.’ 10.73

A ‘statutory undertaker’ is defined in section 205 as:

‘(a) a person who is, or who is deemed to be, a statutory undertaker for the purposes of any provision of Part 11 of the Town and Country Planning Act 1990, or (b) a person in relation to whom the electronic communications code is applied by a direction under section 106(3)(a) of the Communications Act 2003.’ 10.74

Section 204 provides for compensation to be payable as follows:

‘(1) A person is liable to pay compensation for any interference with a relevant right or interest or breach of a restriction that is authorised by section 203. (2) The compensation is to be calculated on the same basis as compensation payable under sections 7 and 10 of the Compulsory Purchase Act 1965. (3) Where a person other than a specified or qualifying authority is liable to pay compensation under this section but has not paid— (a) the liability is enforceable against the authority, but (b) the authority may recover from that person any amount it pays out. (4) The specified or qualifying authority against which a liability is enforceable by virtue of subsection (3)(a) is the specified or qualifying

93 See also Standard Commercial Properties Securities Limited v Glasgow City Council [2007] JPL 758, considering equivalent Scottish provisions (where the council sought to improve the area through compulsory purchase and transfer to a private developer who would restore it, making no profit itself on the transaction). 94 (1997) 73 P&CR 59. 95 Repealed by Sch 19, para 9 to the 2016 Act.

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Compensation for injurious affection etc 10.75 authority in which the land to which the compensation relates was vested, or by which the land was acquired or appropriated, as mentioned in section 203. (5) Any dispute about compensation payable under this section may be referred to and determined by the Upper Tribunal.’ As will be seen, compensation is payable in relation to any covenant overridden under section 203, and covers use in breach of a restrictive covenant as well as the carrying out of works.

COMPENSATION FOR INJURIOUS AFFECTION UNDER SECTION 68 OF THE LANDS CLAUSES CONSOLIDATION ACT 1845 OR SECTION 10 OF THE COMPULSORY PURCHASE ACT 1965 IN RESPECT OF NON-COMPLIANCE WITH RESTRICTIVE COVENANTS 1  The right to compensation – showing injurious affection 10.75 In order to show entitlement to compensation by reason of noncompliance96 with a restrictive covenant, it is clear that the claimant must show that, apart from the statutory protection, he would have been entitled to relief for breach of covenant. Accordingly, he must show that he is entitled to the benefit of the covenant, that the activities in question would, apart from the statutory protection, constitute a breach of its terms, and that the covenant is prima facie enforceable according to the ordinary rules of equity against the protected body or person. If he cannot show this then he could not claim to have suffered ‘injurious affection’ from such activities. Moreover, it would be open to the protected body or person to show that there would, apart from the statutory protection, have been a defence to an action for breach of covenant on any of the usual grounds.97 Because of the need to show injurious affection, there can be no claim unless and until quantifiable damage has actually occurred and, accordingly, a claimant cannot recover compensation in respect of an injury which is merely prospective.98 Actual non-compliance with the covenant is required and not merely a threatened or anticipated non-compliance (which, under the general law, might otherwise have entitled the claimant to an anticipatory injunction) since the mere threat of injury is not injurious affection but mere expectation of it.

96 Section 237(1)(b) refers to a ‘breach’ of covenant, but the sections of the 1845 and 1965 Acts which apply generally are silent on the matter and in view of the fact that ‘breach’ (unqualified by the word ‘permitted’) implies culpa and that the normal remedies for breach of covenant are not available, the expression ‘non-compliance’ (with whatever consequences prescribed by law) is, perhaps, preferable. 97 See Chapter 13. 98 See R v Paulter (1887) 20 QBD 132, where a lessee gave notice to terminate his tenancy in anticipation of an injurious affection to his right to light.

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10.76  Restrictive covenants and public law

2  The subject matter and measure of compensation (1)  The subject matter of compensation 10.76 Under the sections of the 1845 and 1965 Acts, compensation is payable only in respect of injurious affection to ‘any lands, or of any interest therein’, It would seem that it is the benefited land, rather than the covenant itself, which is the subject matter of the injurious affection since, as against a successor from the original covenantor, the covenant (like an easement) cannot exist in isolation apart from the benefited land. Further, this would appear to be equally so whether or not the benefit of the covenant is annexed to the land, since the fact that transmission with the benefited land of a covenant which is not annexed is dependent upon an express assignment would not seem to affect the question whether the benefited land (which in either case the covenant ‘touches and concerns’) is adversely affected by the non-observance of the covenant. The loss must relate to the works that would have given rise to an ability to bring an action but for the statutory authorisation of them, rather than to any more indirect effects. 10.77 In Moto Hospitality Ltd v Secretary of State for Transport,99 the claimant operated a motorway service area close to a motorway junction. Alterations were carried out to the junction by the highway authority, under various orders made under the Highways Act 1980, including a compulsory purchase order. The claimant claimed that the new arrangement substantially diminished the value of its site as a service station as a result of the reconfiguration of the junction by the works, with the result that the routes to its site were longer and less direct, and it sought compensation under section 10 of the 1965 Act. The Court of Appeal, allowing an appeal from the Lands Tribunal, held that any loss to the claimant in respect of the permanent junction alterations was too remote to form the proper subject of a claim for compensation under section 10 since it resulted from the rearrangement of the junction as a whole rather than from the execution of the very small part or parts of the works which would have given rise to an actionable wrong in the absence of statutory authorisation. Compensation for the effect of temporary closures during the works would be recoverable, however.

(2)  The measure of compensation 10.78 Once the claimant has shown that he has suffered injurious affection by being deprived of an otherwise immediate right to enforce a restrictive covenant, his sole entitlement is a monetary claim for compensation for injurious affection under the above-mentioned sections of the 1845 and 1965 Acts. Under the sections of the 1845 and 1965 Acts, compensation is confined to injury sustained by the benefited land, the measure of compensation being the difference between the market value of the interest in the land before the noncompliance and the market value after the non-compliance: see Wrotham Park Settled Estates v Hertsmere Borough Council.100 The Court of Appeal held

99 [2008] 1 WLR 2822. 100 [1993] 27 EG 124.

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Compensation for injurious affection etc 10.81 that there was no basis for the claim that compensation should be assessed by reference to the amount the claimant might reasonably be expected to be paid for allowing development to take place in breach of the covenant.101 10.79 Furthermore, damage other than to the value of the benefited land will not be recoverable. In Metropolitan Board of Works v McCarthy,102 Lord Chelmsford LC said: ‘It may be taken to have been finally decided that in order to found a claim to compensation under the Acts there must be an injury and damage to the house or land itself in which the person claiming compensation has an interest.  A mere personal obstruction or inconvenience, or a damage occasioned to a man’s trade or the goodwill of his business, although of such a nature that but for the Act of Parliament it might have been the subject of an action for damages, will not entitle the injured party to compensation under it.’103 10.80 In Argyle Motors (Birkenhead) Ltd v Birkenhead Corpn,104 the above principle was applied where compensation was claimed by a dealer in motor cars for loss of custom due to the carrying out of certain works and in the course of his speech (with which three of the other Law Lords agreed), Lord Wilberforce said:105 ‘I must, therefore, agree with both Courts below, that if the right to compensation in the present case depends on section 68, the appellants cannot succeed in obtaining compensation for business losses as such. I make it clear, as did the Court of Appeal, that if they can prove that a loss of profitability affects the value of their interest in the land, they can recover compensation for this loss of value.’ 10.81 The observations in the two last-cited cases were each made in the context of a claim for compensation for what, apart from statutory authority, would have given rise to an actionable nuisance. In the context of compensation payable for interference with a restrictive covenant, however, they emphasise the difference between compensation under the Acts and damages in substitution for an injunction. Under the Acts, the only compensation which could be claimed by the owners, lessees or occupiers of any benefited land in respect of noncompliance with a restrictive covenant which resulted in damage to a business carried-on on the benefited land would be the diminution, if any, in the market value of the freehold, leasehold or other interest of the claimant in such land which the activities on the burdened land produced. Permanent loss of trade might, of course, affect such value but this would have to be proved in each case by valuers’ evidence. What is quite clear is that a claim based on loss of profit or goodwill alone would not succeed (with one exception in relation to licensed premises, mentioned below) since such a loss, although it could be reflected in an award of damages in substitution for an injunction, does not, per se, represent damage to the claimant’s interest in the land benefited by the covenant. 101 For a review of the authorities establishing this proposition, see the Lands Tribunal decision on a preliminary point concerning the measure of compensation in Wrotham Park Settled Estates v Hertsmere Borough Council (1991) 62 P&CR 652. 102 (1874) LR 7 HL 243, at p 256. 103 See, also, Caledonian Rly Co v Walker’s Trustees (1882) 7 App Cas 259, per Lord Selborne LC at p 275 and Lord Blackburn at p 293. 104 [1974] 1 All ER 201, HL. 105 Ibid, at p 205b.

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10.82  Restrictive covenants and public law 10.82 For example, if land which is subject to a covenant against its use for the purpose of carrying any trade or business, is acquired or appropriated by a local authority for planning purposes and is developed as a shopping centre, this would override a restrictive covenant under section 203 of the Housing and Planning Act 2016, and compensation would be payable to those with the benefit of the covenant under section 10 of the Compulsory Purchase Act 1965 by reason of section 204 of the 2016 Act. The compensation claimable by an adjoining shop owner who has the benefit of the covenant would be confined to the diminution (if any) in the market value of his freehold (or leasehold) interest in the shop brought about by the development and its use. If loss of trade was suffered, then in so far as this adversely affected the market value of his interest in the land (a matter of valuers’ evidence), such loss could be claimed. But what is clear is that evidence to show a diminution in profits alone would not be relevant evidence since loss attributable thereto could not be claimed.106 10.83 From the cases, an exception to the above rule appears, however, to exist in the case of licensed premises, presumably because of the fact that the licence is in respect of the premises.107 Accordingly, loss of custom to a public house shown to be due to statutorily protected redevelopment or other activities, would fall within the scope of compensation (assuming, of course, that the public house in question was land to which the benefit of the restrictive covenant was attached).

Assumptions to be made in assessing the compensation 10.84 A question arises in relation to the measure of compensation whether, in assessing the impact on the benefited land of the non-compliance with the covenant, such land is to be taken in its existing state, or whether it is to be treated as having potential development value which would be less able to be realised by reason of the noncompliance. In relation to this question, Willes J said in the course of his judgment in Beckett v Midland Rly Co:108 ‘The damage complained of must be one which is sustained in respect of the ownership of the property—in respect of the property itself, and not in respect of any particular use to which it may be put from time to time; in other words, it must … be damage which would be sustained by any person who was the owner, to whatever use he might think proper to put the property. Now that of course is to be taken with the limitation that a person who owns a house is not to be expected to pull it down in order to use the land for agricultural purposes … The property is to be taken in status quo, and to be considered with reference to the use to which any owner might put it, in its then condition, that is as a house.’ 10.85 The effect of the above principles would seem to be that for the purpose of determining the financial effect of non-compliance on the claimant’s benefited land (or interest in land), the expert valuer should be instructed to assume that as a physical matter, the land could be put to the following uses, namely, first, all potential uses of which the land in its existing state of development

106 Argyle Motors (Birkenhead) Ltd v Birkenhead Corpn [1975] AC 99, HL. 107 See Re Kitchin (1880) 16 ChD 226, at p 233. 108 (1867) LR 3 CP 82.

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Compensation for injurious affection etc 10.86 (eg as a dwelling house, office block, department store, open land, etc) is inherently capable and, secondly, all potential uses for which the land is, or would shortly become, ripe for development or redevelopment. He should then further be instructed to assess the viability of any such potential uses, development or redevelopment as a legal matter, that is having regard to the existence of any legal restrictions affecting the land and to the likelihood or otherwise of any requisite planning permission being granted. The comparative valuations (ie on the alternative bases of the restrictive covenant affecting the burdened land being complied with on the one hand and of the protected non-compliance taking place on the other hand) would then be arrived at and the measure of compensation determined accordingly. 10.86 Set-off in respect of betterment. In arriving at the above-stated measure of compensation, the question arises whether, in assessing the amount by which the value of the benefited land is reduced by non-compliance with the terms of the covenant, any benefit accruing to the land by reason of the carrying out of the redevelopment or other permitted activities can be set off against any diminution in value which would, if taken in isolation, result from the noncompliance. The answer to this question would appear to vary according to which of three different backcloths obtains: (i) It is possible that the statute conferring the relevant powers may make express provision for setting off any betterment attributable to the carrying out of the relevant works against the direct loss of value occasioned by the exercise of the statutory powers. Thus, section 261(1)(a) of the Highways Act 1980 provides that in assessing the compensation payable in respect of the compulsory acquisition of land by a highway authority, the Upper Tribunal ‘shall have regard to the extent to which the remaining contiguous lands belonging to the same person may be benefited by the purpose for which the land is authorised to be acquired’.109 It is therefore necessary, in any particular case, to see whether there is any express provision of the enabling Act. (ii) If there is no such express provision, then if the carrying out of the works in question would, apart from the effect on the benefit of the restrictive covenant, result in an increase in the value of the benefited land in common with other properties in the neighbourhood which are not adversely affected (because they do not enjoy the benefit of the restrictive covenant) by the exercise of the statutory powers, then such increase cannot be taken into account in assessing the amount of compensation payable to the owner of the benefited land in respect of loss of the benefit of the restrictive covenant. This clearly emerges from the decision of the Court of Common Pleas in Eagle v Charing Cross Rly Co:110 In that case, injurious affection, consisting of interference with an easement of light, was sustained by a property as a result of the execution of railway works under statutory powers which, taken in isolation, would reduce the value of the property by £656 but the arbitrator (assessing compensation under section 68 of the Lands Clauses Consolidation Act 1845) held that this was offset by a corresponding increase in the

109 See the Lands Tribunal decision in Grosvenor Motor Co v Chester Corpn (1963) 14 P&CR 478 on the corresponding provision in the Highways Act 1959). 110 (1867) LR 2 CP 638.

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10.87  Restrictive covenants and public law value of the property attributable to the provision of the railway service and assessed compensation at nil. On appeal to the Court of Common Pleas (consisting of three judges) it was unanimously held that the increase in value had to be disregarded. The logic underlying this decision is plain, namely that if (as was the case) betterment could not be recovered against other owners who had sustained no countervailing loss, it ought not to be able to be indirectly recoverable against an owner who suffered a specific loss, by set-off against that loss. (iii) If the betterment were confined to the property, or all the properties, which were injuriously affected (to the exclusion of any other properties not so affected), whether there could then be set-off of betterment against detriment does not clearly appear from the last-cited or any other case. As a matter of principle, however, it would seem that set-off should be allowed. The logic underlying the decision in the Eagle case would have no application and there would accordingly be no obvious reason for disregarding any element of betterment in establishing the amount, if any, by which the market value of the benefited land had been diminished by reason of the development or activities in question. In a case where the betterment exceeds the detriment, an analogy might, perhaps, be drawn with ameliorating waste where, although there is a technical infringement of a legal right, there is generally no remedy either at law or in equity.111

(3)  The date of accrual of the right to claim compensation 10.87 It seems clear from the decision in R v Poulter112 that a claimant cannot recover compensation in respect of an anticipated injury only. Further, notwithstanding any compulsory acquisition of land, restrictive covenants are not discharged but continue to apply, and are simply overridden if and when the authority does something that would be in breach of them but for the fact it is the fulfilment of the statutory purpose for which the land was acquired, the land has been compulsorily acquired for the statutory purpose (or, in the case of section 203 of the Housing and Planning Act 2016 Act, work or use commences in breach of the covenant). It would seem to follow from this that only when a breach of the covenants occurs does a right to compensation arise.

(4)  The relevant date for assessing compensation 10.88 Once the right to claim compensation has accrued, the claimant is then entitled to claim compensation for the diminution in the market value of his interest in the benefited land which has been occasioned by the permitted non-compliance, including, in the case of a non-compliance of a continuing

111 See Doherty v Allman (1878) 3 App Cas 709; Meux v Cobley [1892] 2 Ch 253; Hyman v Rose [1912] AC 623. 112 (1887) 20 QBD 132. In that case, a lessee gave notice to terminate his tenancy in anticipation of an injurious affection to his right to light and his claim for compensation was dismissed as premature.

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Effect on the covenant of the protected non-compliance 10.92 nature, any diminution attributable to the future continuation of the noncompliance. Since hindsight is always better than prediction, the relevant date for assessing the extent of the loss (and thus the amount of the compensation) is the date when the claim actually falls to be adjudicated.

(5) The period of limitation applicable to a claim for compensation 10.89 The onus lies on the potential claimant to make a claim for compensation and unless such a claim is made within the relevant period of limitation the right to compensation will be lost. Since the only remedy which is available to a person entitled to the benefit of the restrictive covenant is a claim for compensation under the relevant statutory provision,113 it follows that the applicable period of limitation is that which applies to the recovery of statutory compensation and not that which applies to remedies for the enforcement of restrictive covenants as such. 10.90 Under section 8(1) of the Limitation Act 1980, an action for money recoverable by statute is an action upon a specialty for which the limitation period is 12 years. But this is subject to the provisions of section 8(2) of the Act which provides that ‘Subsection (1) above shall not affect any action for which a shorter period of limitation is prescribed by any other provision of this Act’, and Section 9(1) prescribes such a period by providing that ‘An action to recover any sum recoverable by virtue of any enactment shall not be brought after the expiration of six years from the date on which the cause of action accrued’. 10.91 The right to compensation is a right that can only be enforced by the claimant commencing proceedings in the Upper Tribunal114 for the quantification of the sum due. This is in effect an ‘action to recover’ a sum due by virtue of an enactment (even though the amount remains to be quantified), and it is therefore the section 9 limitation period of six years which applies: see Hillingdon London Borough Council v Arc Ltd (Court of Appeal).115 Accordingly, a claim must be made to the Upper Tribunal within six years of the right first accruing. It will otherwise become time barred.

EFFECT ON THE COVENANT OF THE PROTECTED NON-COMPLIANCE 10.92 If and when (but not before) the public body which has acquired land which is burdened by a restrictive covenant puts it to an authorised statutory use which is inconsistent with the terms of the covenant then, as has been seen, to that extent (but no further) the covenant is statutorily overriden so as to permit the institution and continuation of that use116 and to free the original covenantor

113 See Long Eaton Recreation Grounds Co v Midland Rly Co [1902] 2 KB 574. 114 Previously the Lands Tribunal. 115 [1999] Ch 139. 116 Above, para 10.41 et seq.

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10.93  Restrictive covenants and public law from personal liability.117 In relation to this, the only right of the person entitled to the benefit of the covenant is to claim compensation. The public body may implement the authorised statutory use either directly through its own officers or (if it otherwise has power to do so) indirectly by delegation to a private body.118 Given that a covenantee’s rights of enforcement are not discharged but cannot be enforced to defeat the statutory purpose, it seems to follow that if the land is no longer used pursuant to the statutory acquisition (or some replacement statutory purpose, to which the land may be appropriated), the covenant could in principle be enforced again. 10.93 However, once compensation has been paid, then enforcement would be unlikely to be permitted to the extent that the compensation has been assessed to compensate for the interference in question, at least where the enforcement is sought by someone who knew or could reasonably have been aware of the position. Accordingly, if, for example, compensation has been assessed and paid on the basis of permanent non-enforcement of the covenants, an injunction would seem unlikely to be granted to the payee or any successor (at least if he who knows of, or could reasonably be expected to discover, this), and in relation to damages the view could be taken that as the covenant could not be so enforced there would be nothing to be compensated for notwithstanding the breach, so that damages should be no more than nominal. 10.94 In practice, when compensation is paid to the person with the benefit of the restrictive covenant in relation to its non-enforceability, a sensible course is to agree the covenant will be discharged in its entirety, with compensation reflecting that fact. Were compensation to have been assessed on the basis of temporary interference (or, of course, were no compensation to have been claimed), there would, however, appear to be no such impediment to enforcement once the land is no longer used pursuant to the statutory acquisition (or pursuant to some replacement statutory purpose).

III: RELATIONSHIP BETWEEN RESTRICTIVE COVENANTS AND PLANNING PERMISSION VARIOUS RESTRICTIONS ON THE USE OF LAND 10.95 Restrictions on the use of land may be found to exist under any of four separate branches of law, namely: (1) the law of contract, of which licences and covenants which do not run with the land are important examples; (2) the law of tort, in particular the law of nuisance; (3) the law of property, of which restrictive covenants form a major example; and

117 Above, para 10.66. 118 Marten v Flight Refuelling Ltd (1962] Ch 115, and see para 10.67 above.

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Various restrictions on the use of land 10.98 (4) public law, including, in particular, public control of development under the Town and Country Planning Act 1990 and regulations operating thereunder.119 It is possible that all four of these branches of law may in any given case operate (in their different ways) to impose precisely the same restriction on the use of land. For example, a particular use of land may amount to a breach of contract, a breach of a restrictive covenant, the tort of nuisance and a contravening use under the Town and Country Planning Act 1990. 10.96 The remedies available under each branch of law are cumulative and none of them is subsumed by any of the others, although, of course, where a choice exists, the remedies available under one branch may be superior to those available under another.120 Similarly, the fact that a given use is expressly permitted under one branch of law, for example by planning permission having been granted for development,121 or planning permission being determined not to be required,122 cannot override restrictions on use which exist under covenant123 or under the protection of the law of nuisance.124 In particular, the grant of planning permission does not render a restrictive covenant unenforceable (although the existence of a planning permission is a matter which the Upper Tribunal will take into account in an application for the discharge or modification of a restrictive covenant125). 10.97 When considering a planning application, the planning authority is under a statutory duty to determine the application having regard to all material considerations relevant to the application and to make a decision in accordance with the provisions of the Town and Country Planning Act 1990. That decision must be made without regard to the existence of any restrictive covenant binding upon the application land and it makes no difference that the planning authority is itself the covenantee. Conversely, having decided in favour of development which is inconsistent with the covenant, the planning authority is not to be taken as having thereby made any waiver of it. 10.98 It follows that a local planning authority grants planning permission which is inconsistent with a restrictive covenant in its favour, does not

119 More specific powers of public control are also exercisable under many other statutes including the Public Health Act 1936, and various Acts relating to the supply of water, gas and electricity and numerous local Acts, including the Green Belt (London and Counties) Act 1938 and the London Building Acts 1931–1938. 120 See, eg Achilli v Tovell [1927] 2 Ch 243. 121 Re Jones’ and White & Co’s Application (1989) 58 P&CR 512 (Lands Tribunal). 122 R v Tunbridge Wells Borough Council, ex p Blue Boys Development Ltd (1989) 59 P&CR 315 (Popplewell J). 123 Re Martin’s Application (1988) 57 P&CR 119, CA. See also Wheeler v JJ Sannders Ltd [1995] 2 All ER 697 (planning decision permitting development does not authorise a nuisance). 124 Wheeler v JJ Saunders Ltd [1995] 2 All ER 697, CA. However, if and so far as changes of use made pursuant to planning permission change the character of the neighbouhood, this, in turn, may have a bearing on what constitutes a nuisance in the changed neighbourhood: see Gillingham Borough Council v Medway (Chatham) Dock Co Ltd [1993] QB 343. 125 See Chapters 19–22 and A R Mellows, ‘Planning and Restrictive Covenants’ 28 The Conveyancer and Property Lawyer (NS) (1964) 190–204.

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10.98  Restrictive covenants and public law preclude it from placing reliance on the covenant with a view to preventing the development.126 Although public law gives rise to its existence, a planning obligation under section 106 of the Town and Country Planning Act1990 (in its present form), is tantamount to a particular kind of land covenant, and will, as mentioned above, be dealt with in Chapter 32 below.

126 See para 21.15 below, and also para 22.17(5) and the cases there cited.

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11 The construction of restrictive covenants

GENERAL PRINCIPLES 11.1 Before turning to specific terms, the general approach to be adopted in construing covenants will be considered.

Is there a covenant? 11.2 As a preliminary matter, in order to determine whether there is a covenant at all, the question arises as to what forms of words will operate to create a covenant. Unlike early Roman Law,1 English law has never prescribed any special formula for the creation of a covenant, although the use of the verb ‘covenants’ on the part of the covenantor places the matter (subject to requirements as to execution) beyond doubt.2 11.3 Whether any given form of words creates a covenant is a question of construction in each case.3 In the Lands Tribunal case of Re Crest Homes plc’s Application,4 a transfer to a predecessor in title of the applicant executed in 1923 was expressed to be made ‘subject to the following restrictive conditions’ which were then set out but without any express words of covenant by the purchaser to comply with such conditions. It appears from the report that this was accepted on both sides as imposing effective covenants and the President of the Tribunal expressed himself as willing to proceed with the hearing on that basis.5

1 See Buckland and McNair, Roman Law and Common Law (1936), p 207. 2 In Monypenny v Monypenny (1861) 9 HL Cas 114, Lord St Leonards said: ‘The word covenant is not more powerful than the word agree’. 3 In Russell v Watts (1885) 10 App Cas 590, Lord Blackburn said: ‘I take it to be clear that any form of words which, when properly construed with the aid of all that is legitimately admissible to aid in the construction of a written document, indicate an agreement forms, when under seal, a covenant.’ In respect of deeds executed on or after 31 July 1990, a seal is no longer required. The current requirements for a deed are set out in section 1 of The Law of Property (Miscellaneous Provisions) Act 1989. See also Pordage v Cole (1669) 1 Wms Saund 319; Rigby v Great Western Ry Co (1845) 14 M&W 811. 4 (1983) 48 P&CR 309 (VG Wellings Esq QC). 5 But a conveyance or transfer or land expressed to be made ‘subject to’ pre-existing covenants will not be construed as amounting to a fresh covenant by the purchaser to observe those covenants: see the judgment of Lord Denning MR in Re Wickins’ Application (1962) 183 Estates Gazette 541, 543 cited by Stephenson LJ in Jones v Rhys-Jones (1974) 30 P&CR 451, 458–459. See also, Hollington Bros Ltd v Rhodes [1951] WN 437.

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11.4  The construction of restrictive covenants 11.4 However, whilst the above form of expression may be sufficient to impose a covenant enforceable between the parties it is prima facie not sufficient to show an intention to create any consequential equitable interest which alone will bind a successor from the covenantor. In Re Rutherford’s Conveyance6 Simonds J, in dealing with such a case, said: ‘On the first question the defendant contends that from the words of the habendum [to hold unto and to the use of the purchaser in fee simple, subject nevertheless to the restrictions and stipulations set out in the schedule hereto] I must imply some contractual obligation on the part of the grantee. He urges that, if the grant is to the grantee to hold, subject to the restrictions and stipulations contained in the schedule, and if he takes possession under that grant, it is as if he had agreed with the grantor to observe those restrictions and stipulations. He can, it is conceded, be under no liability at law, for he did not execute the deed, but so also, even though there were express covenants, he would not be liable at law if he did not execute the deed, yet in equity he would be bound by them: see Formby v Barker,7 at pp 547, 549, 555. For his main proposition, no relevant authority has been cited to me. It may well be that as between grantor and grantee in such a case the latter is bound in equity to observe the restrictions subject to which the former has granted the property to him. But it by no means follows that this equity can be stated in terms of contractual obligation so as to enable the grantor to assign the benefit of it to a successor in title. It is, in my judgment, at the most an equitable burden which cannot be forced into the legal category of covenant, just as the burden of a negative covenant, as expounded in London and South Western Ry Co v Gomm,8 is an equitable burden which may be considered as arising from an extension in equity of the doctrine in Spencer’s Case9 or of the doctrine of negative easements, but does not, as between the covenantee and a purchaser of the covenantor’s estate, rest on a contractual basis.’

Implied covenants 11.5 An implied covenant is one that is not expressed, but implied. Everything which follows from the true construction of a document is express notwithstanding that the resulting construction is not spelt out in terms by the words used.10 Certain well-recognised transactions affecting a property transaction may give rise to one or more implied covenants. Thus, implied covenants may arise where the necessary facts to establish a building scheme are present11 and such covenants will, subject to the relevant notice or registration requirements being satisfied,12 be binding on successors and derivative owners. In relation to implied terms in covenants, see para 11.22 et seq below. 6 7 8 9 10

[1938] Ch 396, at 404 (Simonds J). [1903] 2 Ch 539. (1882) 20 ChD 562. (1583) 5 Co Rep 16a. See the judgment of Rigby LJ in Re Cadogan and Hans Place Estate Ltd, ex p Willis (1895) 73 LT 387. Where a covenant exists, it is possible for the court to imply further terms into it:As to this, see below, para 11.22 et seq. 11 See Chapter 8. 12 As to what these requirements are, see Chapter 8, where the question whether building scheme obligations are based upon implied covenant or a ‘wider equity’ is also considered.

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General principles 11.9

Estoppel 11.6 The extent to which covenants may arise by the operation of the doctrine  of estoppel has yet to be explored by the courts, though the Privy Council did not rule out this possibility in Emile Elias & Co Ltd v Pine Groves Ltd,13 where it refused to allow the point to be raised because it had not been raised at trial and ‘it would have been necessary to consider the circumstances surrounding  the 1948 deed [which proceeded on the basis there were such covenants] in order to reach a conclusion whether an estoppel was well founded’.14 Estoppel may prevent a restrictive covenant being relied on: see, eg Blackburn v David Alston (Suffolk) Ltd15 (though the contention failed on the facts).

General approach to construction 11.7 The fundamental rule is that the meaning to be given to a covenant is to be ascertained from the words of covenant used. In Kemp v Bird,16 James LJ said: ‘Persons ought to look after their own interests in framing their own contracts and their own covenants. Persons who are men of business, as they were here, are able to get protection and advice, and they must make their covenants express, so as to state what they really mean, and they cannot get a court of law or of equity to supply something which they have not stipulated for in order to get a benefit which is supposed to have been intended.’ See further, paras 13.152–13.156 below. 11.8 In the absence of any claim for rectification, evidence of discussions or of draft documents which preceded the execution of the deed containing the covenant is inadmissible.17 However, the words used must be given the meaning which they had at the date when the covenant was entered into18 and in order to arrive at that meaning it is permissible to have regard to the meaning at that time of the words used and also to the circumstances which then existed.19 Further, in Rolls v Miller,20 Lindley LJ said: ‘Now the first question to be considered is what is the object of this covenant. The covenant must be construed consistently with that object, and on the other hand, something may fall within the scope of the covenant which does not fall within the words. One must look, therefore, at both the words and the object.’ 11.9 This statement was cited with approval by Lord Donaldson MR in C & G Homes Ltd v Secretary of State for Health,21 who added: ‘In other words,

13 (1993) 66 P&CR 1. 14 Ibid, see p 8. 15 [2001] All ER (D) 138 (Dec), [2001] WL 1676961, at para 35. 16 (1877) 5 ChD 974, 976, CA. 17 Re Endericks’ Conveyance (1972) 25 P&CR 254 (Goulding J). 18 Texaco Antilles Ltd v Kernochan [1973] 2 All ER 118 123f–h, PC. 19 See C & G Homes Ltd v Secretary of State for Health (1990) 62 P&CR 69, 79, CA. 20 (1884) 27 ChD 71, 87, CA. 21 Ibid, at 79–80.

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11.10  The construction of restrictive covenants if the covenant is to require or prevent a particular course of action, it must fall within both the object and words of the covenant’.22 In that case, a covenant was, in summary, in the following terms: ‘Not … to carry on or from the property or any part or the parts thereof any trade, business or manufacture whatsoever with the exception of the profession of a solicitor, doctor, dentist, private teacher, accountant, architect or other professional person … and not to use the said dwellinghouse, nor to use the said garage for any purpose or purposes other than those incidental to the enjoyment of a private dwellinghouse.’ Although used by patients lodged there, under the leadership of a nurse, under a ‘care in the community scheme’ run by the Secretary of State, may have constituted use as a private dwellinghouse under planning legislation, the court had regard not just to the words, but also to the object of the covenant. Lord Donaldson said, in relation to that object: ‘I think that it is plain. It is to ensure that the Charlcombe Park Estate is developed as a normal residential estate. To this end words have been used in covenant 24(2) which are apt to prevent the houses being used for professional or business purposes, other than in connection with specified professions which might fit in with a residential estate.’23 Accordingly, use of the houses in the way they were being used was incompatible with the use permitted under the covenant.24 11.10 In Spruce Enterprises Ltd v Palmer,25 the Lands Tribunal of Northern Ireland, referring to the first edition of this book and to Rolls v Miller and the C & G Homes cases, said ‘Both the strict words and the underlying object must be given careful consideration’ and held that a covenant in a 1911 conveyance prohibiting the construction of any building on the land other than a dwellinghouse with an annual Poor Law Valuation of less than £35 should be interpreted as in 2004 preventing anything other than a house with an equivalent ‘net annual value’ of £385 based on expert evidence, on the basis that the covenant was intended to preserve the amenity and character of the area and if the £35 figure was treated as a fixed one it would not subsequently have been of any effect in meeting that purpose, which could not have been the intention. 11.11 Broad principles for the interpretation of a contract or any other instrument were set out by the House of Lords in Investors Compensation Scheme Ltd v West Bromwich Building Society.26 In summary, the court is concerned to identify the intention of the parties by reference to what a reasonable person, having all the background knowledge which would have been available to the parties, would have understood them

22 See also Shropshire County Council v Edwards (1982) 46 P&CR 270, 279–280 (HH Judge Rubin sitting as a High Court judge). In this case, the judge refused to answer one of the questions of construction which arose on the ground that ‘the declaratory jurisdiction must be exercised with care and ought not to be exercised when the precise nature of the proposals is either not clear on the evidence or readily capable of modification’. 23 (1884) 27 ChD 71, 87, CA, at p 389B. 24 Ibid, p 390B. 25 [2004] WL 1640384. 26 [1998] 1 WLR 896, at pp 912–913.

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General principles 11.13 to be using the language in the contract to mean: per Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd.27 11.12 As set out by the Supreme Court in the most recent case of Arnold v Britton28 (which concerned a covenant relating to service charges in a 99-year lease), it does this by focusing on the meaning of the relevant words in their context, and assessing the meaning in the light of: (a) (b) (c) (d)

the natural and ordinary meaning of the clause in question; any other relevant provisions in the contract; the overall purpose; the facts and circumstances known or assumed by the parties at the time that the document was executed; and (e) commercial common sense; but (f) disregarding subjective evidence of any party’s intentions. 11.13

The Court made clear, however, that:

(1) the language of the provision which is to be construed should not be undervalued by resort to (commercial) common sense. The exercise of interpreting a provision involves identifying what the parties meant through the eyes of a reasonable reader, and, save perhaps in a very unusual case, that meaning is most obviously to be gleaned from the language of the provision, which the parties had control over; (2) when it comes to interpreting the centrally relevant words, the less clear they are, the more ready the court can properly be to depart from their natural meaning. However, that does not justify the court embarking on an exercise of searching for drafting infelicities in order to facilitate a departure from the natural meaning; (3) the mere fact that a contractual arrangement, if interpreted according to its natural language, has worked out badly, or even disastrously, for one of the parties is not a reason for departing from the natural language. It is only relevant to the extent of how matters would or could have been perceived by the parties, or by reasonable people in the position of the parties, as at the date that the contract was made.; (4) while commercial common sense is an important factor to take into account when interpreting a contract, a court should be slow to reject the natural meaning of a provision as correct simply because it appears to be a very imprudent term for one of the parties to have agreed, even ignoring the benefit of wisdom of hindsight. The purpose of interpretation is to identify what the parties have agreed, not what the court thinks that they should have agreed; (5) when interpreting a contractual provision, it is only permissible to take into  account facts or circumstances which existed at the time that the contract was made, and which were known or reasonably available to both parties.

27 [2009] AC 1101, at para 14. Based on the principles set out at pp 912–913 of the Investors Compensation Scheme Ltd case. 28 [2015] UKSC 36, [2015] AC 1619.

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11.14  The construction of restrictive covenants 11.14 The fact that the draftsman of the instrument has departed from, or has omitted part of, a well-established form of words also falls to be taken into account in construing the covenant, though (as in (1) above) that will not normally, on its own at least, be sufficient reason for not giving the words he has used the ordinary and natural meaning they would otherwise bear: see Oceanic Village Ltd v United Attractions Ltd.29 11.15 Similarly, the fact that the draftsman has said the same thing twice, and that reading one clause to mean the same as another would mean the first of them is superfluous, does not mean the draftsman did not intend that, where it is the natural meaning of both clauses. In Tea Trade Properties Ltd v CIN Properties Ltd,30 Hoffmann J said: ‘… I have never found the presumption against superfluous language particularly useful in the construction of leases. The draftsmen traditionally employ linguistic overkill and try to obliterate the conceptual target by using a number of words or phrases expressing more or less the same idea. I cannot therefore rely upon the language alone but must, as it seems to me, construe the words also by reference to the commercial effect which would be produced by one construction or the other.’ Although that observation was connected with leases, Neuberger LJ said in GLN (Copenhagen) Southern Ltd,31 that it applied equally to freehold restrictive covenants, referred to similar observations made by Hoffmann J in Norwich Union Life Insurance v British Railways Board,32 and said that ‘it is not unusual for conveyances to say the same thing twice’. 11.16 However, each case must depend on its own context and background facts, and the fact that construing a phrase in a particular way would mean an earlier provision was otiose, may lead to the conclusion that this is not the right interpretation: see, eg Royal Mail Estates v Pridebank Ltd.33 11.17 Where there is more than one possible construction, the court may have regard to which is consistent with commercial common sense in the circumstances that existed: see Rainy Sky SA v Kookmin Bank34 where Lord Clarke of Stone-cum-Ebony, giving the judgment of the Supreme Court, said as follows (at para 21): ‘It is not in my judgment necessary to conclude that, unless the most natural meaning of the words produces a result so extreme as to suggest that it was unintended, the court must give effect to that meaning. The language used by the parties will often have more than one potential meaning. I would accept the submission made on behalf of the appellants that the exercise of construction is essentially one unitary exercise in which the court must consider the language used and ascertain what a reasonable person, that is a  person who has all the background knowledge which would reasonably have  been available to the parties in the situation in which they were at the time of the contract, would have understood the parties to have meant.

29 30 31 32 33 34

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[2000] Ch 234, at p 241G. [1990] 1 EGLR 150, at 158A. [2004] EWCA Civ 1279, at para 30. [1987] 2 EGLR 137, at 138C. [2015] EWHC 1540 (Ch). See further, para 11.124 below. [2011] UKSC 50. A case involving the financing of a shipping transaction.

General principles 11.19 In doing so, the court must have regard to all the relevant surrounding circumstances. If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other.’ In relation to the use of ‘commercial common sense’, see further para 11.96 below. 11.18 Jones v Oven35 provides a recent example of the literal meaning of a term not being considered to be the true meaning of it because it would have negated the purpose for which the covenants were entered into. A piece of land had been sold to the defendants’ predecessors in title for the purposes of residential development. The vendors had entered into restrictive covenants restricting parts of their retained agricultural land, close to the land sold, from activities that would have been normal in such a setting. Part of the land conveyed included a strip of land which was to be transferred back to the vendors if a barn on the transferred land was ever demolished. The barn was demolished, and the strip was transferred back. On a literal reading of the conveyance, the land retained, which was subject to the  restrictive covenants, plainly did not include the strip of land being transferred  away at that time. However, it was held that the phrase ‘retained land’ was to be read as including the strip of land that was to be transferred back to the vendors if the barn was demolished. This was because otherwise covenants restraining activities on the vendors’ land intended to protect the residential development that was to be carried out following the transfer would have been pointless as they would not prevent such activities being carried out on the strip. If that was wrong, the court held a term to this effect should be implied in order to give business efficacy to the transaction. This provides an interesting illustration of the way in which a literal meaning may be defeated by the court looking at the purpose of the covenant, although on the facts, an implied term appears the more logical way of approaching the matter as it seems unlikely the parties intended the restraint be imposed on the vendors’ use of the strip during the time it was in the purchasers’ hands (which would be the case if it was intended to be within the definition of ‘retained land’ as such), and if asked at the time, they would have been likely to have said that if and when it was transferred back, the covenants were then obviously intended to apply to that strip too. 11.19 Given the principle that determining whether there has been an infringement of a covenant involves not merely considering the strict words of it, but the underlying object, or purpose of the covenant which the parties had in mind, a covenant not to carry on a particular trade may therefore be intended either to protect residential owners from the adverse consequences of that trade or be intended to protect a neighbouring trader from competition.36 It is a question of construction and inference from the words of covenant and the surrounding circumstances as at the date the covenant was entered into. As the cases referred to show, the outcome may be that on similar words a breach occurs in one case but not in another.

35 36

[2017] EWHC 1647 (Ch). As in Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd [1952] Ch 286.

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11.20  The construction of restrictive covenants

The contra proferentem rule 11.20 If, having attempted to construe the covenant according to the ordinary  principles of construction, no conclusion can be reached, the court may  as a matter of last resort turn to the contra proferentem rule, ie the rule that any identified ambiguity in construction should be resolved in terms of the meaning least favourable to the person who put the document forward for execution. However, this is very much a rule of last resort. 11.21 Thus, in Mira Oil Resources of Tortola v Bicimar NV37 Colman J said with reference to the case before him: ‘Further, this is not a case where the meaning of the words is so finely balanced that the contra proferentum (sic) rule should be applied in favour of the owners. If in the view of the Court one of two suggested meanings is significantly preferable to the other, as a matter of construction, it can safely be concluded that the former meaning reflects the mutual intention of the parties. See too St Edmundsbury and Ipswich Diocesan Board of Finance v Clark (No 2) [1975] 1 WLR 468, at 477, where the Court of Appeal made clear that the rule can only come into play “if the court finds itself unable on the material before it to reach a sure conclusion on the construction of the contract”, and that the rule “is not itself a factor to be taken into account in reaching the conclusion as to whether or not an ambiguity exists”.’ In AJ Building and Plastering Ltd v Turner38 the authorities were summarised (at para 52) by HH Judge Keyser QC, sitting as a High Court judge, in the following terms: ‘In Direct Travel Insurance v McGeown [2003] EWCA Civ 1606, [2004] 1 ALL ER (Comm) 609, Auld LJ said at [13]: “A court should be wary of starting its analysis by finding an ambiguity by  reference to the words in question looked at on their own. And it should not, in any event, on such a finding, move straight to the contra proferentem rule without first looking at the context and, where appropriate, permissible aids to identifying the purpose of the commercial document of which the words form part. Too early recourse to the contra proferentem rule runs the danger of ‘creating’ an ambiguity where there is none”.’ For a relatively recent case where the contra proferentem rule was applied by the Court of Appeal, see Spring House (Freehold) Ltd v Mount Cook Land Ltd [2001] EWCA Civ 1833 (at para 52).

Implied terms in covenants 11.22 The principles applicable to the implication of terms into commercial contracts appear in principle to apply equally to the implication of terms into a restrictive covenant: see Neuberger J at first instance in Crest Nicholson (South) Ltd v McAllister.39 37 38 39

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[1999] 2 Lloyd’s Rep 1011, at 104. [2013] EWHC 484. [2002] EWHC 2443 (Ch).

General principles 11.25 Though the decision in the case was overturned on other grounds, this part of the judgment was not criticised (and was approved obiter in general terms by the Court of Appeal40). 11.23 Neuberger J, as he then was, referred to the five requirements identified by Lord Simon of Glaisdale in BP Refinery (Westernport) Pty Ltd v The President, Councillors and Ratepayers of Shire of Hastings41 which must be satisfied by a term before it will be implied: (1) it must be reasonable and equitable; (2) it must be necessary to give efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that it ‘goes without saying’; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.42 11.24 This list was subsequently described by the Privy Council in AttorneyGeneral of Belize v Belize Telecom Ltd43 as: ‘best regarded, not as a series of independent tests which must each be surmounted, but rather as a collection of different ways in which judges have tried to express the central idea that the proposed implied term must spell out what the contract actually means, or in which they have explained why they did not think that it did so.’ Nonetheless, it represents a reasonable guide (and for further discussion of some of the items in it, see paras 21–25 and 27 of the Belize case). If the items in the list are not satisfied, a term is unlikely to be implied. 11.25 In Phillips Electronique Grand Public SA v British Sky Broadcasting Ltd,44 as quoted by Neuberger J in Crest Nicholson,45 Sir Thomas Bingham MR went on to say:46 ‘Given the rules which restrict evidence of the parties’ intention when negotiating a contract, it may well be doubtful whether [an] omission was the result of the parties’ oversight or of their deliberate decision, if the parties appreciate that they are unlikely to agree on what is to happen in a certain not impossible eventuality, they may well choose to leave the matter uncovered in their contract in the hope that the eventuality will not occur. The question of whether a term should be implied, and if so what, almost inevitably arises after crisis has been reached in the performance of the contract. So the court comes to the task of implication with the benefit of hindsight, and it is tempting for the court then to fashion a term which will reflect the merits of the situation as they then appear. Tempting, but wrong.’

40 At [2004] 1 WLR 2409, para 53. 41 (1978) 52 ALJR 20 at 26 – as quoted by Sir Thomas Bingham MR in Phillips Electronique Grand Public SA v British Sky Broadcasting Ltd [1995] EMLR 472. 42 As Lord Neuberger PSC, as he had by then become, emphasised in Arnold v Britton [2015] AC1619, at para 56: ‘it is a fundamental principle that one cannot imply a term which is inconsistent with an express term’. 43 [2009] 1 WLR1988. 44 [1995] EMLR 472. 45 [2002] EWHC 2443 (Ch), at para 49. 46 [1995] EMLR 472, at p 482.

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11.26  The construction of restrictive covenants 11.26 Neuberger J added47 that when considering the law relating to implied terms, it is also necessary to: ‘… bear in mind the guidance given by Lord Wilberforce in Liverpool City Council v Irwin [1977] AC 239 at 253E to 254A. In that passage, he started by giving various examples of different types of case where the court may imply a term, and ended by referring to the facts of that case as representing “a  fourth shade on a continuous spectrum”. There are undoubtedly certain well-established principles which will apply to any implied term, such as those enunciated by Lord Simon and quoted by Sir Thomas Bingham. However, as Lord Wilberforce’s analysis indicates, the principles must be applied by reference to the facts of a particular case. Thus, the five covenants in the instant case are all fairly shortly expressed, so that it is perhaps rather easier to imply a term than it would be in the case of a “lengthy and carefully drafted contract” which showed “every sign of careful professional drafting” (as in Phillips Electronique − see at 482), or of a lease containing “a number of careful and elaborate provisions” (as in Duke of Westminster v Guild [1985] QB 688 at 699H).’ It may not always be easy48 to say whether the claimant’s interpretation involves simply construing the second covenant in its context or implying a term into the covenant.

Rectification 11.27 The court can rectify an agreement contained in a document, including a deed, for the purpose of correcting a mistake by the parties in expressing their true agreement. This can be on the basis of: (i) common mistake in that the agreement was written  down wrongly, not in accordance with the agreement reached;49 or (ii) unilateral mistake, where one party mistakenly believes the document is in accordance with an agreement reached and the other party knows of the mistake but does not draw that to the attention of him and it would be inequitable to allow that party to benefit from the mistake or to allow the mistaken party to suffer detriment as a result.50 11.28 The usual rules of rectification will apply, as between the original parties, as much to rectification of the terms of a restrictive covenant as to anything else. However, the ability to seek rectification is a ‘mere equity’ and does not amount to an interest in the land. As such, it will not be available against a bona fide purchaser of the land who is unaware of it, and entitled therefore to rely on the written terms: see Smith v Jones.51

47 48

At para 52. As Neuberger J did not find it in Crest Nicholson – see paras 52 and 54. See also Jones v Oven [2017] EWHC 1647 (Ch) 1647, at paras 69–70 (and above). 49 See Swainland Builders v Freehold Properties [2002] EWCA Civ 560, where the requirements were set out by Peter Gibson LJ, at paras 33–34. 50 See Thomas Bates & Son v Wyndhams Ltd [1981] 1 WLR 505. 51 [1954] 1 WLR 1089. And see also Sahota and Others v RR Leisureways (UK) Ltd [2010] EWHC 3114 (at para 77) where it was relatively recently applied.

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Specific areas of construction 11.33

SPECIFIC AREAS OF CONSTRUCTION 11.29 In relation to any given covenant, there are five particular matters which call for more particular consideration as a matter of construction, namely: (1) whether the terms of the covenant are sufficiently certain to be enforceable; (2) as to the persons, apart from the original covenantee and covenantor, who are potentially within the scope of the benefit and burden of the covenant; (3) whether the original covenantor is personally liable for the acts or omissions of others (within the scope of the burden of the covenant) after he has ceased to be the occupier of the burdened land; (4) whether the present owner or occupier of the burdened land is liable by reason of the acts or omissions of an earlier owner or occupier; (5) whether references in the body of the covenant to the covenantee or the covenantor include references to other persons who are within the scope of the benefit and burden of the covenant. 11.30 The questions of construction which arise under (1), (2) and (3) go to the root of liability. Judicial decisions thereon involve matters of principle of general application; and the same largely applies to questions arising under (4) and (5). It is therefore proposed to deal with these matters in the context of restrictive covenants generally and then to deal in an alphabetical sequence with the meaning of some of the more commonly encountered restrictions.

1  Content and certainty of terms 11.31 Unlike the law of easements, and despite the analogy which has been drawn between restrictive covenants and equitable easements,52 the law of covenants does not in general impose any pre-determined limits on the matters which may be the subject of restrictions.53 Thus, although there cannot be an easement consisting of a right to a view,54 a covenant not to obstruct a view will be enforced.55 11.32 However, if the terms of a covenant are too vague to enable the court to determine what acts will constitute an infringement, the covenant will be void. Thus, in Murray v Dunn56 an agreement not to erect any building of ‘an unseemly  description’ was held by the House of Lords to be too vague and indefinite to be capable of being enforced as a permanent restraint upon the use of land. 11.33 In National Trust for Places of Historic Interest or Natural Beauty v Midlands Electricity Board,57 restrictive covenants in favour of the National 52 See above, para 1.7–1.8. 53 Subject to the statutory and other provisions relating to restrictions on competition: see Chapter 12. 54 ‘The law don’t give an action for such things of delight’ per Wray CJ in William Aldred’s Case (1610) 9 Co Rep 57b, at 58b; Foli v Devonshire Club (1887) 3 TLR 706; Campbell v Paddington Corpn [1911] 1 KB 869. 55 Piggott v Stratton (1859) 1 De GF & J 33; Western v Macdermott (1866) 2 Ch App 72; Crawley v Wolff (1888) 4 TLR 434, CA; Wakeham v Wood (1981) 43 P&CR 40, CA. 56 [1907] AC 283. 57 [1952] Ch 380.

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11.34  The construction of restrictive covenants Trust and expressed to be for the benefit of Midsummer Hill and for the purpose of preserving the amenities of the Malvern Hills included a restriction that ‘No act or thing shall be done or placed or permitted to remain upon the land which shall injure prejudice affect or destroy the natural aspect and condition of the land’. The defendant electricity board had erected or begun to erect on land which was some 1,100 yards from Midsummer Hill wooden poles in pairs connected by cross-struts, about 42 feet in height, for the purpose of carrying overhead power lines. Vaisey J held that the covenant was void for uncertainty, observing:58 ‘It would be difficult to find wider, vaguer and more indeterminate words than those. “Affect” following the word “prejudice” cannot, I think, mean “prejudicially affect” and must, therefore, mean “affect whether prejudicially or otherwise, “that is to say, change or alter. Who is to say and what is to be the criterion of such an alteration of the natural aspect and condition of the land? There is no such qualification as might have been introduced by such words as “in the opinion of the National Trust” after the words “which shall, “a qualification which would appear to have been accepted as sufficient in Marquess of Zetland v Driver59 …’ 11.34 More recently, in Adams v Rushmon Ltd,60 Blackburne J found a deed imposing restrictive covenants to lack certainty because it was not clear what the ‘said land’ intended to be burdened was, and what the extent of that burden was. 11.35 If certain words only of a composite covenant are uncertain, but they purport to qualify another part, even though in relation to that part, standing alone, there is no uncertainty, the whole covenant appears likely thereby to be rendered void. For example, a covenant ‘not to use the land except for the purpose of erecting a block of 14 elderly persons flats’ would appear likely to be regarded as void in its entirety if the words ‘elderly persons’ are too vague to be enforced. In Marquess of Zetland v Driver61 the covenant was that ‘no act or thing shall be done or permitted on the said land which in the opinion of the vendor may be a public or private nuisance or prejudicial or detrimental to the vendor and the owners or occupiers of any adjoining property or to the neighbourhood’. The vendor (as defined in the conveyance containing the covenant) formed the opinion that the carrying on of a fish and chip shop business on the burdened land was detrimental to the amenities of the neighbourhood and to his own property. No attack was made either before Bennett J or the Court of Appeal on the validity of the covenant (which was assumed to be valid and was, in the Court of Appeal, ordered to be enforced) but in the Court of Appeal62 the claimants argued that in forming his opinion, the vendor was exercising a quasi-judicial function and was therefore bound to give the defendants the opportunity of being heard before coming to any conclusion. This argument was rejected, the Court of Appeal holding that an opinion was effectively formed

58 59 60 61 62

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Ibid, at p 384. [1939] Ch 1. See also, Hampstead and Suburban Properties Ltd v Diomedous [1969] 1 Ch 248. (2000) WL 542133. [1939] Ch 1. In the report of the proceedings before Bennett J, the question was argued but did not arise for decision.

Specific areas of construction 11.38 if it was made bona fide after a proper consideration of the facts. Farwell J, in delivering the judgment of the Court of Appeal, said: ‘In forming his opinion, the appellant was in no sense exercising a judicial or quasi-judicial function, and he was therefore under no obligation to give the respondents an opportunity of being heard. The club cases, such as Labouchere v Earl Wharncliffe63 and Dawkins v Antrobus,64 have no application to this case.’65 11.36 It should be added, however, that where a covenant provides for any dispute as to whether there has been a breach to be referred to arbitration, this will not overcome conceptual uncertainty since an arbitrator is required to decide according to the ordinary rules of law and, moreover, in doing so, is exercising a judicial function. Apart from resolving conceptual uncertainty by the device of introducing the criterion of the opinion of a specified person, where potentially uncertain concepts are found to be embodied in the language of statutory provisions, it may be possible on occasion to avoid uncertainty by ‘borrowing’ that language.66 11.37 There is the possibility in an appropriate case of implying a term in order to overcome any lacunae in the wording (as to which, see above), though this is not something the court will do lightly.

2 The persons potentially67 within the scope of the benefit and burden of a covenant (i)  The persons within the scope of the benefit Common law 11.38 At common law,68 strict words of limitation were required to be inserted  in a conveyance of land in order to pass to the grantee a freehold estate of longer duration than the life of the grantee.69 But a much more liberal approach was adopted, even at common law, in relation to the ambit the benefit of a covenant which touched and concerned land belonging to the covenantee, and provided the covenant, construed as a whole, showed an intention that the benefit should enure in favour of persons claiming through or under the covenantee, then that would be sufficient to bring them within the potential

63 (1879) 13 ChD 346. 64 (1881) 17 ChD 615. 65 See also, Pearce v Maryon-Wilson [1935] Ch 188. 66 See Fawcett Properties Ltd v Buckingham County Council [1961] AC 636 and Re Edwards’s Application (1960) 11 P&CR 403, CA. 67 The present section is, of course, concerned solely with what is legally possible. Assuming that a given person is, as a matter of construction, potentially within the scope of the benefit or burden of a covenant, then whether in any particular case such a person will in fact take the benefit or (as the case may be) be bound, will depend upon whether the rules for the passing of the benefit or burden discussed in Chapters 5 to 9 are satisfied. 68 And prior to the relaxations introduced by s 51 of the Conveyancing Act 1881 and s 60(1) and (2) of the Law of Property Act 1925. 69 See Re Ethel and Mitchells and Butlers’ Contract [1901] 1 Ch 945.

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11.39  The construction of restrictive covenants scope of the benefit of the covenant.70 Indeed, it would seem that once it is established that the covenant touches and concerns the land of the covenantee, then a rebuttable presumption arises that all those who thereafter derive a title to the benefited land through or under the covenantee will be capable of taking the benefit of the covenant. 11.39 Thus, in Westhoughton UDC v Wigan Coal and Iron Co Ltd,71 the owners of a mine covenanted with the freehold owners of the surface ‘and their assigns’ not to let down the surface. Whilst the actual decision went upon other grounds, the judgments contain references to the problem of a lessee of the surface enforcing the covenant. Swinfen Eady MR said:72 ‘In cases, however, not arising between landlord and tenant I am of opinion that a lessee (who is not an express assignee of the benefit of the covenant) is not an ‘assign’ of an owner in fee for the purpose of obtaining damages for breach of a covenant entered into with such owner in fee, his heirs and assigns.’ It seems clear that these observations were made in the context of whether the benefit of the covenant would automatically run in favour of a lessee and it seems equally clear (from the words in brackets) that there was nothing to prevent the freeholder from expressly assigning the benefit to a lessee.73 Moreover, Duke LJ was more inclined to include a lessee in the automatic benefit of the covenant but he found it unnecessary to express a concluded opinion. 11.40 The presumption referred to above may, however, be rebutted by an indication of a contrary intention.

Section 58 of the Conveyancing Act 1881 11.41 In the case of covenants entered into between 1881 and 1926, section 58 provides as follows: ‘(1) A covenant relating to land of inheritance, or devolving on the heir as special occupant,74 shall be deemed to be made with the covenantee, his heirs and assigns, and shall have effect as if heirs and assigns were expressed. (2) A covenant relating to land not of inheritance, or not devolving on the heir as special occupant, shall be deemed to be made with the covenantee, his executors, administrators, and assigns, and shall have effect as if executors, administrators, and assigns were expressed.’ 70 See Pakenham’s Case (1368) YB 42 Edw 3, fo 3, pl 14; Co Lit 385a(x); Lougher v Williams (1672) 2 Lev 92. Whether they in fact took the benefit would depend upon whether the rules for the passing of the benefit of the covenant were thereafter satisfied (as to which see, for restrictive covenants, Chapters 5 to 8, above, and, for positive covenants, Chapter 27 below). 71 [1919] 1 Ch 159, CA. 72 Ibid, at p 171. 73 This is consistent with the view expressed by Fry J in Taite v Gosling (1879) 11 ChD 273, that the word ‘assign’ in the expression ‘heirs and assigns’ is not confined to a person taking by an assignment which exhausts the whole interest. See, also, Ricketts v Enfield (Churchwardens) [1909] 1 Ch 544, at p 555 where it was held that a person holding under a conditional agreement for a lease was an assign of the lessors. These cases were applying common law rules but ‘there can be no difference between law and equity in construing such covenants with a view to seeing whether they do or do not run with the land. The same words in the same document must necessarily bear the same meaning in all the Courts’, per Farwell J in Rogers v Hosegood [1900] 2 Ch 388, at p 397; affd ibid, 399. 74 le, where a tenant pur autre vie died during the lifetime of the ‘autre vie’.

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Specific areas of construction 11.44 11.42 These provisions still do not, in terms, indicate whether a person having a lesser interest in the land than the original covenantee is within the potential scope of the covenant but the observations cited above75 in Westhoughton UDC v Wigan Coal and Iron Co Ltd would prima facie be equally applicable thereto.76

Section 78(1) of the Law of Property Act 1925 11.43 In the case of covenants entered into after 1925, however, the words which are imported into covenants relating to any land of the covenantee are much more explicit and comprehensive. The subsection provides as follows: ‘(1) A covenant relating to any land of the covenantee shall be deemed to be made with the covenantee and his successors in title and the persons deriving title under him or them, and shall have effect as if such successors and other persons were expressed. For the purposes of this subsection in connexion with covenants restrictive of the user of land “successors in title” shall be deemed to include the owners and occupiers for the time being of the land of the covenantee intended to be benefited.’ The reference in the subsection to ‘persons deriving title under him or them’, clearly extends the scope of a covenant to lessees and others having a derivative interest, whilst the inclusion, in the case of restrictive covenants, of ‘owners and occupiers for the time being’ of the benefited land would appear to extend the scope of a restrictive covenant to owners who have acquired, or are in the course of acquiring, a title by adverse possession77 and to mere licensees who are in actual occupation. 11.44 Moreover, on the basis of the decision of the Court of Appeal in Federated Homes Ltd v Mill Lodge Properties Ltd,78 all such persons will automatically become entitled to the benefit of the covenant as soon as they came into existence.79 In the case of post-1925 restrictive covenants, therefore, it is true to say that they ‘run with the land’—meaning land in the physical sense—in the same way as equitable easements attach to the land and enure for the benefit of all owners and occupiers for the time being thereof.

75 At para 11.39. 76 It is now clear, however, from the decision of Morritt J in J Sainsbury plc v Enfield London Borough Council [1989] 1 WLR 590, that even a successor in title of the whole estate of the covenantee will not, by virtue of the form of words invoked by s 58(1), automatically get the benefit of the covenant with the transfer of that estate, since those words are not sufficient to show an intention to annex the benefit of the covenant to the land. See further as to this aspect, above, para 6.25 et seq. 77 Notwithstanding that they are strictly neither successors in title nor persons who derive title under the covenantee: see per Lord Radcliffe in Fairweather v St Marylebone Property Co Ltd [1963] AC 510, at p 535. 78 [1980] 1 WLR 594, considered at length above, para 6.31 et seq. 79 Provided, at least, that the benefited land was identifiable from the contents of the instrument creating the covenant. As to whether the position is the same if the benefited land is not so identifiable, see above, para 6.7 et seq.

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11.45  The construction of restrictive covenants

(ii)  Persons within the scope of the burden 11.45 The rules dealing with the scope of the burden of a restrictive covenant have been developed exclusively by reference to principles of equity since the common law has never recognised the possibility of the burden of any covenant, positive or restrictive, running with the land.

Pre-1926 covenants 11.46 In the case of covenants entered into before 1926,80 for the burden to run with the land it is necessary to show (from the instrument creating the covenant) an intention on the part of the covenantor that it should do so, but no particular form of words (such that the covenant was made by the covenantor ‘and his assigns’) is required. Nevertheless, the most common method adopted for showing the requisite intention was for the covenantor to covenant for himself his heirs and his assigns. 11.47 The reference to ‘assigns’ has been held sufficient to show an intention to bind not only the covenantor’s successors in title in the strict sense but also lessees81 and underlessees.82 Whether, in such a case, an adverse possessor would be bound is not clear,83 but if the covenant provides impersonally that a thing shall not be done on the land then the burden extends to all subsequent owners and occupiers whether or not they claim through or under the covenantee84 and whether or not any reference was made in the words of covenant to ‘assigns’.85 In such a case, the burden of the covenant ‘runs with the land’ to the same extent as the burden of an equitable easement.86

Post-1925 covenants 11.48 In the case of these covenants, section 79 of the Law of Property Act 1925 provides as follows: ‘(1) A covenant relating to any land of a covenantor or capable of being bound by him, shall, unless a contrary intention is expressed, be deemed to

80

There was no provision in the Conveyancing Act 1881, or any other pre-1926 Act, doing for the burden what s 58 did for the benefit of a covenant. 81 Nicoll v Fenning (1881) 19 ChD 258; London, Chatham and Dover Rly Co v Bull (1882) 47 LT 413; John Bros Abergarw Brewery Co v Holmes [1900] 1 Ch 188; Holloway Bros Ltd v Hill [1902] 2 Ch 612. 82 Thornewell v Johnson (1881) 50 LJ Ch 641; and see Hall v Ewin (1887) 37 ChD 74. 83 There is no authority turning on the point in the case of a covenant so framed, but since the scope of the persons who may be bound by a covenant is primarily a matter of construction (see Muller v Trafford [1901] 1 Ch 54), and even though (as indicated above) a wide meaning has been given to ‘assigns’, it is difficult to see how an adverse possessor could, on a strict interpretation of the words used, qualify as an ‘assign’: see Limitation Act 1980, s 17 and Tichborne v Weir (1892) 67 LT 735. 84 Mander v Falcke [1891] 2 Ch 554. 85 Wilson v Hart (1866) 1 Ch App 463; Mander v Falcke [1891] 2 Ch 554; Re Nisbet and Potts’ Contract [1906] 1 Ch 386. 86 See Re Nisbet and Potts’ Contract [1906] 1 Ch 386, at pp 400–404 where Collins MR adopted the views of Jessel MR in London and South Western Rly Co v Gomm (1882) 20 ChD 562).

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Specific areas of construction 11.52 be made by the covenantor on behalf of himself his successors in title and the persons deriving title under him or them, and, subject as aforesaid, shall have effect as if such successors and other persons were expressed. This subsection extends to a covenant to do some act relating to the land, notwithstanding that the subject-matter may not be in existence when the covenant is made. (2) For the purposes of this section in connexion with covenants restrictive of the user of land “successors in title” shall be deemed to include the owners and occupiers for the time being of such land.’ 11.49 Accordingly, as in the case of the benefit under section 78, all owners and occupiers for the time being of the burdened land are within the scope of the covenant’s burden, including adverse possessors and occupiers who do not claim through or under the covenantor. The result is that, unless a contrary intention is expressed, the burden of all post-1925 restrictive covenants will run with the land to the same extent as the burden of equitable easements. 11.50 However, unlike section 78(1) of the Law of Property Act 1925 (relating to the benefit of covenants),87 section 79 does not have any enlarging effect on the running of the burden of positive covenants (see para 28.9–28.12 below). 11.51 In Morrells of Oxford Ltd v Oxford United Football Club Ltd,88 the Court of Appeal made clear89 that section 79 merely extends the number of persons (to owners and occupiers for the time being of the land) whose acts and omissions are within the reach of the covenant in the sense of making equitable remedies available against them ‘provided that the other conditions for equity’s intervention are satisfied’ (para 35). Key conditions are, of course, that the covenant is restrictive in nature and that the claimant retains land capable of being benefited (see para 39, read together with para 34). In other words, ‘Section 79 is concerned with simplifying conveyancing by creating a rebuttable presumption that covenants relating to land of the covenantor are intended to be made on behalf of successors in title, rather than be intended as purely personal’ (para 40). Accordingly, the covenant will be able to be enforced by injunction against each of the successors in title where they are in breach of it in circumstances where the covenant is a restrictive one which is otherwise enforceable (para 30). 11.52 Section 79 does not apply, however, if the contrary intention is expressed (subsection (1)). Such an intention may be sufficiently indicated by the wording and context of the instrument even though the instrument contains no provision expressly excluding successors in title from its operation. If, on its natural construction, the covenant is clearly intended to be merely personal, that is sufficient to have that effect even though not expressly provided: see Re Royal Victoria Pavilion, Ramsgate.90

87 Following the decision of the Court of Appeal in Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500, in relation to which, see para 3.4 above. 88 [2001] Ch 459. 89 Albeit that they described it as a tentative view, the point not actually being necessary to the determination of the appeal (see para 29). 90 [1961] Ch 581, at p 589.

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11.53  The construction of restrictive covenants In that case, the contrast between the wording of three consecutive clauses, the limited duration of the obligation (corresponding to the unexpired portion of lease of the pavilion) and the character of the obligation showed it was intended to be a purely personal one. 11.53 In the more recent Morrells case (above), the contrast between the wording of the covenants in clause 2 of the instrument (which expressly covered successors in title of the purchaser) and clause 3 (which merely referred to ‘the vendors’ covenanting), which were in two short successive clauses of the conveyance, was considered sufficient, in itself, to show clause 3 was intended not to cover successors in title, which contrary intention displaced the presumption that would otherwise have applied under section 79).91

3 The liability of the original covenantor for the acts of subsequent owners and occupiers 11.54 Where a subsequent owner or occupier who (as a matter of construction of the words of covenant) is within the scope of the covenant commits a breach, the original covenantor will only be liable if the breach so committed also amounts (according to the terms of the covenant) to a breach on the part of the original covenantor. In deciding whether there is a breach on the part of the original covenantor, the question is whether the covenantor, in addition to undertaking for himself, also undertook that his assigns and others within the scope of the covenant would not do the prohibited act. This is a question of construction. 11.55 In Powell v Hemsley, the facts were as follows:92 Hemsley, in 1904, took a conveyance of land and covenanted ‘for himself his executors administrators and assigns’ that he would erect no buildings on the land without first submitting plans for the approval of the covenantee, his heirs and assigns. In 1906, Hemsley granted a lease of the land to two lessees for a term of 250 years subject to the covenant. In the same year, the lessees erected the carcase of a dwellinghouse without first submitting plans thus committing a breach of the covenant (the lessee being treated as an ‘assign’ of Hemsley for this purpose93 and thus within the scope of the burden of the covenant). In 1907, before the dwellinghouse had been completed, the lessees went bankrupt and the trustee in bankruptcy having disclaimed the lease, Hemsley resumed possession. Later in 1907, the plaintiff, Powell, purchased the benefited land and took an express assignment of the benefit of the covenant and he now sought a mandatory injunction against Hemsley for the removal of the building. At first instance the question was whether Hemsley was in breach of the covenant.

91

92 93

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See para 28 of the judgment of Robert Walker LJ: ‘the contrast between clause 2 and clause 3 of the 1962 conveyance is too stark and too immediate to be ignored. To read into clause 3 words which are not there, but which are in clause 2, would in my view be inconsistent with the purport of the instrument’ (Robert Walker LJ, for the court). See, similarly, Roadside Group Ltd v Zara Commercial Ltd [2010] EWHC 1950 (Ch). [1909] 1 Ch 680 (Eve J); affd [1909] 2 Ch 252, CA. As to which, see above, para 11.39.

Specific areas of construction 11.59 11.56

In holding that he was not and dismissing the claim, Eve J said:94

‘The form of covenant is a covenant by the purchaser for himself his executors administrators and assigns that he will or will not do the particular act. Is such a covenant—as the plaintiff argues it is—equivalent to a covenant by the purchaser for himself his executors administrators and assigns that he his executors administrators and assigns will or will not do the particular act? I do not think it is. I have not been able to find any authority upon the point, but in my view the words are used in the first part of the covenant to indicate the intention that the covenants shall run with the land, and not to impose on the covenantor liability for the acts of his assigns.’ 11.57 On appeal, the Court of Appeal affirmed the decision on the ground that  the breach by the lessee was a once-and-for-all breach which had taken place  before Powell had become entitled to the benefit of the covenant and since there had been no assignment to him of the right to sue in respect of past breaches,95 Powell had no locus standi to sue. In so deciding, Cozens Hardy MR and Farwell LJ (Kennedy LJ agreeing) were content to assume, without deciding, that the covenant should be construed as a covenant by Hemsley warranting that ‘his assigns’ would not erect a building without submitting plans and that Hemsley was accordingly in breach—but because of the locus standi point, Hemsley was not liable to Powell for any such breach.96 11.58 Farwell LJ appears to have identified with Eve J’s construction, however. At p 258 he said, ‘I will not say anything about the construction of the covenant, because, although I personally have very little doubt as to the true construction, I will assume, as the Master of the Rolls has done, a construction in favour of Mr Lawrence’s client [Powell]’.97 11.59 By the words used in section 79, the covenantor is taken to warrant in effect that neither he nor his successors in title will infringe the terms of the covenant: see Morrells of Oxford Ltd v Oxford United FC Ltd,98 where it was said:99 ‘Where a restrictive covenant is expressed in the active voice, and section 79 applies, its normal effect is not to turn “A covenants with X that A will not build” into “A and B covenant with X that A will not build”. Rather that it is that “A (on behalf of himself and B) covenants with X that A (or, as the circumstances may require, B) will not build”.’

94 [1909] 1 Ch 680, at pp 688–689. 95 As to which, see Defries v Milne [1913] 1 Ch 98; Ellis v Torrington [1920] 1 KB 399. 96 Farwell LJ, however, appears to have identified with Eve J’s construction. At p 258 his Lordship said; ‘I will not say anything about the construction of the covenant, because, although I personally have very little doubt as to the true construction, I will assume, as the Master of the Rolls has done, a construction in favour of Mr Lawrence’s client [Powell]’. 97 See, also, the observation of Atkin LJ in Berton v Alliance Economic Investment Co [1922] 1 KB 742, at p 759, that a person under a covenant not to use premises in a particular way cannot commit a breach of the covenant except by his own act or that of his agent – cited with approval by Lord Guest in Tophams Ltd v Earl of Sefton [1967] 1 AC 50. 98 [2001] Ch 459. 99 In para 35.

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11.60  The construction of restrictive covenants It is also clearly the case that where the prohibited act is expressed impersonally, eg a covenant that the act in question shall not be done100 or where he specifically covenants that neither he nor his assigns will do the prohibited act,101 the original covenantor is warranting that subsequent owners and occupiers will not commit a breach. 11.60 Where the terms of the covenant are such that the covenantor undertakes that neither he nor any other person bound by the covenant will do the prohibited act, then the question arises as to the nature of the personal liability of the covenantor for the acts of the person who actually commits the breach. In such a case, it is clear that the original covenantor has not himself done any act which constitutes a breach and accordingly the only breach on his part is breach of his warranty that the person who actually did the act would not do so. 11.61 Accordingly, unless the original covenantor has some control over the land (for example, where after the breach, he re-acquires or comes into possession of the land), or some control over the perpetrator of the breach (for example, where the breach is committed by the original covenantor’s lessee and the lease contains a similar covenant102 or where the original covenantor is a controlling shareholder of a company which commits the breach),103 the only remedy against the covenantor would be the remedy of damages for breach of warranty at common law, equity being powerless to award damages except in addition to or in substitution for an injunction.104 On any transfer, the original covenantor will generally take an indemnity from any transferee in relation to any such residual liability. In practice, actions will generally be brought against the current owner of the land in order that an injunction will lie. 11.62 Further, this ‘warranty’ part of the covenant is not a restrictive covenant  since it neither restricts the covenantor’s use of the burdened land nor lends itself to performance by doing nothing. For these reasons, this part of the covenant does not run with the burdened land so as to expose a later owner or occupier to liability for the acts of others.105

Negativing personal liability for the acts of others 11.63 Where the words of covenant are such as to import a warranty element,106 that element can be negatived by express provision.

100 As in Wilson v Hart (1866) 1 Ch App 463; Johnstone v Hall (1856) 2 K & J 414; Mumford v Walker (1901) 71 LJKB 19; Osborne v Bradley [1903] 2 Ch 446; Palethorpe v Home Brewery Co Ltd [1906] 2 KB 5; Prothero v Bell (1906) 22 TLR 370. 101 See Shears v Wells [1936] 1 All ER 832; Baily v De Crespigny (1869) LR 4 QB 180, although in the latter case the original covenantor’s liability was discharged by the user being instituted pursuant to the exercise of statutory powers. In such a case, the word ‘assigns’ will no doubt be given the same liberal meaning as in the words of covenant themselves, as to which see above para 11.47. 102 Cf Glass v Kencakes Ltd [1966] 1 QB 611. 103 Cf Jones v Lipman [1962] 1 WLR 832. See also Earl of Leicester v Wells-next-the-Sea UDC [1973] Ch 110. 104 Under s 50 of the Senior Courts Act 1981. 105 See the observations of Cozens-Hardy MR in Powell v Hemsley [1909] 2 Ch 252, at p 256 which, in that case, were spoken in the context of the liability of the original covenantor. See further, Bailey v De Crespigny (1869) LR 4 QB 180 and Lord Doe d Anglesea v Rugeley (Churchwardens) (1844) 6 QB 107. 106 Considered above at para 11.60.

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Specific areas of construction 11.67 The usual formula for doing so is by the addition, after the initial words of covenant, of the words ‘but not so as to render the said [covenantor] personally liable in damages for any breach of covenant committed after he shall have parted with all interest in the premises in respect of which such breach shall occur’.107 11.64 It will be noted, however, that such a formula would exclude liability only where the original covenantor had ceased to have any interest in the relevant land. He would thus still be liable for the acts of his lessee or licensee or  even a squatter if such persons are within the scope of the burden of the covenant and (in accordance with what has been said above) also of the warranty. 11.65 If the original covenantor wishes to confine his liability to his own acts,  then immediately before the words ‘after he shall have parted with all interest’ there should be inserted the words ‘during any period when he shall not be in occupation of or’.108 A much wider form of exclusion of liability was used in the covenant in Gaskin v Balls,109 the proviso being that ‘no covenant herein contained shall be personally binding on any person or persons except in respect of breaches committed during the time of his or their sole or joint seisin’, where the Court of Appeal held that a subsequent owner was relieved of liability for damages in respect of a predecessor’s breach.110 11.66 The liability of the original covenantor in respect of breach of a covenant not to permit or suffer any other person to commit a breach of covenant is confined to the period during which the covenantor is in a position, as a matter of legal right, so to permit or suffer.111

4 Whether the present owner or occupier of the burdened land is liable in respect of the acts or omissions of an earlier owner or occupier 11.67 Unlike the position in the case of the original covenantor, there is no privity of contract between the covenantee and subsequent owners and occupiers  of the burdened land and accordingly any liability of such owners and occupiers under the doctrine in Tulk v Moxhay is confined to the period of their ownership or occupation.112 107 See Key and Elphinstone’s, Precedents in Conveyancing (15th edn) vol 1, pp 896–897. 108 The addition of these words, assuming that the definition of ‘the covenantor’ extends to his successors, might also protect a successor in title from continuing breaches committed by a predecessor. In the absence of those or similar words, a successor would be liable for such continuing breaches: see: Gaskin v Balls (1879) 13 ChD 324. 109 (1879) 13 ChD 324. 110 This case was decided before it was established that the burden of a restrictive covenant could  not run at law but the exclusion of liability for damages would no doubt include a similar  exclusion in respect of an injunction. But see an analogous problem considered by Bowen LJ in Sayers v Collyer (1884) 28 ChD 103, at 109. 111 Tophams Ltd v Earl of Sefton [1967] 1 AC 50. 112 It is for this reason that on a sale by an owner of the burdened land other than the original covenantor, it is generally considered that no covenant of indemnity from the purchaser in respect of future breaches is required. However, as appears from what is said under the present heading, there may in certain circumstances still be some risk of future liability on the part of such a vendor and it is considered that a covenant of indemnity should be insisted upon in every contract for sale and inserted in the conveyance or transfer.

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11.68  The construction of restrictive covenants 11.68 As a matter of principle,113 it follows from this that the present owner (or occupier) of land is liable for breach of covenant only if his own acts amount to a breach and, with one important exception, he cannot be liable merely by reason of a breach committed by his predecessor. 11.69 The exception is where proceedings for a breach were commenced, or an order affecting the land was made, against the predecessor before the present owner acquired or was contractually committed to acquiring title to the property and (in the case of a subsequent sale to the purchaser) certain conditions are satisfied. If the present owner is a purchaser or claims through a purchaser from the person committing the breach, the conditions are as follows: ●●

●●

●●

in the case of a pending action, such purchaser either had express notice of the pending action or prior to the purchase, the proceedings had been registered as a pending action prior to the purchase under section 5 of the Land Charges Act 1972: see section 5(7) of that Act; in the case of a writ (now known as a claim form) or order affecting the land, the conditions are that the writ or order had been registered as such prior to the purchase under section 6 of the Land Charges Act 1972: see section 6(4); or in the case of registered land, it is protected by an agreed or unilateral notice, which will have the effect of protecting the priority of the pending land action in relation to a subsequent registered disposition for valuable consideration, over which it will have priority (Land Registration Act 2002, sections 29, 30 and 32).

For the earlier statutory provisions relating to registration of pending actions and writs and orders, see section 49(1) of the Land Registration Act 1925, and the rules made thereunder, to similar effect, and prior to that, section 7 of the Judgments Act 1839 (as supplemented by the Lis Pendens Act 1867), section 5 of the Land Charges Registration and Searches Act 1888, section 2 of the Land Charges Act 1900, and sections 2 and 6 of the Land Charges Act 1925. As to the principles upon which pending actions generally are held to affect purchasers, see Bellamy v Sabine,114 Price v Price,115 Wigram v Buckley.116 11.70 Returning to the point at para 11.68 above (that in general the present owner or occupier of land is liable for breach of covenant only if his own acts amount to a breach and, cannot be liable merely by reason of a breach committed by his predecessor), the question arises whether the fact of a previous breach by a predecessor is relevant in deciding whether the present owner has

113 In view of the absence of any clear-cut and comprehensive authority, it is considered necessary to clear the ground and start from first principles before endeavouring to assess the effect of the (very few and ad hoc) decisions which appear to have a bearing on the present question. 114 (1857) 1 De G & J 566. 115 (1887) 35 ChD 297. 116 [1894] 3 Ch 483. In addition to the matters set out in para 11.69 a party not himself in breach could become disentitled from himself being able to sue because of the conduct not only of himself but of the persons through whom he claims: see Osborne v Bradley [1903] 2 Ch 446 at 451. See also Signature of St Albans (Property) Ltd v Wragg [2017] EWHC 2352 (Ch) at para 69 onwards for the limits to this.

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Specific areas of construction 11.73 committed a breach. It is considered that the answer is in the affirmative only in the following circumstances: (i) if, applying the terms of the covenant to the present owner, there is an independent breach consisting of a repetition (loosely called a continuance) by him of the predecessor’s breach; (ii) if the present owner either participated in the previous breach or subsequently adopted the breach as his own.

(i):  Independent ‘Continuing’ Breach 11.71 The clearest example of a such a breach arises in connection with covenants restricting land to a particular use. Thus, if A commits a breach of a covenant not to use a dwellinghouse as a shop and then sells the premises to B, B will commit a repetition of the breach every day he uses the premises as a shop.117 For the reason given above, however, it is not a case of B being liable for A’s continuing breach but of his being liable for his own independent breach in continuing the use which constitutes a breach. 11.72 On the other hand, if the covenant is one restricting the erection of buildings to dwellinghouses, then if A erects shop premises (and uses them as such118) and then sells them to B who continues the use, it cannot be said of B that he has erected a prohibited building. The act of erecting a shop was complete once the building was complete and it became established that it was a shop.119 Accordingly, since B cannot120 be liable for A’s breach, whether B is liable for continuing to use the building as a shop will depend upon whether the continued use of the building as a shop will itself amount to a breach. This is a pure question of construction of the terms of the particular covenant. If a covenant can be implied121 that no building which is erected will be used except as a dwellinghouse, then B would be liable for breach of such implied covenant.122 11.73 Apart from such an implied covenant, then even if the covenant were construed as a covenant that no building other than a dwellinghouse shall ‘be’ upon the land,123 it seems clear that vis-à-vis B he will commit no breach by

117 See Doe d Ambler v Woodbridge (1829) 4 Man & Ry KB 302; Doe d Flower v Peck (1830) 1 B & Ad 428. 118 Without using them as such there might not be a breach: see Webb v Fagotti Bros (1898) 79 LT 683, below at para 11.156. 119 By user – see previous footnote. 120 Under the present heading. 121 As to which see below at para 11.221 et seq. In the case being considered it is, of course, assumed that there is no express covenant as to use. 122 In Kimber v Admans [1900] 1 Ch 412, at p 416, Vaughan Williams LJ said (in the context of the question – decided in the affirmative – whether a block of flats constituted one house): ‘If I found myself in such a position that I could see no object in the covenant if it was simply limited to the bricks and mortar erection, I should have been disposed to put upon the word “house” a meaning which would cover the user of the house, as distinguished from the physical erection’. 123 As in Webb v Fagotti Bros (1898) 79 LT 683, CA, considered below at para 11.222.

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11.74  The construction of restrictive covenants merely allowing the building to remain since the only obligations under a covenant which will bind him are those which can be complied with by doing nothing,124 although if the building could, if not used as a shop, equally well be used as a dwellinghouse, then in that case it would seem that if the covenant were so construed (ie that no building other than a dwellinghouse shall ‘be’ upon the land) he would be constrained against using the building as a shop since such a use would itself make the building a shop.125 11.74 There are only two decided cases which have a bearing on the present issue, namely Gaskin v Balls126 and Powell v Hemsley.127 Whilst they are both consistent with the foregoing analysis, neither can be said to provide a clear focus on the principles involved. 11.75 In Gaskin v Balls, the purchaser of a plot comprised in a building scheme  covenanted not to erect any buildings beyond a certain line, such covenant to be personally binding on the covenantor only in respect of breaches committed during his seisin. The covenantor erected a bakehouse beyond the building line and some five years later the defendant purchased the residue of a mortgage term in the plot and proceeded to erect a stable, also beyond the building line. The plaintiff (who was entitled to the benefit of the covenant under the building scheme) sought an injunction against the defendant for the removal of both buildings. The Court of Appeal upheld an injunction in respect of the stable but refused an injunction in respect of the bakehouse. Clearly the defendant had committed a breach in erecting the stable beyond the building line but he had not erected the bakehouse and, as seen above, even if the covenant were construed as meaning that no building should ‘be’ beyond the building line, this would not impose an obligation on him to remove it since such an obligation requires a positive act and therefore the burden of that part of the covenant’s obligations would not run with the land.128 It is therefore difficult to see how the defendant could have been held to be in breach in respect of the bakehouse. However, the main ground on which an injunction in respect of the bakehouse was refused was the plaintiff’s delay in complaining of it rather than the defendant’s absolution from breach in respect of it. 11.76 In Powell v Hemsley, the full facts of which are set out above,129 the building constituting the breach of covenant was erected by the defendant covenantor’s lessees but, following their bankruptcy and the disclaimer of the lease by their trustee in bankruptcy, the defendant resumed possession of the land together with the offending building. Eve J and the Court of Appeal

124 Above at para 1.10. See Hall v Ewin (1887) 37 ChD 74. In Webb v Fagotti, above, the erection of the restaurant and its subsequent use as a tavern were carried out by the same persons so as to amount to a composite breach. 125 See Webb v Fagotti, above; Shaw v Applegate [1977] 1 WLR 970. 126 (1879) 13 ChD 324, CA. 127 [1909] 1 Ch 680 (Eve J); affd [1909] 2 Ch 252. 128 Above at para 1.10 et seq. See Hall v Ewin (1887) 37 C D 74. Semble, in Crawley v Wolff (1888) 4 TLR 434, a covenant not to obstruct a view by planting or otherwise was not broken by not lopping trees already planted at the date of the covenant. Of course, once a breach of a restrictive covenant by the defendant is established, it is no answer to proceedings for a mandatory injunction that compliance requires a positive act. But in the absence of proceedings for enforcement having been commenced against the covenantor before the defendant acquired his interest and such proceedings having come to the notice of the defendant prior thereto, the remedy in respect of the covenantor’s breach would not be enforceable against the defendant. 129 Above, at para 11.55.

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Specific areas of construction 11.77 dismissed the contention that the defendant was himself in breach by reason of his ownership of the land with the offending building remaining constructed thereon, holding that the breach on the part of the tenant was a completed breach committed by them alone. In the Court of Appeal, Cozens-Hardy MR said: ‘I think also that the defendant, being in this matter simply in the position of an assignee of the lessees, is not liable to the peculiar though invaluable jurisdiction of the Court on the principle which is so often referred to as the Tulk v Moxhay130 principle, because he has not himself done anything in the matter, he has not in any way brought himself within the reason and the common sense of that doctrine.’

(ii): (a) Participation in, or (b) adoption of, predecessor’s breach (a)  Participation in breach 11.77 In Powell v Hemsley,131 the final argument put against the defendant was  that on the facts, namely that he was the landlord of the persons who committed the breach, that he took no action to prevent such commission and that when he regained possession of the land he allowed the offending building to remain on it, he was a participant in the lessees’ breach and liable as such. This argument was rejected. In dealing with the point, Cozens-Hardy MR said: ‘Then, lastly, it is said, although it is true that the defendant did not erect this building, and although it is true it was returned to him against his will, yet in the circumstances which are proved he must be taken to be assisting in, and to be a party to, the breach of covenant which was committed by Taylor and Fletcher. If it can be made out that a person who has not himself done the work has really been actively assisting and encouraging (by something more than words) the person who is the real wrongdoer to do what he has done, then I do not doubt that the arm of the Court is long enough to reach him. But I think the language of Lindley LJ in Hall v Ewin132 is very applicable to this case: “The principle of Tulk v Moxhay133 rests on good sense, but it imposes a burden on the land, and when it is sought to extend the principle to a person who is doing nothing himself in violation of the covenants in the lease I do not think it ought to be so extended.” I am aware that Lopes LJ in his judgment in one passage uses words which seem to go further than that. He says this:134 “I can quite understand that if Ewin had let the house to McNeff with notice of the purpose for which it was to be used, an injunction might have been rightly granted.” As to that I do not feel any doubt. Then he goes on, “or if it had been proved that he had seen the mode in which the premises were being used and had expressed his approval of it, in that case also an injunction would have been right.” With great respect to the learned Lord Justice I doubt whether that proposition, which goes far further than

130 (1848) 2 Ph 774. 131 [1909] 2 Ch 252, CA, affirming Eve J [1909] 1 Ch 680. For the full facts, see above, at para 11.55. 132 (1887) 37 ChD 74, 81. 133 (1848) 2 Ph 774. 134 (1887) 37 ChD 82.

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11.78  The construction of restrictive covenants anything to be found in the judgments of Cotton LJ or Lindley LJ, can be readily maintained.’135 11.78 A clear example of a successor being party to a breach by a predecessor would be if it was a term of a contract for sale to a purchaser that the vendor first did some act (eg erected a building) which constituted a breach of covenant. Again, if in Powell v Hemsley the lease had required the lessees to build a house  without first obtaining the approval of plans or if the lessor had encouraged or promoted the breach136 or had granted a licence to the lessee to build in a way which infringed the covenant137 or, perhaps, if the lessor merely had notice of an intention on the part of the lessees’ to commit a breach,138 it seems likely that an injunction would have been granted. 11.79 An example of the types of act which will amount to participation by a successor in the breach of a predecessor giving rise to liability is provided by Wrotham Park Estate Co v Parkside Homes Ltd.139 In that case the defendants included Parkside Homes Ltd (‘Parkside’), which had built the 14 houses without obtaining the plaintiff’s approval of the layout or building plans (as required by the covenant) and the 14 individual purchasers of those houses. In  late January 1972 Parkside had commenced building operations and proceeded to construct an access road and to put in footings. The writ in the action asking for an injunction was issued on 14 February 1972. Shortly afterwards Parkside accepted holding deposits in respect of all 14 houses. By mid-July the houses were in various stages of erection, some being well advanced. Between the beginning of October and the end of November 1972, contracts were exchanged with purchasers of all 14 houses. The houses were completed in or after January 1973 and the new owners moved in. It was argued that the purchasers were not liable for Parkside’s breach but this argument was rejected. In the course of his judgment Brightman J said:140 ‘Although the development started before any of the individual defendants purchased, ie in late 1971, the process of development was still continuing down to the end of 1972. All the individual defendants, except two,141 aided and  abetted the breach by contributing their deposits and entering into contracts  to purchase and building contracts with Parkside while the development was still in progress. In these circumstances it seems to me that

135 In view of the decision of the House of Lords in Tophams Ltd v Earl of Sefton [1967] 1 AC 50, it may also be doubted whether Lopes LJ’s first observation can be maintained, although there may be a difference, in this respect, between a landlord granting a lease and a vendor selling the freehold of the burdened land. In any case, as against the original covenantor, as the Tophams case shows, much may depend upon the precise terms of the covenant. The point now under consideration is, of course, concerned with the possible liability of successors (and not predecessors) and whilst a landlord who subsequently resumes possession may be regarded as in a similar position to a successor (see the observations of Cozens-Hardy MR cited above at para 11.77) a vendor who sells out-and-out is clearly a predecessor unless he subsequently acquires an interest in or occupation of the burdened land. 136 See the observations of Eve J at [1909] 1 Ch 688. 137 London, Chatham and Dover Rly Co v Bull (1882) 47 LT 413. 138 See the judgment of Cozens-Hardy MR at [1909] 2 Ch 357 cited above, referring to observations of Lopes LJ in Hall v Ewin (1887) 37 ChD 74, 81. 139 [1974]1 WLR 798. 140 [1974] 1 WLR 798, at 812B. 141 These two had jointly purchased one of the houses from one of the original purchasers but (in the absence of any submission that they ought on that account to be treated any differently) were held similarly liable.

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Specific areas of construction 11.81 I have jurisdiction to grant mandatory injunctions against all such individual defendants and I  am therefore able to award damages against them in substitution.’

(b)  Adoption of breach 11.80 In Powell v Hemsley,142 the defendant appears to have been content to leave the offending unfinished house on his land without completing it or, of course, occupying it. Eve J found as a fact143 that there was no ‘threat or intention on the part of the defendant to commit a breach’. But if, having regained possession, he completed the construction of the building and occupied it, then whilst that would not, in itself, have been a breach of covenant (since the terms of the covenants in question merely required plans to be submitted for approval before the commencement of erection of any building), the question would arise whether his doing these acts would amount to an adoption of the lessees’ breach so as to render him liable. On the facts of that case, it is considered that the answer would be in the negative since his resumption of possession was involuntary (arising as it did from the disclaimer of the 250-year lease by the lessees’ trustee in bankruptcy) and this would seem to preclude any element of ‘adoption’. But if the defendant, knowing of the breach, had negotiated a surrender of the lease from the lessees and then completed the construction of the house, it is conceived that the two elements combined might well have amounted to an adoption of the breach, although it might well be otherwise if the house had been completed by the lessees before negotiations for the surrender took place. Similar considerations would appear to be equally applicable to a successor in title from an owner who committed a breach.144

5 Whether references in the body of the covenant to the covenantee or the covenantor include references to other persons who are within the scope of the benefit and burden of the covenant Interpretation of the covenant 11.81 One aspect of this question has already been illustrated under heading 2 of this chapter.145 The wider implications of the problem may further be illustrated by the following example. Suppose that a conveyance by A of part of his land to B contains a covenant in the following form: ‘B for himself and his successors in title hereby covenants with A and his successors in title to the intent that this covenant shall enure for the benefit of A’s retained land shown coloured green on the plan annexed hereto, that B will not erect any building on any part of the land hereby conveyed except one dwellinghouse of which detailed plans shall first have been submitted to and approved by A or his surveyor, such approval not to be unreasonably withheld.’ 142 143 144 145

The facts of which are set out at para 11.55 above. [1909] 1 Ch 680, at p 689. See the observations of Cozens-Hardy LJ in Powell v Hemsley, cited above at para 11.76. See, especially, the observations of Eve J cited at para 11.56 above.

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11.82  The construction of restrictive covenants Suppose further that shortly afterwards, B resells the land to C subject to the covenant and C then commences the construction of a dwellinghouse on the land without first submitting plans for A’s approval. Is C thereby committing a breach of covenant? 11.82 Undoubtedly as B’s successor in title, C is within the scope of the burden of the covenant. But the only act prohibited in the body of the covenant is the construction of a dwellinghouse by B unless plans are first submitted and approved by A. The question therefore arises whether the reference at this point  in the covenant to B must be construed as a reference to B or his successors in title. In the absence of any enlarging words in the conveyance giving an extended meaning to references to ‘B’, there would appear to be no logical justification, as a matter of construction, for C being treated as within the  scope of the prohibition on B.146 In this connection, the position would appear to be the same in the case of a covenant to which section 79 of the Law of Property Act 1925 applies, since that section merely enlarges the scope of the persons on whose behalf the covenant is deemed to be made and does not give an enlarged meaning to references to the ‘covenantor’ in the body of the covenant. 11.83 Similarly, in the above example, in the absence of an extended meaning being expressly given to references to ‘A’, then if, before any building takes place, A sells his retained land to D, it nevertheless remains A’s, and not D’s, approval which is required to the plans.147 Furthermore, where it is provided that such approval is not to be unreasonably withheld, it has been said to be doubtful whether A could take into account D’s interests as a properly relevant factor, or that, even if he could, D could require A to take that factor into account.148 In the event of A’s death before any building takes place, where the clause prohibits something being built unless A’s approval is obtained, either: (a) the obligation to obtain his approval will die with him so as to permit building free from restriction; or (b) given there is no-one to give approval, the restriction will become an absolute one. Which of these it is will depend on the proper construction of the covenant. 11.84 A case where the restriction was held not to have ended with the demise of the vendor whose approval was required (interpretation (b) above), is Bell v Norman C Ashton Ltd.149 The covenant was in these terms: ’Except with the written consent of the vendors no building … shall be used for any other purpose than that of a private dwelling and not more than two houses shall be erected on any one plot …’. At p 365, Harman J said this: ‘[The covenant] does not say “Except with the written consent of the vendors, their heirs or assigns”, but “Except with the written consent of the vendors”.

146 In Brigg v Thornton [1904] 1 Ch 386, CA, the view was expressed that a restrictive covenant as to letting or user will be construed strictly and not so as to create a wider obligation than is imported by the actual words. In this connection compare London, Chatham, and Dover Rly Co v Bull (1882) 47 LT 413 with Re Fawcett and Holmes’ Contract (1889) 42 ChD 150. 147 See Mayner v Payne [1914] 2 Ch 555. Cf Caerns Motor Services Ltd v Texaco Ltd [1995] 1 All ER 247 (leasehold covenants). 148 Crest Nicholson Residential (South) Ltd v McAllister [2002] EWHC 2443 (Ch) per Neuberger J at para 46. Though the the case was overturned on appeal, this was on other grounds, and the Court of Appeal did not criticise this part of the decision (see [2004] 1 WLR 2409 at para 53). 149 (1956) 7 P&CR 359.

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Specific areas of construction 11.86 When those words are used, whatever they may mean, it seems to me that the only persons who could consent were the vendors, and, they not being available, there is no dispensing power to which the defendants can resort.’ Accordingly, the prohibition on use for anything other than a private dwellinghouse became an absolute one. 11.85 In Re Beechwood Homes Ltd’s Application,150 the Court of Appeal came to the same conclusion in relation to the covenants imposed there. Restriction 4 provided that no building should be erected upon the burdened land unless an appropriate plan had been ‘previously submitted to and approved of in writing by the vendors which approval shall not be unreasonably withheld’. Restriction 9 prohibited any part of the burdened land being ‘used as a road or way without the consent in writing of the vendors first being obtained’. Dillon LJ, giving the only reasoned judgment, said at 179M to 180B: ‘As to the consents, I accept [counsel’s] submission that the case proceeded in the Lands Tribunal and must therefore proceed in this court on the common basis that the power to consent under restriction 4, or under restriction 9, is a dispensing power attached to an otherwise absolute prohibition. Thus when, as has happened … there is no one to answer the description of the vendors … and so no one to give the consent, the position is that the dispensing power has gone. But the restrictions remain unmitigated by any dispensing power. It is not the position that the restrictions vanish with the dispensing power.’ 11.86 However, in Crest Nicholson Residential (South) Ltd v McAllister,151 Neuberger J held at first instance that the first interpretation ((a) in para 11.83 above) applied on the proper construction of the relevant deed, and the Court of Appeal, obiter, approved this part of his decision.152 Accordingly, in that case, when the vendor whose approval was required died, the prohibition also died, so that anything could be built. In that case, the relevant covenants given by the purchasers were in the following terms: ‘(1) Not to cause or permit or suffer any buildings or premises whatsoever which shall be erected on the said land to be used as and for a Public House or Beer House Inn Tavern or other licensed premises for the sale of Wines Spirits or Beer or other excisable liquors; (2) The premises shall not be used for any purpose other than those of or in connection with a private dwellinghouse or for professional purpose. No dwellinghouse or other building shall be erected on the land hereby conveyed unless the plans drawings and elevation thereof shall have been previously submitted to and approved of in writing by the Company but such

150 [1994] 2 EGLR 178. 151 [2002] EWHC 2443 (Ch). 152 At [2004] 1 WLR 2409, para 53. It was obiter because the decision in relation to the enforceability of the covenants in the case was overturned by the Court on the grounds they had not been annexed to the claimant’s land (which meant it was not actually necessary to decide what the effect of the dissolution of the vendor company was).

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11.86  The construction of restrictive covenants approval shall not be unreasonably or vexatiously withheld.’ [Emphasis added.] The relevant covenant (the second covenant in clause (2)) referred to the approval in writing of the Company, but the Company had been dissolved and no longer existed. On the face of it, once the company had ceased to exist and could not give its consent, there was on the face of it an absolute prohibition on building left in the second covenant in clause (2), and this also appeared also, on the face of it, to be consistent with the decisions in Bell and Beechwood (above). However, Neuberger J took into account the following matters in particular in coming to a contrary conclusion on the facts there. First, that clause (1) and the first covenant in clause (2) concerned the number and  type of buildings that could be erected and the use to be made of them, whereas the second covenant in (2) was simply concerned with giving the company a degree of control over the plans of any building proposed to be erected on a plot.153 Second, if the prohibition in the second covenant in clause (2) became absolute on the dissolution of the company, the effect would be to effectively take away  or  nullify the right given to the purchaser by the first covenant in clause (2). That, Neuberger J said,154 would be a particularly surprising result given that both covenants were included in the same paragraph. Third, the second covenant in clause (2) provided that the approval of the company to the plans could not be unreasonably withheld. That (as is well established) meant that if the approval was not forthcoming without good reason, the plans could be implemented. Yet the defendant contended that because the company ceased to exist, the covenant would absolutely prohibit the owner from erecting any building on a plot, even one which unquestionably complied with all the other covenants and which could not conceivably have been objected to by the company. Fourth, Neuberger J155 considered that when the covenants were entered into, the parties would have envisaged that so long as the Company retained any part of the estate, the second covenant in clause (2) could be enforced for the benefit of that retained land. However, whilst after the company ceased to have any beneficial interest in the estate, the owners of plots with the benefit of the second covenant annexed, would have the benefit of the second covenant, it would be of little value to them, unless the company chose to take their interests into account when its approval was sought, which it was not bound to do (see above). In all the circumstances, it was held to have been much more likely to have been intended, and was more sensible and realistic, that the requirement for approval of plans would fall away on the demise of the Company than that there should be an absolute prohibition on building. Accordingly, the second covenant in clause (2) interpreted in context meant that if the company ceased to exist the second covenant itself was discharged.

153 Paragraph 39 of the judgment. 154 Ibid, at para 40. 155 Ibid, at para 45.

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Specific areas of construction 11.88 Alternatively, a term fell to be implied that if the company ceased to exist, the second covenant was discharged,156 Neuberger J distinguished both Bell and Beechwood on the facts.157 11.87 The first instance decision in Crest Nicholson in relation to this was followed in Churchill v Temple,158 in which it was considered the alternative position, namely, following the death of the vendor, there was an absolute bar on any structural alteration of any kind at any time in the future, was one which the parties could not sensibly be taken to have intended.159 11.88 In contrast, on the facts in Re Hutchins Cottage,160 the Lands Tribunal (comprising the President, George Bartlett QC) considered the second interpretation ((b) in para 11.83 above) applied so that the demise of the vendor whose was required in order to use the land other than for a private dwellinghouse meant there was left an absolute prohibition on other uses, following Bell v Norman C Ashton Ltd (above), which had a similarly worded covenant. In that case, clauses 4 and 7 of the schedule to the conveyance read as follows: ‘4. No building shall at any time without the previous consent of the Vendor be used for any trade manufacture or business or otherwise than as a private dwellinghouse and no hoarding or advertisement shall ever be erected or displayed (except notices for letting or sale) … … 7. No new building shall ever be erected and no enlargement of or structural alteration to the existing building shall be made except according to plans and elevations previously approved in writing by the Vendor or the owners for the time being of the Vendors adjoining property known as Hutchins or his or their Surveyor such consent not to be unreasonably withheld.’ In relation to the first part of clause 4, the Tribunal held that it was similar to that in Bell and that the reasoning expressed by Harman J at p 365 applied, and it was to be similarly construed. That was said to be reinforced by the second part of clause 4 in that it would be surprising if, while the prohibition against the erection of hoardings or advertisement was good for all time, the prohibition against trade etc use terminated with the death of the vendor. Further, the provision for consent in the first part of the restriction did not suggest that the restriction against trade etc use was imposed simply for the benefit of the vendor. Rather it was a provision that applied ‘at any time’ but with a dispensing power on the part of the vendor. Accordingly, when the vendor dies it was considered the dispensing provision ceased to apply. Moreover, the provision was said to contrast with the consent provision in restriction 7 in respect of the approval of plans, where the power to consent was given to the vendor ‘or the owners for the time being’ of the land.

156 157 158 159 160

Ibid, paras 52–54. Ibid, at paras 62–64. [2010] EWHC 3369 (Ch). See para 63 of the judgment. [2010] UKUT 235 (LC).

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11.89  The construction of restrictive covenants In paragraph 10 of the judgment, the Tribunal said: ‘In the case of a covenant requiring the vendor’s approval of building plans where no provision is made in the event of the vendor’s death (or, if a company, its dissolution) there is a strong argument for construing the restriction as one that becomes spent if the vendor dies (or is dissolved): see Crest Nicholson Residential (South) Ltd v McAllister [2008] 1 All ER 46 per Neuberger J at paras 39 to 42. These considerations (which would have applied in the case of restriction 7, had not it provided as it did) do not, however, apply to the type of use restriction that is contained in restriction 4.’ 11.89 It is considered, however, that the last sentence contains too sweeping a statement. Even in the case of such a use restriction, the particular wording used, both in the clause in question, and in the other parts of the deed, all the relevant circumstances, and the context, would need to be fully considered. However, as will be appreciated, clause (or ‘restriction’) 7 in Hutchins gave the benefit of the covenant to the vendor and to the owners for the time being of the adjoining property known as Hutchins, and the claimant there was not actually the owner of such land, so that her claim to be entitled to enforce the restriction failed for this reason apart from anything else.161 11.90 Separately, it obviously needs to be considered in any given case whether ‘the Vendor’ appears from the conveyance itself to include successors in title of the land within the meaning of that phrase. In Wrotham Park Estate Co v Parkside Homes Ltd,162 although by the terms of the covenant entered into in 1935, the layout plan of proposed development was required to be approved (in terms) ‘by the Vendor or his Surveyors’ who had died in 1951 and whose daughter had transferred the remainder of the estate to the plaintiff company. It does not appear from the report of the case whether any extended meaning was given by the conveyance to the words ‘the Vendor’, but it appears from Brightman J’s judgment that counsel on both sides accepted that the word ‘Vendor’ in the stipulations there was, as a matter of construction, capable of including successors in title.163 11.91 In Mahon v Sims,164 the covenant provided that: ‘The Transferees hereby jointly and severally covenant with the Transferors to the intent so as to bind the land hereby transferred and each every part thereof into whosoever hands the same may come and to benefit and protect the Transferor’s property known as … and lands therewith not to use the property hereby transferred for any purpose other than that of a private garden 161 See para 11 of the judgment. 162 [1974] 2 All ER 321, 330e–330g. 163 It does not appear from the report whether there was any extended meaning given by the conveyance to the expression ‘the Vendor’. A similar point arose and appears to have been similarly dealt with in the Lands Tribunal decision of Re Reynolds’ Application (1987) 54 P&CR 121, 122. In Bell v Norman C Ashton Ltd (1956) 7 P&CR 359, Harman J, when dealing with the persons able to exercise a dispensing power in a building scheme said (at p 365): ‘It is to be noted that it [the covenant] does not say “Except with the written consent of the vendors, their heirs or assigns,” but “Except with the written consent of the vendors.” When those words are used, whatever they may mean, it seems to me that the only persons who could consent were the vendors, and, they not being available, there is no dispensing power to which the defendants can resort’. The covenant in question was entered into before 1925 but, as with s 79(1), there is nothing in s 78(1) of the Law of Property Act 1925 to enlarge references to ‘the vendor’ in the body of a particular stipulation. 164 [2005] 3 EGLR 67.

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Specific areas of construction 11.93 and not to arrange thereon any building other than a greenhouse garden shed or domestic garage in accordance with plans which have been approved previously by the Transferors in writing.’ Hart J held that, whilst the literal meaning of ‘the Transferors’ was the vendors, Mr and Mrs Houghton, the covenant was apt to include successors in title, because  that was the effect of section 78 of the Law of Property Act 1925 and express words of annexation were used, making it clear that the benefit of the covenant was intended to run with the retained land. These points were considered to be sufficient to make it possible to read ‘the Transferors’ as including successors in title. He held that this was the proper interpretation of the phrase, as it made ‘far better sense’ of the covenant than the literal meaning, adopting the reasoning of the judge in the County Court that the parties could not have intended that a third party should have control over the land after parting with the benefited land. In contrast to a building scheme, where a common vendor might wish to retain control, with a private sale of a single dwelling, he said it would be unusual for a person who had disposed of his interest in the property to retain the right to give or withhold consent to building, and if that had been intended the covenant would have been likely to have made it clear. Accordingly, after transfer the necessary consent was to able be given by successors in title. 11.92 In City Inn (Jersey) Ltd v 10 Trinity Square Ltd,165 the 1962 transfer by the Port of London Authority of a property called Mariner House, situated in the vicinity of its headquarters at 10 Trinity Square, contained a covenant: ‘Not to erect or make any external alteration or addition to or permit any other  person to erect or to make any external alteration or addition to any building or other erection of any sort upon the land hereby transferred or any  part thereof except in accordance with detailed plans and elevations which have been previously approved in writing by the Estate Officer for the time being of the Transferor at the expense of the person seeking such approval.’ 11.93 The defendant was the successor in title to the transferee. The claimant was the successor in title to the Port of London Authority. The defendant obtained the consent of the Port of London Authority to build a hotel on the site in accordance with planning permission, which was granted. The claimant contended that it being successor in title to the Authority, its consent was what was required. However, the Court of Appeal rejected this contention. Jacob LJ, for the Court, referred to the opening words of the transfer, which defined the Port of London Authority, the vendor, as ‘the Transferor’ and said it was ‘obviously a strong thing to say’ that a draftsman who had actually defined a term in the document had in some places in it intended some other meaning. The court’s view was that such a conclusion could only be reached ‘where, if the term is given its defined meaning the result would be absurd, given the factual background, known to both parties, in which the document was prepared’, and that ‘nothing less than absurdity’ would do.166 It would not be enough that ‘one conclusion makes better commercial sense than another’.

165 [2008] EWCA Civ 156. 166 A view subsequently rejected by Lord Clarke of Stone-cum-Ebony. See also, in relation to this, paras 11.98–11.99 below.

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11.94  The construction of restrictive covenants The appellant’s ‘big point’, as Jacob LJ described it, was that it made no commercial sense for the Port of London Authority to remain the beneficiary of any of the covenants once it had completely moved away, as there was no reason why it would wish to control any change of use or alteration to the property once that had happened. Only a successor in title would want the benefit of the covenants. In other words, a similar argument to that in Mahon v Sims was deployed. However, this submission was rejected167 on the basis that the court did ‘not think that the parties to the Transfer ever contemplated that situation (ie the Port of London Authority leaving), and simply did not cater for it. It was not always the case that in construing a document the court must assume that the parties had thought of every “what if?” and this was held to be such a case’. Jacob LJ. also referred to other difficulties in the way of the appellant’s construction, namely that conveyancers would normally include the phrase ‘successor in title’, where this was intended, and that it would be unworkable in circumstances in which the land was sold in different parcels, so that there was more than one successor in title. Accordingly, it was held that it was the Port of London Authority’s consent that was required. 11.94 Margerison v Bates168 was decided shortly after City Inn. A transfer of land contained a covenant: ‘Not to make any addition or enlargement or alteration to the … bungalow outbuildings and motor garage without plans having been first approved by the Vendor and her consent thereto signified in writing such consent not to be unreasonably withheld.’ ‘The Vendor’ was again defined in the conveyance as the person transferring the property. Mr Edward Bartley Jones QC, sitting as a deputy High Court judge, considered whether the Court of Appeal decision in City Inn meant that the term could only be given a different meaning – to include successors in title – if otherwise it would give rise to absurdity. He concluded that, taking the judgment as a whole, the Court of Appeal in City Inn was merely construing the relevant transfer in accordance with the principles set out in Investors Compensation Scheme Ltd v West Bromwich Building Society169 on the basis of the facts of the case. He therefore held that it was open to him to construe the conveyance before him as a whole in a way that might involve construing the term ‘the Vendor’ differently in different parts of the conveyance before him. He then considered the other provisions of the conveyance to see whether, at any point, the draftsman had or may have used the phrase ‘the Vendor’ to include her successors in title, but this had not been done. Indeed, in one provision the draftsman had expressly referred to ‘the Vendor or her successors in title’. As against this, he considered that it did make more commercial sense for ‘Vendor’ in the covenant to include successors in title, having regard not only to the fact that the vendor would have no interest in giving her consent once she had parted with her adjoining house, but also that she might move away to a distant place, become untraceable, or lose mental capacity. Further, the effect of construing the clause so that the only person who could give consent was the original

167 [2008] EWCA Civ 156, at para 31. 168 [2008] EWHC 1211 (Ch). 169 [1998] 1 WLR 896, at 912–913 (referred to at para 11.11 above).

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Specific areas of construction 11.95 vendor was to create a situation, in the event of her death, where the restrictive covenant either became absolute or was discharged. However, he held that this was not sufficient to overcome the clear literal meaning  of the term, in circumstances in which the draftsman had clearly referred to successors in title in a different provision. Further, although ‘the greater commercial merits and realities lay in extending the definition of the person who could give consent’, it could not be said that to confine the only person able to give consent under the covenant to the vendor personally amounted to commercial absurdity.170 She might have been prepared to give or refuse her consent in accordance with what she thought were the best interests of her successors in title. He also pointed out that the situation whereby consent is to be given by a person who no longer retains any interest in the benefiting land is not an unknown phenomenon, and that it was not entirely without commercial purpose, as it would prevent, for example, a multiplicity of consents from being required in the event of a sub-sale of various parts of the benefiting land (which was large enough for there to be further sub-division of it). It was also quite possible, as in the City case, that the parties to the conveyance did not direct their minds to the ‘what if’ that would arise when she died or became untraceable. He emphasised that it was not for the court to rewrite the contract, that parties actually made, into one that it thinks that they ought to have made. 11.95 In Churchill v Temple171 the relevant covenants provided that: ‘4. NO dwellinghouse shall be erected or maintained upon any part of the land hereby conveyed which shall not be in accordance as to situation character elevation workmanship materials sewers drains and other sanitary works with plans elevations and specifications which previous to the erection of such dwellinghouse shall have been submitted to and approved in writing by the Vendors or their surveyor such approval however not to be unreasonably withheld. 5. NOT to make any structural alteration or addition to a permitted dwellinghouse without the written consent of the Vendors or their surveyor.’ The original vendor covenantees were dead, and the question was whether the requirement in paragraphs 4 and 5 for the approval or written consent ‘of the vendors and their surveyor’ should be construed as meaning the approval or written consent of the vendors or their successors in title or their respective surveyors. Mr Nicholas Strauss QC, sitting as a deputy High Court judge, reviewed the decisions just referred to172 and said at para 37: ‘In considering the realities, commercial or otherwise, in this kind of case, it seems to me that the following points are to be borne in mind: (a) In many cases, including this one, the issue of construction arises long after the contract was entered into, and as between parties who are not the original parties to the contract. It is then usually impossible to know what were all the facts known, or reasonably available, to the parties, to which Investors Compensation requires the court to have regard,

170 Though see now in relation to this, para 11.100 below. 171 [2010] EWHC 3369 (Ch). 172 Mahon v Sims, City Inn, and Margerison v Bates.

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(b)

(c)

(d)

(e)

(f)

because the parties are not there to provide the evidence. Some of the facts may be clear, but there is a real risk that the court is proceeding on the basis of incomplete evidence as to the relevant background, and that it may therefore misunderstand it. This seems to me to provide justification for the approach of the deputy judge in Margerison, that he should not allow his perception of the commercial realities to override clear language on the conveyance. But this conveyance does not have clear language. I do not think that what Jacob LJ said in City Inn, that the parties may not have thought of all the “what ifs”, is part of the ratio of that case, and I have reservations about it. In the first place, Investors Compensation implies that one should assume that the parties have thought of all the contingencies which would have been apparent to a reasonable outsider with knowledge of the relevant factual background. What either of the parties had actually thought of would not be relevant or admissible, even if evidence of it was available. Secondly, in a conveyancing transaction of all transactions, it is counter-intuitive to attribute lack of foresight to the parties, when, normally, they will have been represented by professionals whose job it is to think of all the implications. Thirdly, which of the ‘what ifs’ does one assume to have been overlooked? It  seems to me that, unless the whole exercise of construction is to become even more like educated guesswork than it already is, where the parties to the agreement are not parties to the claim, one must assume that the parties did take into account reasonably foreseeable contingencies. It is always necessary to keep in mind the position of both parties. It is not enough just to consider what the vendor may have wanted to achieve. There is also the consideration that the purchaser might not see what the vendor wants as being in his interests, and that the vendor might, as a result, find it difficult to sell, or to get his price, if he insists upon it. The resulting covenant may represent a compromise. It is therefore not surprising to find covenants which are not altogether logical from the point of view of either party, or do not entirely achieve the probable aims of either of them. See Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Ltd [1990] QB 818 at 870 (CA). On the particular question which arises here, whether it makes sense for  the original vendors to have a power of veto after they have sold part  of their property, there are, as Neuberger J said,173 possible aesthetic,  financial and altruistic reasons even, in my view, in a one property case. Of these, no doubt, financial reasons are likely to be the most powerful. Where vendors retain part of their property, they may wish to be in a position, when they come to sell it, to promise the purchaser that they will exercise their powers under the covenant if requested to do so. This might be a valuable right, enabling them to sell at a good price, if potential purchasers of the retained part of the property might otherwise have been afraid of developments next door. Of course, a covenant with successors in title would serve this purpose even better, but it might not be acceptable to the purchasers. I therefore do not think that the approach of Judge Kirkham in Mahon is of

173 In Crest Nicholson Residential (South) Limited v McAllister [2002] EWHC 2443 (Ch) (above).

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Specific areas of construction 11.96 universal application, even in cases not involving a development or building scheme. It may not always sufficiently take into account the realities of the vendor’s position as regards both his negotiations with his current purchaser and his future negotiations with a purchaser of the retained land.’ It was argued, as in Mahon, that, in a case not involving a building scheme, the vendors would have no interest in the covenants after they had sold the property, and that it would be absurd to construe them as not including successors in title, who would have an obvious interest in them. Again, the argument was rejected. Looked at from both the original parties’ point of view, construing the covenant as meaning the original vendors only, in accordance with a literal interpretation, involved no absurdity as it meant the vendors could control building work on the adjoining site to their advantage or the advantage of a purchaser of their land if they wanted to do sell it, and could make it part of the bargain that they would exercise their rights under the covenant if called on to do so. From the covenantees’ point of view, a covenant in favour of the vendors personally would mean that it did not continue beyond their lifetimes, which may be better for them or any purchaser of their burdened land on a sale of it. In addition, the words ‘the Vendors or their surveyor’ suggested the parties had in mind a surveyor who was already involved.174 11.96 However, the suggestion that absurdity needs to be shown to depart from the literal meaning of words can no longer stand, having regard to the comments of Lord Clarke of Stone-cum-Ebony giving the judgment of the Supreme Court in Rainy Sky v Kokmin Bank,175 where (as already set out at para 11.17 above) he said as follows, at para 21: ‘It is not in my judgment necessary to conclude that, unless the most natural meaning of the words produces a result so extreme as to suggest that it was unintended, the court must give effect to that meaning. The language used by the parties will often have more than one potential meaning. I would accept the submission made on behalf of the appellants that the exercise of construction is essentially one unitary exercise in which the court must consider the language used and ascertain what a reasonable person, that is a person who has all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract, would have understood the parties to have meant. In doing so, the court must have regard to all the relevant surrounding circumstances. If there are two possible constructions, the court is entitled to prefer the construction which is consistent with business common sense and to reject the other.’ Whilst this does not directly deal with the position if a term is defined in one place in a document – for example, a statement referring to ‘the Vendors’ as being Mr and Mrs X – and is used in another place, the same principles may be thought to apply in that the question is whether, notwithstanding that reference, the parties intended in another part of the document that the term should include their successors in title. The statement of Lord Clarke of Stone-cum-Ebony would 174 Although in view of the fact that no particular surveyor was named, this particular point is perhaps doubtful. The vendors could always cease to intruct a surveyor and all would then depend on their consent (or were the term ‘Vendors’ to include successors in title, that of their successors). 175 [2011] 1 WLR 2900. A case in fact involving the financing of a shipping transaction.

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11.97  The construction of restrictive covenants suggest that it ought not to have to be absurd to construe it in this different way in order for it to be so construed, but that it is simply necessary to have regard to all the surrounding circumstances and ‘if there are two possible constructions’ to prefer the construction that is consistent with business common sense. 11.97 It is perhaps difficult at first blush to see how there can be ‘two possible constructions’ where in one part of the document there is a definition of the term used. However, where the term is used in a particular place in the document (such as a covenant) and, in its context in that place, something different may have been intended, similar reasoning may be thought to apply. It is necessary to consider all the circumstances and if something different may have been intended the court can apply ‘business common sense’ in deciding what the true meaning is. 11.98 In Starlight Shipping Company v Allianz Marine and Aviation Versicherungs AG,176 Flaux J said: ‘In my judgment, whilst the City Inn case was not specifically referred to by Lord Clarke, the approach to construction which he approves is the antithesis of the more rigid approach which Jacob LJ advocates and I doubt whether City Inn can still be regarded as good law after the decision of the Supreme Court in Rainy Sky. However, I do not need to decide that question, since the correct approach to construction is clearly that restated by Lord Clarke.’ The reasoning of Hart J in Mahon v Sims (decided before both City Inn and Rainy Sky) above seems consistent with this approach. 11.99 However, viewed following Rainy Sky and Starlight, it may be that City Inn would be decided differently today, given that it was based on the view that in order to construe the term ‘the Vendor’ differently in different places in a document ‘nothing less than absurdity’ would do. 11.100 It is also possible that Margerison v Bates would be decided differently today, having regard to the fact that no commercial absurdity need be shown in order to overcome the literal meaning of a term, and the Deputy Judge’s ‘clear view … that the greater commercial merits and realities lay in extending the definition of the person who could give consent’ to include successors in title. However, this is far from certain as the document would still need to be construed as a whole, and the use of the phrase ‘the Vendor or her successors in title’ in another part of the conveyance might well still be thought to show that the draftsman did not intend the phrase ‘the Vendor’ in the covenant to mean ‘the Vendor or her successors in title’ as he was clearly concerned to refer to successors in title where that was the case. 11.101 The views of the deputy judge in Churchill v Temple177 that, construing the covenant as being intended to cover only the vendor personally and not successors in title, not only involved no absurdity but made ‘perfectly good sense’, suggests that it may still be decided the same way, although it may perhaps be thought unlikely in many cases that a vendor would want to have a right to approve plans after leaving an ordinary residential house to live elsewhere, or would think it sensible to reserve that right, or that the purchaser would want the land bought to be blighted by the refusal of the vendor to allow

176 [2014] EWHC 3068 (Comm), at para 50. 177 [2010] EWHC 3369 (Ch).

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Specific areas of construction 11.104 any development, even after he has moved away, become impossible to find, or lost mental capacity, and had no real interest in the matter anymore, even though the covenant would only last for the vendor’s lifetime. 11.102 However, whilst the facts of past cases can be used as examples, what is clear is that each case needs to be considered on its own facts in its own context,  with the aim of ascertaining the intention of the parties at the time. Where the question is whether a covenant referring to ‘the Vendor’ is intended to include successors, this surely means bearing in mind that despite reference in another part of the document in question to ‘the Vendor’ being the seller personally (for example, at the start of the document, where the seller of the property involved is obviously not intended to be a successor in title, but needs to be identified), or despite a literal interpretation of the vendor not including successors in title, the parties may nonetheless have intended something different in relation to a particular covenant. Where the answer, as to whether this is so, is uncertain from the wording of the document itself, following the words of Lord Clarke of Stone-cum-Ebony for the Supreme Court in Rainy Sky,178 it is possible in considering the question to have regard to what it appears would have been commercially sensible at the time. 11.103 Where the covenant is construed to mean that approval can be given by the original vendors only, whilst their death might in most cases be held to have the effect of extinguishing the covenant (as the Deputy Judge in Churchill v Temple considered it did), serious difficulty would be likely to arise where the vendors are not known to be dead but are simply untraceable. As was said in Churchill v Temple, it is difficult to see how such provisions could be construed, or an implied term said to exist, which covered such eventualities,179 and the restriction would continue to apply although unable to be released. As was said, such a result could probably only be avoided by a term which had a different default position.180 11.104 It is for the applicant to prove the person whose consent is required under the covenant is dead. In Re Samson,181 the applicant contended the vendors whose consent was required were either dead or no longer contactable. The Upper Tribunal (referring to the judgment of Neuberger J at first instance in Crest Nicholson, and to the decision of the Tribunal in Re Havering College of Further Education’s Application182) acknowledged that a covenant preventing buildings being erected without the consent of the vendor could become obsolete for the purposes of section 84(1)(a) of the Law of Property Act 1925 where the vendor had died and the restriction had thereby come to an end,183 but said there was no evidence the vendors were dead, nor of 178 Above. 179 [2010] EWHC 3369 (Ch), at para 64. 180 Ibid. 181 [2017] UKUT 127 (LC). 182 [2006] LP/89/2004. 183 And, in fact, it would simply be unenforceable any more, even if not discharged by the Tribunal. In Re Havering College’s Application, the Tribunal, after referring to the Bell and Beechwood’s Application cases, referred also to Neuberger J’s judgment in Crest Nicholson, and said ‘We should be reluctant to conclude that the effect of the restriction was to prevent all development of the six acres of land after the death of the vendor because this would be to frustrate the fundamental expectation of the parties – that, after it ceased to be required for school purposes, the land should be developed with housing as part of the Bush Elms Estate. It  is, however, no part of the objectors’ case that the restriction has this effect, and, in the light of this, we conclude that restriction (i) should be deemed to be obsolete’.

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11.105  The construction of restrictive covenants their age at the date of the covenant, and that it was not prepared to assume they were dead simply from the passage of time.184

Drafting solutions 11.105 More comprehensive drafting of the terms of the covenant will overcome any limitations. An example of drafting which avoided the limitation referred to in para 11.82 above is provided by Shears v Wells,185 where the words in the body of the covenant (contained in a deed made in 1852) were: ‘And further that he or she (the said covenanting parties or party) will not and that his or her appointees assigns or heirs or any person or persons claiming or to claim through under or in trust for them him or her or by their his or her acts or defaults shall not’ do the prohibited act. Similarly, in Ives v Brown186 the covenant by the covenantor was that the covenantor ‘and all persons deriving title under him would not’ do various things. 11.106 Illustrations of wording which avoided the limitation referred to in para 11.83 above are also to be found in the cases. In Powell v Hemsley,187 a covenant entered into with Ball, required plans to be submitted ‘to Ball, his heirs and assigns for his or their approval’ and accordingly, the approval of Ball’s successor in title was the appropriate approval.188 Again, in Marquess of Zetland v Driver,189 a prohibition against acts and things which in the opinion of ‘the vendor’ might be prejudicial or detrimental to (inter alios) the vendor, was extended to the opinion of and prejudice or detriment to the vendor’s successor in title by a provision which declared that the expression ‘vendor’ should include, where the context admitted, the successors in title of the vendor.190 11.107 However, even where it is made clear that it is the consent of the covenantee or his successors in title which is required, difficulty may still arise, as a matter of construction, in determining whether the consent of each and every successor in title of a fragmented part of the retained land of the covenantee is required or whether the only consent required is that of a successor to the bulk (or some other part) of the retained land. This question arose in Everett v Remington.191 In that case: George Durrant, the owner of the Branksome Estate at Bournemouth, decided to sell off plots on the estate on the terms of a common form of building agreement with a builder which provided for the erection of houses

184 The covenant was, however, modified under s 84(1)(aa) as impeding a reasonable user of the land without securing practical benefits of substantial value or or advantage to those entitled to the benefit of it. 185 [1936] 1 All ER 832. 186 [1919] 2 Ch 314. 187 [1909] 1 Ch 680; affd [1909] 2 Ch 252. 188 A similar formula was used in Master v Hansard (1876) 4 ChD 718, at p 719. 189 [1939] Ch 1, CA. 190 A similar enlarging definition of ‘the Transferors’ appeared in relation to a requirement of the approval of plans by ‘the Surveyor of the Transferors’ in the covenant which was in issue in Cryer v Scott Bros (Sunbury) Ltd (1986) 55 P&CR 183. 191 [1892] 3 Ch 148 (Romer J). See, also, Wrotham Park Estates Co v Parkside Homes Ltd [1974] 1 WLR 798.

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Specific areas of construction 11.107 on the plots and taking from each purchaser of a completed house a covenant with George Durrant, his appointees, heirs and assigns that the purchaser his heirs or assigns would not ‘without the consent in writing of the said George Durrant, his heirs or assigns, make any alteration in the plan or elevation of the said messuage or dwellinghouse and buildings, nor erect any other messuage or building, wall, or fence upon the said piece or parcel of ground hereby conveyed’. One of the building agreements relating to two adjoining plots was entered into in 1874. In 1877, Remington purchased the freehold of one of these plots from George Durrant and later obtained George Durrant’s consent to use a building on the plot as a boys school. In 1879, the predecessor in title of Everett purchased the freehold of the other plot from George Durrant. After George Durrant’s death, the part of the Branksome Estate which remained unsold passed under his will to members of his family from whom Remington obtained written consent to the erection on Remington’s plot of a schoolroom at the rear of the existing building and Remington proceeded to erect the schoolroom. Everett sought a declaration that he was entitled to a mandatory injunction to have the building pulled down, claiming that he was one of the assigns whose consent was required and that he had not given any such consent. On the question whether Remington had committed a breach of the covenant, Romer J said:192 ‘In my opinion, by the term “the consent of the said George Durrant, his heirs, or assigns” (and it is worthy of notice that the phrase is not “and assigns”), is meant the owner for the time being of the Branksome Estate in its popular and broad sense, and not every lessee or purchaser of a small plot, like the plaintiff, and I think this view is confirmed by a consideration, not only of the circumstances of the estate and of the deeds of conveyance, but also of the form of building agreement used on the estate and relied on by the plaintiff, it being in pursuance of one of these agreements that the purchases of their plots by the plaintiff and the defendant, or their predecessors in title, were effected. Cases of difficulty were suggested on behalf of the plaintiff—as, for instance, whose consent would be necessary if the Durrant family had conveyed away in plots all the estate; but I need not now settle these puzzles (which would probably have to be decided by considering who, if any one, could be regarded as substantially the owner of the Branksome Estate), for, undoubtedly, at present the Durrant family still retain the estate, portions of it only being built over, and those portions having been only leased or sold by the family in comparatively small plots.’ In order to avoid such problems, it is clearly desirable in cases where the retained land comprises a large area for the class of successors in title whose consent is required to be fixed either by reference to the ownership of any part or parts of such land or by reference to the ownership of such part of the retained land as shall for the time being remain unsold.193

192 Ibid, at pp 158–159. 193 See Marquess of Zetland v Driver [1939] Ch 1; Cryer v Scott Bros (Sunbury) Ltd (1986) 55 P&CR 183, CA (‘unsold land’ only was benefited); Re Beechwood Homes Ltd’s Application (1992) 64 P&CR 535, LT.

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11.108  The construction of restrictive covenants In the light of the foregoing, the current practice of placing exclusive reliance on  the provisions of sections 78 and 79 of the Law of Property Act 1925 for giving an extended meaning to ‘the covenantee’ and ‘the covenantor’ respectively may well lead to unbalanced and unintended results and it would seem wise to include in all covenants an express extension of the meaning of those expressions wherever they appear in the covenant, such an express extension being expressed to apply unless the context otherwise requires and without prejudice to the operation of those sections. 11.108 It is also to be borne in mind that if it is intended that someone (be it the original vendor or a successor in title) must give consent if they are able to do so, or if it is reasonable to do so, a suitable form of words must be incorporated to avoid potentially insuperable problems (for the covenantor or their successor) if they are unable to do so (eg because they can no longer be found) or unreasonably refuse permission.194

Procedural matters where the vendor’s death puts an end to the covenant 11.109 Where a covenant requires that no building shall be erected without the  consent first of the vendor (ie covenantee) to plans to be submitted in advance  and the demise of the vendor means that the requirement for the approval of the plans is at end, the person subject to the covenant could apply for a declaration that this is so (as in Crest Nicholson195), or it could be so held in an action to enforce the covenant, or the person ‘subject’ to it could apply to the Upper Tribunal for discharge of the covenant on the grounds that it had thereby been rendered obsolete (as in Re 12 Park View Skipton196 where the vendor company had been dissolved).

CONSTRUCTION OF COMMON PHRASES The construction of words commonly found in restrictive covenants 11.110 As has already been stated, the same words may mean different things in different documents according to the context and the circumstances of the case. However, as Neuberger J stated at para 30 of Crest Nicholson:197 ‘it is not illegitimate to bear in mind the desirability of certainty and consistency in relation to the Court’s approach to the prima facie meaning of fairly common expressions in conveyances, leases, and, indeed, other types of document. It is desirable, where possible, for people to know with a reasonable certainty what their rights may be: uncertainty breeds costs, worry, and litigation. Where, as in Dobbs,198 the Court of Appeal has taken a pretty clear view as to the natural meaning of an expression such as 194 See Churchill v Temple (above), at para 64. 195 Crest Nicholson Residential (South) Ltd v McAllister [2002] EWHC 2443 (Ch). 196 [2016] UKUT 0552 (LC). 197 In a passage unaffected by the subsequent Court of Appeal decision. 198 Dobbs v Linford [1953] 1 QB 48.

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Construction of common phrases 11.113 “a private dwellinghouse”, it seems to me that, while accepting that the same expression can obviously have a different meaning because of its textual or factual context, as the decision in Downie199 indicates, the Court should be slow to depart from that meaning without some reason. I am reinforced in that view in this case, because both Romer LJ and Evershed MR referred to authority as assisting them in construing a covenant whose central words were identical to those in the present case (see at [1953] 1 QB 53 and 54).’200 Particular words and phrases will now be considered, with both these things falling to be borne in mind.

‘Adjoining’, ‘adjacent’, ‘contiguous’, ‘neighbouring’ 11.111 Although each of these words, taken in isolation, has a shade of meaning which differs from each of the others, nevertheless the context and the surrounding circumstances existing at the time the covenant was entered into may show an intention that the parties were using one of these words in a sense which is properly that of one of the others. 11.112 In Cave v Horsell,201 Buckley LJ said: ‘There are three words, “adjoining”, “adjacent” and “contiguous” which lie not far apart in the meaning which they convey. But in no one of them can its meaning be stated with exactitude and without exception. As to “adjoining”, the expression “next adjoining” or “immediately adjoining” is common and legitimate. The expression at once conveys that two things may adjoin which are not next to each other. “Adjacent” conveys that which lies “near to” rather than that which lies “next to”. “Contiguous” is perhaps of all three the least exact. Any one of the three may by its context be shown to convey “neighbouring” without the necessity of physical contact.’ Much depends on the context, however, and as Buckley LJ said at p 543: ‘There are few words, if indeed there be any, which bear a meaning so exact as that the reader can disregard the surrounding circumstances and the context in ascertaining the sense in which the word is employed.’ 11.113 Fletcher Moulton LJ remarked, in the course of his judgment, that whilst it was ‘unquestionable’ that the word ‘adjoining’ was normally used in the sense of ‘near to’ as well as ‘in contact with’ and said it was difficult to improve on the words of Buckley LJ. In that case, a reference to ‘any of the adjoining shops belonging to me on the Limes estate’ was held to extend to a shop which was separated from the shop in question by an intervening shop. The word ‘any’ pointed to a plurality which was defined by the words ‘belonging to me on the Limes estate’.

199 Downie v Turner [1951] 2 KB 112. 200 Where Lord Evershed MR said, ‘In my judgment departure from the prima facie meaning of the material words must depend upon particular words in a particular document; and that, … I think was the case in Downie v Turner’. See, also, the comments of Lewison LJ in Magnohard v Earl of Cadogan [2013] 1 WLR 24, at para 11: ‘it is imperative that there should be not only uniformity of principle in the approach of the courts but also a broad consistency in the conclusions reached’. 201 [1912] 3 KB 533, at p 544.

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11.114  The construction of restrictive covenants 11.114 In contrast, in Derby Motor Cab Co v Crompton and Evans Union Bank,202 a reference to ‘adjoining premises’ was held not to include premises which were near, but not next door, to the premises in question. Here the word ‘any’ was not used and there was nothing in the context to displace the natural meaning of ‘adjoining’ as requiring physical contact. 11.115 A similarly strict construction of the word ‘adjoining’ had been applied  in Ind Coope & Co Ltd v Hamblin203 where the purchaser of part of the vendors’ land covenanted that he would not ‘in the erection of buildings adjoining the hereditaments of the vendors’ permit the insertion of any lights overlooking such hereditaments. The purchaser constructed houses the rear walls of which were 20 feet from the boundary fence separating the purchaser’s land from the vendors’ retained land. The gardens of these houses reached the boundary fence and there were windows in the houses which overlooked the vendors’ land. The Court of Appeal held that these windows did not infringe the covenant since they were not in buildings ‘adjoining’ the vendor’s land.204 11.116 Similarly, in Re Ecclesiastical Comrs for England’s Conveyance,205 Luxmoore J construed the word ‘adjoining’ as meaning ‘touching,’206and this view was adopted by the Lands Tribunal in Re Shaw’s Application.207 In that case, a restriction imposed on the sale of a freehold flat, No 3, that no alterations were to be carried out without first submitting plans to ‘the vendor or its successor in title the owners and occupiers of adjoining property’ was held by the Lands Tribunal to require plans to be submitted only to the owners of flats Nos 1 and 2 in the same building which adjoined in the sense of ‘touching’ flat No 3. 11.117 In Harrison v Good,208 however, a context was found to exist in a conveyance containing a covenant by the purchaser of one of a number of adjoining and neighbouring lots, that nothing should be done which might be a nuisance to the occupiers or owners of the ‘adjoining’ property or the houses to be built thereon, which led to the conclusion that the adjoining property consisted of each of the other lots, whether they immediately adjoined each other or not. 11.118 In Re Skupinski’s Application,209 a restrictive covenant was described in  the deed as being ‘to benefit … the adjoining and neighbouring land belonging to the Vendor’. It was argued that this meant that only land that was both adjoining and neighbouring was benefited. However, it was held by the Lands Tribunal that the words conferred the benefit on (i) adjoining land and 202 (1913) 29 TLR 673. 203 (1900) 84 LT 168, CA, a decision commented on by Buckley LJ in Cave v Horsell, above. 204 Including the vendor’s air space. See, also, Patching v Dubbins (1853) Kay 1; affd 2 Eq Rep 71, where a covenant by the vendor in a conveyance of a plot prohibiting the erection on any part of the vendor’s land of any building ‘opposite’ the plot was held to be confined to buildings on land which was immediately opposite and the same width as the plot conveyed. In so deciding, the court held that the necessity for giving effect to every word of the covenant left no room for the application of the proferentem rule (that the construction must be taken most strongly against the grantor). 205 [1936] Ch 430. 206 Saying, at pp 440–441, ‘When used in conjunction with the word “land”, the word “adjoining” in its primary sense means that which lies near so as to touch in some part the land which it is said to adjoin. Of necessity it connotes contiguity … The word adjacent when used in contradistinction to the word “adjoining” means I think that which lies near but is not in actual contact with land. The degree of proximity must depend on the circumstances of each case’. 207 (1994) 68 P&CR 591 (HH Judge Marder QC, President). 208 (1871) LR 11 Eq 338. 209 (2004) LP/34/03 (George Bartlett QC, President).

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Construction of common phrases 11.121 (ii) on neighbouring land that was not adjoining, the purpose of the restriction being considered to be to give protection to both an adjoining driveway and to a plot of land across the road.

‘Agricultural purposes only’ 11.119 The placing of mobile homes on agricultural land for the accommodation  of gipsies who work on local farms is not an agricultural purpose.210 Neither is opening up a farm to the public involving the parking of visitors’ vehicles, the use of a marked trail, freedom for them to roam and look at the crops and animals, and the transporting of them by trailer around the farm.211 11.120 In Stockport Metropolitan Borough Council v Alwiyah Developments,212 any inherent uncertainty in the meaning of ‘agriculture’ was overcome by the covenant restricting the use of 4.5 acres of land ‘for any purpose other than agriculture as the same is defined in the Agriculture Act 1947’.

‘Alterations’ 11.121 Whilst covenants against making alterations to buildings are common in  conveyances of freehold developments, nearly all the cases have been concerned with the construction of such covenants in leases.213 As a general proposition, these cases show the need for comprehensive wording if both internal214 as well as external alterations are to be covered and if alterations in the external appearance215 of a building are also to be covered. Further, in the absence of the word ‘additions’, an addition to a building may216 or may not217 amount to an alteration. 210 Holdom v Kidd (1990) 61 P&CR 456, CA. 211 Which was held in Jewell v McGowan [2002] EWCA Civ 145 to be a breach of a covenant to use land ‘for agricultural purposes only’. What was proposed was said to be a commercial enterprise that was dependent on, but none the less different in character and purpose from, the agricultural activities. 212 (1986) 52 P&CR 278, CA. 213 But for an example of the enforcement by mandatory injunction of a freehold covenant against making or building certain alterations or erections on freehold land, see Morris v Grant (1875) WR 55. 214 Eg, Day v Waldron (1919) 88 LJKB 937 (internal conversion of a house into three flats not a breach of covenant against making any alteration in the arrangement or appearance of the demised premises). 215 In Joseph v LCC (1914) 111 LT 276, a covenant by a lessee not to make any alternation in the elevation of the buildings or in the architectural decoration was held not to be infringed by an external framework of electric lamps advertising whisky, ginger ale and Bovril. See, also, Bickmore v Dimmer [1903] 1 Ch 158. But in Heard v Stuart (1907) 24 TLR 104, a covenant by a lessee not to make any alteration in the external appearance of the demised house was infringed by bill-posted advertisements covering a wall of the house. Even then, however, the decision in Gresham Life Assurance Society Ltd v Ranger (1899) 15 TLR 454 shows that not all matters affecting external appearance will be covered. in that case keeping the outside blind of a shop permanently lowered was held not to be breach of a covenant not to alter the external appearance. 216 As in Doe d Palk v Marchetti (1831) 1 B & Ad 715 (addition of a portico to the front of a house). 217 Bickmore v Dimmer [1903] 1 Ch 158 (large clock affixed by bolts to the outside wall of a shop let to a watchmaker held not to be an alteration to the demised shop).

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11.122  The construction of restrictive covenants Usually, however, installing windows in a blank wall218 or making doorways219 will constitute an alteration.

‘Amusement arcade’ 11.122 In Shaw v Applegate,220 HH Judge Blackett-Ord sitting as a High Court judge (V-C of the County Palatine of Lancaster), having heard oral evidence on the question, held that for the purposes of a covenant entered into in 1967 prohibiting land consisting of an open yard and a small teahouse from being used as an ‘amusement arcade’, the expression meant a building with free access to the public and containing coin-in-the-slot amusement machines, irrespective of whether they were gaming machines, but excluding a building containing machines which were exclusively for the use of very small children. On appeal, Buckley LJ whilst upholding the first part of Judge Blackett-Ord’s conclusion, expressed doubt as to whether the exclusion was justified, although nothing turned on the point. In arriving at his conclusions Buckley LJ said: ‘Blackett-Ord V-C pointed out that it was really impossible to predicate of a building, just from its physical characteristics, that it was an amusement arcade and he treated the covenant as being a covenant restrictive of the use of any building on the property, and it is common ground in this court that that is a proper approach to the covenant.’

‘Ancillary’ 11.123 In GLN (Copenhagen) Southern Ltd v Tunbridge Wells Borough Council,221 the terms of a covenant were that the transferee should not ‘use or permit the use of the property hereby transferred or any part of it … 12.2.2 [a] for the principal purpose of use for image projection for the showing of whole films in an auditorium setting or [b] for any associated or ancillary or similar use’. The claimant contended that use of the property as a means of pedestrian access to a cinema on land not covered by the covenant would be a breach of it. The Court of Appeal held that it would not. Giving the principal judgment, Neuberger LJ said as follows: ‘40. I accept that land not itself actually used for a particular purpose, but used in connection with the purpose to which adjoining premises are put, can be said to be put to a use ancillary to that purpose. 41. To hold otherwise would be to fly in the face of the natural meaning of the word “ancillary”, as illustrated by the following remarks of Millett LJ in the Co-operative case222 at 331: “[Counsel for the Co-op] submits that

218 Sharp v Harrison [1922] 1 Ch 502. 219 British Empire Mutual Life Insurance Co v Cooper (1888) 4 TLR 362; Day v Waldron (1919) 88 LJKB 937. Contrast the latter case with Day v Waldron referred to in footnote 214 above, which shows the limiting effect of specifying the types of alteration. 220 [1977] 1 WLR 970. 221 [2004] EWCA Civ 1279. 222 Co-operative Retail Services Ltd v Tesco Stores Ltd [1998] 76 P&CR 328.

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Construction of common phrases 11.123 the provision of amenity land for the benefit, inter alia, of customers of a food retailing store is ancillary or incidental to the carrying on of a food retailing business. I accept that the act of making amenity land available for that purpose is incidental to the carrying on of a food retailing business. But it does not follow that the use to which the land is thereafter put is for the purpose of a food retail business.” Equally, I accept that the development and subsequent use of property exclusively as and for a means of access to a development would normally result in the use of the property being fairly said to be ancillary to the use of the development. 43. However, where, as here, the common parts are used as a means of access to a development, or part of a development, with several different uses, it is a potentially much more difficult question whether the use of the common parts concerned is ancillary to the use of one or some of the units in the development or in the relevant part of the development - particularly in the light of the wording of clause 12.2.2(b). Inevitably the resolution of that question must depend in part on the facts and in part on the provision in the document in which the word “ancillary” is to be found. 44. Thus, in the present case, if there was only two small shops to which the common parts would give access, I would have thought that use of the common parts would be ancillary to the cinema use. On the other hand, if one of the bigger retail units had franchised out an area for use as a perfumery counter I do not think one would describe the use of the common parts as “ancillary” to the use of that counter. 45. On the present facts I have come to the conclusion that the use of the common parts would not be in breach of clause 12.2.2(b). At least partly because the question is one of degree I do not find it entirely easy to articulate my reasons for reaching that conclusion. In that connection I take some comfort from what Hoffmann J said in the Norwich Union case at 138H-J: “The use of ordinary language to convey meaning often involves subtle discriminations which for most people are intuitive rather than capable of lucid explanation. An explanation of why ordinary English words in a particular context convey a given meaning is frequently more likely to confuse than to enlighten. Perhaps this is what judges mean when they say that questions of construction are often matters of impression.” 46. Having said that, like Hoffmann J in that case I must do my best. 47. The area occupied by Screens 1–5 represents little more than half of the area of the other property served by the Concourse, escalator, staircase and lift, namely the six first floor retail units, and the foyer and cafe in the cinema area. 48. In those circumstances, I see the force of the argument for saying that use of the common parts would be “ancillary” to the use of the first screen area: the latter represent a substantial proportion of the area (some 35%) served, effectively directly, by the common parts. However, clause 12.2.2(b) is concerned with precluding a use which is “ancillary” to a use within clause  12.2.2(a). In my judgment, this means that clause 12.2.2(b) only precludes something which is “ancillary” to the use of premises, which use, when taken as a whole, is within clause 12.2.2(a) – ie a use which can be described as “the principal purpose of use for image protection …” In other words, one must look at the totality of the premises (and the use of that totality) to which the use of the Property is said to be ancillary.’ 297

11.124  The construction of restrictive covenants 11.124 In Royal Mail Estates Ltd v Pridebank Ltd223 a covenant was in the following terms: ‘Not to use the property or any part thereof for uses other than as a parcels construction office and mechanical letter office telephone exchange or for other Post Office operational purposes or for uses falling within clauses 3,4 and 10 of the Town and Country Planning (Use Classes) Order No 1385 of 1972 or housing and purposes ancillary to Post Office operation uses or to the said classes 3, 4 and 10 including offices and housing.’ The question was whether the use of the word ‘housing’ in the first part of the clause was intended to be a stand-alone exception entitling the site to be used for  that purpose, or whether it was bound up with the following words and therefore limited to housing which was ancillary to the purposes of Post Office operational uses or to classes 3, 4 and 10 of the Use Classes Order. The court held that a stand-alone alternative use as housing was what was permitted. The following words, starting with the words ‘and purposes ancillary …’ made it plain that for the purposes of those ancillary items, it could include offices and housing. Accordingly, the word ‘housing’ in the first part of the clause would be completely otiose if it was not intended that housing was, by itself, intended to be a stand-alone provision. 11.125 In contrast, however, going back to GLN (Copenhagen) Southern Ltd v Tunbridge Wells Borough Council,224 mentioned above, the covenant ‘not to use or permit the use of the property hereby transferred or any part of it 12.2.1 as a cinema or 12.2.2[a] for the principal purpose of use for image projection for the showing of whole films in an auditorium setting or [b] for any associated or ancillary or similar use’ was construed to include a cinema in clause 12.2.2[a] as well as in 12.2.1. This was notwithstanding that it rendered clause 12.2.1 effectively redundant. A cinema was something that obviously fell within the meaning of the words used in clause 2.2.2[a] and Neuberger LJ said it was ‘not unusual for conveyances to say the same thing twice’. This was not cited in the Royal Mail case, but each covenant must, of course, be construed in its own context and circumstances. See also under ‘Business’ at para 11.173 below.

‘Annoyance’ (and ‘nuisance’) 11.126 A stipulation prohibiting annoyance is usually to be found in a more comprehensive prohibition which both extends the types of conduct which is prohibited and identifies the persons or groups who are to be protected from the conduct. Thus, in Ives v Brown the facts were as follows:225 One of the covenants entered into in 1883 by the purchaser of No 14 Wharf Road on the Branksome Estate at Bournemouth was that the purchaser and all persons deriving title under him ‘would not do or permit or suffer to be done in or upon the piece of ground any act, matter, or thing whatsoever which might be a nuisance, annoyance or disturbance to Elizabeth Durrant

223 [2010] EWHC 10 (Ch). 224 [2004] EWCA Civ 1279. 225 [1919] 2 Ch 314 (Sargant J).

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Construction of common phrases 11.127 and Frederick Fox, or the persons deriving title under them or either of them, or their tenants, or the neighbourhood’. The defendants to the present action were the freeholders (‘the defendant trustees’—all named Brown) and Willott Brothers to whom the defendant trustees had let a considerable portion of No 14 for the express purpose of being used for the business of motor char-a-banc and motor taxicab proprietors. Evidence was adduced to show that the manner in which the business was carried on caused annoyance to the occupiers of some of the houses on the estate. The freeholder of the unsold portions of the estate brought an action against both sets of defendants for an injunction to restrain breach of the above covenant. On the question whether there had been a breach, Sargant J said:226 ‘I am completely satisfied by the evidence that, while there was nothing in the conduct of the defendants Elliott Brothers’ business to amount to a common law nuisance, there was quite enough to constitute an “annoyance or disturbance, “within the meaning of the covenant in question, to the adjoining lessees and grantees from the owners of the Branksome Estate and to the neighbourhood. Such covenants are, of course, framed for the very purpose of securing a much more adequate protection than that given by the ordinary law of nuisance; and, while I recognise that they must not be used in indulgent fanciful or capricious objections or apprehensions, I am satisfied that in this case there was an annoyance or disturbance going far beyond this and of a definite practical character. In respect of this annoyance, however, I do not think that the defendant trustees are liable, since, in my judgment, it arose from the way in which the business was actually carried on by Elliott Brothers and was not necessarily incident to any motor business whatever that might have been carried on at No 14, Wharf Road.’ 11.127 Whilst this decision shows that annoyance covers a significantly wider category of conduct than nuisance, it requires further elaboration as follows: (1) In deciding that there was no common law nuisance, Sargant J equated the word ‘nuisance’ in the covenant with nuisance at common law. Bacon V-C had done the same in Harrison v Good227 where the covenant prohibited ‘nuisance’ simpliciter. However, in Tod-Heatly v Benham,228 Lindley LJ expressed the view that a covenant not to commit a nuisance would be otiose unless it gave some protection which went beyond what was available in an action for the tort of nuisance at common law and Cotton LJ expressed a similar view.229 In each case, the question is one of construction as to whether the word appears to be used in its technical or its popular sense. If the word has its technical common law meaning, then whether a nuisance had been committed would be a question of law whereas if it has a popular meaning,

226 227 228 229

Ibid, at p 321. (1871) LR 11 Eq 338. (1888) 40 ChD 80, CA. But even if the nature of nuisance is the same both at common law and as a matter of construction of a covenant, the remedies which are available are not necessarily on an equal footing. For breach of covenant not to commit a nuisance an injunction may be more readily granted than for the tort of nuisance as such: cf Achilli v Tovell [1927] 2 Ch 243; A-G v MidKent Rly Co (1867) 3 Ch App 100; Jenkins v Jackson (1888) 40 ChD 71.

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11.127  The construction of restrictive covenants oral evidence would be admissible as to whether the conduct complained of was regarded by the witness as a nuisance in its popular sense of being something which was disagreeable. (2) Sargant J found that there was annoyance or disturbance to lessees and owners of other parts of the Branksome Estate and to the neighbourhood. If, however, the evidence had merely shown annoyance or disturbance to the neighbourhood and not also to the benefited land, it may be that such a breach would not, as against Elliot Brothers who were not original covenantors, have been actionable, on the ground that this part of the covenant could not be said to touch and concern the benefited land. This point was considered, but left undecided, by the Court of Appeal in Marquess of Zetland v Driver230 but it would appear to be at least arguable that the opportunity to control the burdened land so as to secure practical good neighbourliness could in itself be said to be a benefit to the land of the covenantee so as to satisfy the requirement of touching and concerning.231 (3) The defendant trustees were held not liable for breach of the annoyance covenant on the ground that the annoyance was not necessarily incident to the carrying on of the business for which they let the premises. Unless, however, a landlord is to be considered as himself instituting the use for which he specifically lets the burdened land, it is difficult to see why the defendant trustees should have been liable even if the business would necessarily have caused annoyance since although they could be said, in such circumstances, to have ‘permitted’ the annoyance, the obligation not to permit an annoyance is not a restrictive covenant which runs with the land since it does not restrict any user of the land by the defendant trustees. Of course if, as in Tophams Ltd v Earl of Sefton,232 the defendant trustees had been the original covenantors, then they would, on the facts, have been liable but a covenant which does not restrict the user of land does not run with the land.233 This point does not, however, appear to have been argued.234 (4) The evidential problems in establishing whether any particular activity constitutes an annoyance are simplified in cases where the covenant provides for that issue to be determined by reference to the opinion of

230 [1939] Ch 1, at p 9. 231 See further, above, at para 1.33. In the case of ‘annoyance’ covenants between landlord and tenant, it has been recognised that a covenant prohibiting anything which might be or grow to be an annoyance to the lessor or the neighbourhood runs with the land as to both limbs: see Heard v Stuart (1907) 24 TLR 104. 232 [1967] 1 AC 50. The position was the same in R v Westminster City Council and the London Electricity Board, ex p Leicester Square Street Association (1989) 59 P&CR 51. 233 See above at para 1.11. 234 Had it been, then it is thought that the injunction which was awarded against the defendant trustees (as well as against Elliott Brothers) for breach of another covenant – not to carry on or permit to be carried on any trade or business except that of a builder or coal merchant – could only have been awarded on the basis that in letting the premises for business purposes, they must be considered as thereby carrying on the business for the purposes of the covenant; merely showing that they had permitted the lessees to carry on the business would not suffice since that part of the covenant did not run with the land in the hands of the defendant trustees. It further does not appear from the report precisely how (if at all) it would be possible for the defendant trustees to comply with the injunction since they were not in possession of the subjective land and, since the premises were specifically let for the business in question, the carrying on of that business was presumably not prohibited by the letting agreement. See, on this point, London and North Western Rly Co v Webb (1863) 9 LT 291.

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Construction of common phrases 11.127 a specified person such as the covenantee or his successor in title of the benefited land.235 In Marquess of Zetland v Driver,236 a covenant prohibited acts ‘which in the opinion of the vendor may be a public or private nuisance or prejudicial or detrimental to the vendor and the owners or occupiers of any adjoining property or to the neighbourhood’ and it was provided that the expression ‘vendor’ should include, where the context admitted, the successors in title of the vendor. Following the original vendor’s death, the owner of the burdened land opened a fish and chip shop (ie a shop for the sale of fried fish and chips for consumption off the premises) and evidence was adduced that the original vendor’s successor in title (under a settlement) had formed the opinion that carrying on the business of the sale of fried fish was detrimental to the amenities of the neighbourhood and to his own property. On this evidence, the Court of Appeal upheld an injunction against the carrying on of the business but limited it (so as to accord with the limits of the opinion) to the sale of fried fish. In delivering the judgment of the Court of Appeal, Farwell J rejected a contention that the opinion so formed was wholly unreasonable and capricious. The Court found that there was nothing in the evidence to support such contention or to show that it was other than a bona fide opinion formed after a proper consideration of the facts. The Court further held that, in forming his opinion, the present owner ‘was in no sense exercising a judicial or quasi-judicial function, and he was therefore under no obligation to give the respondents an opportunity of being heard’. (5) In the absence of the test being by reference to an identified person’s opinion, then annoyance may be established by showing that the user in question ‘reasonably troubles the mind and pleasure, not of a fanciful person or of a skilled person who knows the truth, but of the ordinary sensible English inhabitant of a house … although237 it may not appear to amount to physical detriment to comfort’ – per Bowen LJ in Tod-Heatley v Benham.238 In the same case, Cotton LJ described the position thus: ‘I think an act which is an interference with the pleasurable enjoyment, in reason, of a house is an “annoyance or grievance”. It is not necessary, in order to bring the case within the words, that the plaintiff should show that any particular man may object to it; but we must be satisfied by argument and by evidence, that reasonable people, having regard to the ordinary use of a house for pleasurable enjoyment, would be annoyed or aggrieved by what is being done there. It is not necessary, in order to show that there has been reasonable ground for annoyance or grievance, to show that, in fact, there is danger or risk of infection. A reasonable apprehension of nuisance

235 236 237 238

See, eg Hampstead and Suburban Properties Ltd v Diomedous [1969] 1 Ch 248. [1939] Ch 1. Unlike nuisance at common law. (1888) 40 ChD 80, at pp 97–98. This case was a landlord and tenant case in which the Court of Appeal accepted that a hospital for treatment of diseases of the throat, nose, ear, skin, eye, fistula and other diseases of the rectum might grow to the annoyance of occupiers of neighbouring or adjoining houses. See also National Schizophrenia Fellowship v Ribble Estates SA (1993) 25 HLR 476. And see Bramwell v Lacy (1879) 10 ChD 691; Frost v King Edward VII Welsh National Municipal Association for the Prevention Treatment and Abolition of Tuberculosis [1918] 2 Ch 180,

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11.128  The construction of restrictive covenants from acts done by the defendant will produce such interference with the pleasurable and reasonable enjoyment of the adjoining houses as to come within the words “annoyance and grievance”.’ 11.128 The word ‘nuisance’ in a covenant ‘is not necessarily to be confined by analogy with the common law of nuisance’ (per Carnwath LJ in Shephard v Turner).239 Accordingly, the common law cases on nuisance give little guidance on the scope of such a covenant, although ‘that, like the law of nuisance, it is to be applied “according to robust and common sense standards” (per Megarry J in Hampstead and Suburban Properties Ltd v Diomedous [1969] 1 Ch 248, p 258)’.240 11.129 Carnwath LJ in Shephard v Turner went on to say, ‘we have been referred to no authority in which ordinary construction works, carried out with reasonable care, have been held to involve a breach of such a covenant. Tod-Heatly was not such a case. (I note also that there appears to have been no finding to that effect by the Exeter County Court.) I do not think that such a covenant is to be equated with a covenant providing specific protection from construction disturbance’,241 although in principle, temporary, as well as permanent, nuisance or annoyance is covered by a covenant not to cause ‘nuisance or annoyance’.242 11.130 Where a covenant prohibits the use of land for purposes which are an annoyance or nuisance, the Court of Appeal held in Coventry School Foundation Trustees v Whitehouse243 that it is activities on the land that must in themselves amount to a nuisance or annoyance in order for there to be a breach. In that case, by a 1931 conveyance, a vendor sold a parcel of farmland to the Foundation. The land was sold subject to a restrictive covenant, which prohibited the use of the burdened land ‘for any purpose which shall or may be or grow to be in any way a nuisance, damage, annoyance or disturbance to the Vendors and their successors in title … or which may tend to depreciate or lessen the value of the Vendors’ adjoining or adjacent property …’. The land was thereafter used by the Foundation as playing fields. The vendor retained adjacent farmland, which was subsequently developed for housing. In 2010 the Foundation obtained planning permission to build a new junior school on part of the land. Residents of houses which had been built on the vendor’s retained land, claimed that they had the benefit of the covenant, and that the operation of the new school would result in a breach of the covenant. Their principal objections were based on the nuisance, annoyance and disturbance which they considered would arise from the consequent increase in traffic and parking, with attendant congestion, noise, and obstruction, and the effect on the enjoyment of their properties. They did not allege a breach of the second limb of the covenant relating to depreciation value. The Foundation sought a precautionary declaration244 that the proposed development and operation

239 [2006] 2 P&CR 28, at para 60. 240 Ibid. 241 Ibid. 242 Ibid. 243 [2014] 1 P&CR 4. 244 Under s 84(2) of the Law of Property Act 1925 – see para 14.4 et seq.

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Construction of common phrases 11.132 of the school on the burdened land would not in any event be a breach of the covenant.245 The judge held that the operation of the school would be likely to cause problems arising out of traffic on the surrounding roads, which might be or grow to be a nuisance or annoyance. The Court of Appeal, however, held that as the traffic which may cause nuisance, annoyance and disturbance would simply be a lawful use of the highway by the public, and would not take place on, or involve the carrying out of any prohibited activity on, the burdened land itself, that could not be a breach of the covenant. It was said that the covenant, entered into in 1931 when road use was not a problem, the covenant ‘was not aimed at prohibiting third party traffic movements on the public highway, any more than it was aimed at preserving an open space or a pleasant view for local residents’. 11.131 The Court concluded: ‘The important point is that the covenant is directed at prohibiting activities that take place on the burdened land. That is the designated zone in which certain activities are prohibited by the covenant. The residents’ objections based on potential traffic nuisance and annoyance are not to prohibited activities that will take place on the burdened land, but to increased traffic on nearby roads causing obstruction, congestion and noise which may affect the people living there.’ The Court suggested, however, that a prohibition on nuisance or annoyance caused by traffic or by traffic increase could be specially covered by a restrictive covenant.246 11.132 Use of land for a state school has even in old cases been held to not per se amount to a nuisance,247 although in Wauton v Coppard248 the operation of a proposed school was considered by Romer J to be an ‘injurious, or offensive, or disagreeable noise or nuisance’ on the basis of the prospect of balls coming over the boundary fence, school bells ringing, and boys at play shouting. A fried fish shop has been held to be breach of covenant against carrying on any trade which should be a nuisance or annoyance to residents of houses in the neighbourhood249 and also to be a breach of covenant against carrying on any offensive trade.250 ‘Annoyance’ has also been held able to be caused by singing, or piano lessons in an adjoining house.251 Diminishing the light flowing to the ground floor windows of adjoining premises, as by erecting open trellis fencing on top of a boundary fence, will

245 As well as disputing annexation on the basis the land intended to be benefited by the covenant could not be easily or fully ascertained. 246 Whereas the covenant in the case was, in contrast, only directed at prohibiting activities which take place on the burdened land’ (the emphasis being the court’s at para 58). 247 See, eg Harrison v Good (1871) LR 11 Eq 338. 248 [1899] 1 Ch 92 1. 249 Errington v Birt (1911) 105 LT 373. 250 Duke of Devonshire v Brookshaw (1899) 81 LT 83. 251 Eyre v Landi [1865] The Times, 1 June.

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11.133  The construction of restrictive covenants be an ‘annoyance’ if the pleasurable enjoyment of the adjoining premises is thereby interfered with.252 Carrying on the business of a licensed victualler (or publican) was held in 1823 not to be a trade or business which might be, or grow or lead to be, offensive, or any annoyance or disturbance to other tenants of the landlord covenantee.253 Here, as elsewhere, whether this would necessarily be the case would seem to depend upon time, place and circumstance. 11.133 In C & G Homes Ltd v Secretary of State for Health,254 the Court of Appeal held that the use by the Secretary of State of houses on an estate to provide residential care and accommodation within the community for former mental in-patients did not, on the evidence, amount to ‘a nuisance annoyance danger or detriment’ to the transferor or owners or occupiers for the time being of other parts of the estate. The only detriment claimed to have been suffered was that of alleged financial loss caused by the impaired marketability of other houses on the estate and the Court held that any such detriment did not fall within the purview of the covenant since only detriment which affected enjoyment of the other houses, as opposed to a financial loss associated with ownership, fell within the scope of the covenant. 11.134 Following on from this, in National Schizophrenia Fellowship v Ribble Estates SA,255 a restrictive covenant provided that ‘No noisy, offensive or dangerous trade or pursuit shall be carried out on the property … nor any trade or pursuit which may be or become in any way a nuisance, annoyance or danger to the Vendor or its successors in title or to the owners or occupiers of any neighbouring property which may tend to depreciate the value of the property. The owner was a registered charity which (like the Secretary of State in the C & G case) proposed to provide housing for former mental in-patients who were ready to be discharged back into the community, but needed a period of accommodation in stable surroundings prior to living independently. It sought a declaration that it would not be in breach of the covenant by so using the premises. The Court256 held that on the evidence presented there was no reasonable apprehension of risk on the part of those with the benefit of the covenant, as well as no evidence the value of any property would be diminished. Further, the covenant was held not to be directed to the type of occupants, or the activity of establishing the home, but to activities carried out on the property by the occupants (in the same way that such things as playing the violin at unsociable hours or, late night carpentry would be within it). 11.135 Not to do, or suffer to be done, anything which may be, or become, a nuisance or annoyance to the owners and occupiers of the benefited land includes the erection of a building (Wood v Cooper257) or an extension to an existing building (Davies v Dennis258), which, when built, will be an annoyance. 252 Wood v Cooper [1894] 3 Ch 671. To amount to a nuisance at common law, it would be necessary  for the adjoining owner to establish the existence of an easement of light to the windows and to show that the diminution in light materially affects the user of the premises: Lyme Valley Squash Club v Newcastle under Lyme Borough Council [1985] 2 All ER 405; Carr-Saunders v Dick McNeil Associates Ltd [1986] 1 WLR 922; Allen v Greenwood [1980] Ch 119. 253 Jones v Thorne (1823) 1 B&C 715. 254 [1991] Ch 365. 255 (1993) 25 HLR 476. 256 Mr Jules Sher QC sitting as a deputy High Court judge. 257 [1894] 3 Ch 671. 258 [2009] EWCA Civ 1081.

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Construction of common phrases 11.137 In Davies v Dennis, the annoyance comprised the fact the extension would reduce the claimants’ river views. In Davies v Dennis, another issue was whether if another clause required, as it did, the consent of a management company of the landowners within the scheme of covenants to any building and that consent was given (though on the facts it was subsequently found not to have been), that meant that the building could not be prevented by an individual landowner under the clause requiring ‘no annoyance’ to be caused to them. It was held that it did not mean this, and they were to be construed as two separate obligations. 11.136 The test of whether there is an ‘annoyance’ in the sense intended by the Court of Appeal in Tod-Heatley or in Davies v Dennis is to be applied ‘in an objective sense according to robust and common sense standards’ (notwithstanding that ‘annoyance’ is a wider term than ‘nuisance’ in a covenant): Wild Duck Ltd v Smith.259 There, the fact that two units on an estate of 40 intended holiday homes were left partially built was held not to constitute an ‘annoyance’ under the lessor’s covenant not to use the premises ‘in any way by which a nuisance damage or annoyance is likely to arise to’ the lessees occupying other homes on the estate. It was said that, ‘The respective states of units 15 and …18, while less than ideal, were a long way from the sort of annoyance referred to in Tod-Heatley (establishment of a hospital for infectious diseases) or in Davies v Dennis (erection of a building that blocked views from the claimants’ properties)’.260

‘Beershop‘, ‘beerhouse’ 11.137 The effect of the cases referred to below would appear to be that the expression ‘beershop’ (or ‘beer-shop’) connotes shop premises in which beer is sold retail in such circumstances as to characterise the premises as a shop which is primarily or to a significant extent concerned with the sale of beer for consumption off the premises.261 But if, although beer is sold from them, the premises do not consist of a ‘shop’ in the ordinary sense of that word, then there would be no breach of a covenant not to use the premises as a beer-shop. Thus, a public-house is not a ‘shop’,262 nor is a tavern263 and the same principle would seem to apply to a licensed restaurant,264 a theatre bar,265 a private

259 [2017] EWHC 1252 (Ch). 260 Paragraph 203 (Mr Edward Murray sitting as a deputy High Court judge). 261 London and Surburban Land and Building Co v Field (1881) 16 ChD 645; Nicoll v Fenning (1881) 19 ChD 258; Bishop of St Albans v Battersby (1878) 3 QBD 359. 262 Hall v Box (1870) 18 WR 820. 263 Coombs v Cook (1883) Cab & El 75. 264 In Lorden v Brooke-Hitching [1927] 2 KB 237, carrying on the business of a licensed restaurant was held not to be a breach of a covenant which prohibited (inter alia) the trades of ‘alehouse keeper, beerhouse keeper, tavern keeper and licensed victualler’. In Webb v Fagotti Bros (1898) 79 LT 683, the sale of wines and spirits under a restaurant licence in a building built as a restaurant (but where the liquor licence was obtained subsequently) was held to be a breach of a covenant that ‘no hotel, tavern, public-house, beerhouse, shop, or other building for the sale of wines, spirits, ale, or stout, or any spiritous, malt, or excisable liquor, of any kind’ should be built. 265 Buckle v Fredericks (1890) 44 ChD 244 where, however, it was held that the lessee of a theatre who purchased a piece of adjoining ground and built thereon an additional access to the theatre

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11.138  The construction of restrictive covenants hotel266 and a club.267 Similarly, if, although the premises from which beer is sold  consist of a ‘shop’, the shop is not mainly or to a significant extent concerned with the sale of beer but with other items, it would prima facie not answer the description of a beershop. Thus, a grocery shop which also sells wines, spirits and beer is prima facie not a beershop.268 11.138 A ‘beerhouse’ consists of premises at which beer is sold primarily for consumption on the premises.269 Whether a ‘beerhouse’ is also a beershop would seem to depend upon whether its activities are more closely aligned to those of a tavern and only small sales for consumption off the premises take place (in which case it will not be a beershop) or (to a significant extent) to a shop (in which case it will be a beershop).270 In each case, it is a question of fact whether one business is being carried on or two.271

‘Building’ Meaning of ‘building’ 11.139 A ‘building’ is one species of the genus ‘structure’ or ‘erection’. Both the words ‘structure’ and ‘erection’ covers a wider class of additions to land than buildings. Thus, electricity poles erected in pairs and connected by cross-struts were described by Vaisey J in National Trust for Places of Historic Interest or Natural Beauty v Midlands Electricity Board272 as ‘certainly not buildings though they may well be erections or structures, and for that proposition I rely on Wood v Cooper273 and Paddington Corpn v A-G’.274 11.140 However, whilst a solid structure having walls and a roof will always qualify as a ‘building’, the expression is not necessarily confined to that type of structure. Whether it is so confined depends upon the context. containing a bar on each floor for serving alcoholic drinks exclusively to the theatre-goers, committed a breach of a covenant that the ‘trade of an inn keeper, victualler, or retailer of wine, spirits or beer’ should not be carried on on the purchased land. 266 Duke of Devonshire v Simmons (1894) 11 TLR 52, although in that case the liquors which were sold to the hotel visitors did not include beer. An ‘inn’ appears to be in the same category, for this purpose, as a private hotel: Whatman v Gibson (1838) 9 Sim 196. 267 Cf Ranken v Hunt (1894) 10 R 249 (covenant against the sale of wines, malt or spirituous liquors, not infringed by the purchase and distribution of liquor amongst members of a club where the profits were applied for the purposes of the club). 268 See Jones v Bone (1870) LR 9 Eq 674, where James V-C refused to grant an injunction to restrain the owner of a grocery shop from selling bottled wine and spirits in the course of his trade as a grocer which was claimed to be in breach of a covenant that ‘the trade or calling of an hotel or tavern keeper, publican, or beer shop keeper, or seller by retail of wine, beer, spirits, or spirituous liquors’ should not be exercised or carried on. This case appears to have decided no more than that the remedy of injunction was not appropriate for such a breach, but the covenant was in much wider terms than merely prohibiting the trade of a beershop keeper. See, further, A Lewis & Co (Westminster) Ltd v Bell Property Trust Ltd [1940] Ch 345, Labone v Litherland UDC [1956] 1 WLR 522 and Fitz v Iles [1893] 1 Ch 77 considered below at para 11.175 et seq. 269 London and North Western Rly Co v Garnett (1869) LR 9 Eq 26; Holt & Co v Collyer (1881) 16 ChD 718. 270 See Bishop of St Albans v Battersby (1878) 3 QBD 359; London and Suburban Land and Building Co v Field (1881) 16 ChD 645; London and North Western Rly Co v Garnett (1869) LR 9 Eq 26; Holt & Co v Collyer (1881) 16 ChD 718. 271 See the cases referred to below at para 11.174 et seq, and Hartshorn v Angliss [1951] WN 293. 272 [1952] Ch 380, at p 384. 273 [1894] 3 Ch 671. 274 [1906] AC 1.

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Construction of common phrases 11.145 11.141 In Foster v Fraser,275 a purchaser covenanted that any ‘building’ erected on the land should be of a certain height and have a stuccoed front and slated roof and be used only as a dwellinghouse. In the context, it was held that an advertisement hoarding was not prohibited by the covenant. 11.142 On the other hand, in Nussey v Provincial Bill Posting Co276 purchasers of plots on a building estate covenanted that they would not erect any ‘building’ for manufacturing purposes or ‘for the carrying on of any noisy, noisome, offensive or dangerous trade or calling’. A lessee from a purchaser of two of the plots erected a hoarding 156-feet long and 15-feet high and displayed advertisements thereon.277 The Court of Appeal held that the hoarding was a ‘building’ within the meaning of the covenant upon which the trade of billposting was being carried on and being, in the circumstances, offensive to the owners of adjoining plots, the plaintiff was granted a mandatory injunction for its removal. 11.143 Similarly, in Long Eaton Recreation Grounds Co v Midland Rly Co,278 the Court of Appeal held that the construction of a railway embankment consisting substantially of compacted excavated material constituted non-compliance with a covenant not to erect ‘any building other than private dwellinghouses’ so as to entitle the claimant to compensation under section 68 of the Lands Clauses Consolidation Act 1845.279 The same may also apply to an elevated roadway. In Shropshire County Council v Edwards280, Judge Rubin, sitting as a High Court judge, refused on the evidence to decide whether the construction of a bank separating a road from a proposed travellers’ caravan site would or would not be a ‘building or other erection’. 11.144 Walls in a single line are prima facie ‘fences’ or ‘erections’ rather than ‘buildings’,281 but other factors may, in the particular context, give them the status of ‘buildings’. Thus, in Wood v Cooper,282 an open trellis fence erected on top of a boundary fence was held to be a ‘building’, and in Bowes v Law283 a garden wall mainly 8 feet 6 inches in height but a section of it being built to a height of 11 feet with a lean-to vinery attached to this section was held, as to the lower sections, not to constitute a ‘building’ but, as to the higher section with the vinery attached, to constitute a ‘building’ which infringed a covenant against erecting buildings other than dwellinghouses. 11.145 In Windsor Hotel (Newquay) Ltd v Allan284 a restrictive covenant provided that ‘no new building and no addition to any existing building shall at any time be erected on the said property’ except with the consent of the adjoining

275 276 277 278 279 280 281 282 283 284

[1893] 3 Ch 158. [1909] 1 Ch 734, CA. See, also, Stevens v Willing & Co Ltd [1929] WN 53 (Maugham J). [1902] 2 KB 574, CA. As to such compensation, see Chapter 10. (1982) 46 P&CR 270. Urban Housing Co Ltd v Oxford Corpn [1940] Ch 70, at pp 81–82, CA. [1894] 3 Ch 671. (1870) LR 9 Eq 636. [1981] JPL 274.

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11.146  The construction of restrictive covenants owner. A barbecue 10-feet high with one wall, two chimneys and an eight-foot base was held, by the judge and the Court of Appeal, to be a building and an injunction was granted requiring it to be removed. In the course of his judgment, Lord Denning MR said:285 ‘Not much help can be given to practitioners except to say that it depends on the permanence of the structure; its size; its characteristics, and so forth. In the ordinary way, I should have thought that a typical little barbecue is not a building. And when one looks at this structure – it looks like a lime kiln or something like that – of this great size, it seems to me that the judge was quite right in holding that it was a building, and was therefore covered by the restrictive covenant.’ 11.146 A part of a building may constitute a ‘building’ even if treated in isolation or alternatively it may qualify as such by being part of a whole building. Thus, in Manners (Lord) v Johnson,286 the erection of houses with bay windows which projected over the building line was held to be a breach of a covenant not to erect any building in front of the building line, and the same would apply where the bay windows are added subsequently to the erection of the houses.287 11.147 Similarly, in the absence of a context indicating the contrary, ‘building works’ will include works consisting of a whole building or part of a building.288 An ‘outbuilding’ has been held to qualify as such although attached to a house but where it had no interior access from the house.289 11.148 In Graham v Newcastle-upon-Tyne Corpn,290 the construction of an underground urinal the roof of which projected very slightly above the surface was held by the Court of Appeal not to infringe a covenant that certain land ‘should for ever thereafter be kept open and unbuilt upon’. It would, however, be otherwise if the terms of the covenant prohibited building not merely ‘upon’ but ‘upon or under’ the land.291 11.149 In Chamberlayne v Collins,292 the covenants affecting land forming part of a building estate included a stipulation against the fixing or fastening of ‘operative machinery’ and a stipulation that ‘no hut, tent, shed, caravan, house on wheels, or other chattel’ should be ‘erected, made, placed, or be allowed to remain upon any lot’.

285 At p 275. 286 (1875) 1 ChD 673. 287 See Western v MacDermott (1866) LR 1 Eq 499; affd 2 Ch App 72; Cryer v Scott Bros (Sunbury) Ltd (1986) 55 P&CR 183, CA. 288 Cryer v Scott Brothers (Sunbury) Ltd (1986) 55 P&CR 183, CA (extension to a dwelling house). 289 Powell v Hemsley [1909] 1 Ch 680; affd [1909] 2 Ch 252. Presumably an extension to an existing house which communicated with the house and formed an integral whole with it would not amount to a breach of a covenant not to erect any building except one dwelling house. 290 (1892) 67 LT 790. 291 See R v Westminster City Council, ex p Leicester Square Coventry Street Association (1989) 59  P&CR 51 (intended construction of an electricity sub-station under Leicester Square presumed to be an intended non-compliance with a covenant by the covenantor that he would ‘not erect any building except statues and pedestals for statues seats and fountains upon or under the same piece of ground’. 292 (1894) 70 LT 217, CA.

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Construction of common phrases 11.153 The Court of Appeal held that a switchback railway erected upon piles driven into the ground was both ‘operative machinery’ and a ‘chattel’ within the meaning of the stipulations.

Temporary buildings and mobile homes 11.150 A mobile touring caravan used for residential purposes is prima facie not a ‘building’ and would therefore not appear to answer the description of ‘a dwellinghouse’. However, if rendered immobile and connected to services on a site, it might then answer the description of a building and, if occupied as a residence, constitute a dwellinghouse. 11.151 In Shropshire County Council v Edwards,293 Judge Rubin, sitting as a High Court Judge, refused, on the evidence, to make a declaration as to whether immobile (or ‘less mobile’) caravans, if brought onto a site and connected to the water, electricity and drainage services proposed to be made available, would or would not amount to the erection of a dwellinghouse within the meaning of a covenant ‘not to erect any dwellinghouse’. 11.152 However, in the earlier case of Reckitt v Cody,294 the covenant provided that no house to be erected on the land should be used for any purpose other than that of a private dwellinghouse. A non-brick structure suited to habitation (having two rooms, a lobby, windows, a stove and flue pipes) placed on the top of dwarf walls but not affixed thereto was held by Eve J to amount to a building in the nature of a house, though its use as a schoolhouse meant there was a breach of the covenant, it having been erected for that purpose.295 Had the house been used as a dwelling, it would appear to have been within the ambit of a dwellinghouse. A modern ‘caravan’ placed permanently on supports on the ground would seem to be similar. 11.153 In R v Rent Officer of the Nottinghamshire Registration Area, ex p Allen296 a caravan resting on its own wheels and stabilising stands which were part of the original manufacture, connected to a mains water and electricity supply and a sewage pipe, all of which were easily disconnected, which was moveable and was moved from time to time for repairs or renovations, was found by Farquharson J not to be a ‘house’ for the purposes of the Rent Act  1977, however, which was said to depend in particular on features that reveal elements of on-site permanence, the caravan being fully mobile in the instant case, and having services connected in a way that was impermanent. Depending on the context, similar considerations might be thought to apply in the case of covenants. Whilst making a road involves works of construction, prima facie the construction  of a road which was level with the surrounding land would not amount to the construction of a building or structure.297

293 294 295 296 297

(1983) 46 P&CR 270, 279. [1920] 2 Ch 452. See ibid, p 462. (1986) 52 P&CR 41. In the Shorter Oxford Dictionary, the primary meaning (as a verb) of ‘erect’ is given as ‘elevate, raise’ but a secondary meaning given is ‘construct, establish’.

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11.154  The construction of restrictive covenants 11.154 An agreement not to erect ‘unseemly buildings’ is too vague and indefinite to be enforceable.298

Covenants not to ‘use’ a building for a specified purpose or not to erect buildings having a specific use 11.155 A covenant not to ‘use’ a building for specified purposes does not preclude the erection of a building seemingly adapted, or which may be capable of being used, for such a purpose.299 11.156 Equally, a covenant not to erect buildings having a specific use is not broken unless either the building is of a type which can only be used for such a use300 or it is actually used for such purpose.301 Thus, in Webb v Fagotti Bros,302 in 1886 two lots on a building estate at Bexhill were sold subject to a stipulation that, ‘Except on lots marked “tavern lot”, no hotel, tavern, public-house, beerhouse, shop, or other building for the sale of wines, spirits, ale, or stout, or any spirituous, malt, or excisable liquor of any kind, shall be built upon any lot’. The purchaser let the two lots to Fagotti Brothers who, in 1887, erected a restaurant thereon which was opened in March of that year and initially conducted without the sale of excisable liquor. Later, Fagotti Brothers obtained a licence to sell wines and spirits to diners in the restaurant and the owners of another lot sought an injunction to restrain them from doing so. It was argued that there was no breach since the construction of the restaurant and its opening as an unlicensed restaurant did not constitute a breach and the subsequent obtaining of the licence did not itself constitute a breach. But the Court of Appeal (upholding the decision of North J) unanimously held that once the building was used for the sale of excisable liquor, then there was a breach, the true meaning of the stipulation being that no ‘building for the sale of wines, spirits, ale, or stout, or any spirituous malt, or excisable liquor of any kind, shall “be” on any lot’.303 In the course of his judgment, Chitty LJ, after referring to the terms of the covenant, said:304 ‘I read that as meaning that there shall be no building on the land for the sale of wines, spirits, ale, or stout, or any spirituous, malt, or excisable liquor of 298 Murray v Dunn [1907] AC 283, HL. But a covenant not to alter or use land so as to interfere with a view is prima facie valid and enforceable: Crawley v Wolff (1888) 4 TLR 434, CA. In that case it was held that such a covenant was not infringed by permitting trees which existed at the date of the covenant to grow. But quite apart from the point of construction, as against a successor from the original covenantor, even if the covenant had sought to impose an obligation not to permit existing trees to grow, it would have been a positive covenant (requiring lopping) and as such the burden would not run with the land. 299 Worsley v Swann (1882) 51 LJ Ch 576. 300 For example, a church, cf Davis v Leicester Corpn [1894] 2 Ch 208; Willé v St John [1910] 1 Ch 325. 301 In Baxter v Four Oaks Properties Ltd [1965] Ch 816, the defendant company erected a three-storey block of nine self-contained flats on land which was subject to a covenant that ‘No dwellinghouse or other building … shall be used … otherwise than as a private residence’. In refusing an injunction to restrain the defendant company from using the building as flats, Cross J proceeded on the footing that the erection of the block did not of itself amount to a breach of the covenant. 302 (1898) 79 LT 683, CA. 303 Ibid, per Lindley MR at p 684. 304 Ibid.

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Construction of common phrases 11.160 any kind, except on the lots marked. I think that North J was right in saying that you cannot tell, as to many of the things mentioned, whether or not a house, when it is in course of building, is intended for a hotel, tavern, publichouse, etc. You must look to the user of the house before you can say that it is or is not a beerhouse, and before declaring that the covenant has been infringed.’ 11.157 In Shaw v Applegate,305 a covenant ‘not to build or permit to be built an amusement arcade on the said property’ (being an open piece of land) was treated in the same way, Buckley LJ stating that it was common ground that the covenant was to be treated as being a covenant restrictive of the use of any building on the property.

Covenant not to erect any building within a specified distance of a property 11.158 In Re Davies’s Application,306 the question arose from what point or points measure was to be taken in respect of a covenant not to erect any building ‘within a radius of 100 yards of the vendor’s property known as Loman House’. The Lands Tribunal held that the 100 yards was not to be measured from a compass point in the middle of the house itself but from all points along the boundaries of the entire property. This seems a satisfactory general approach but in any particular case the context may lead to a different construction.

Covenant not to build without first submitting plans for approval 11.159 Such a covenant, although requiring a positive act, nevertheless amounts to a restrictive covenant since one way of complying with it is to do nothing.307 Similarly, a positive covenant on the part of a purchaser of a plot to build a dwellinghouse thereon under the inspection and to the satisfaction of the vendor’s architect within 12 months involves a restrictive covenant (not confined to the period of 12 months) not to erect a dwellinghouse otherwise than to the satisfaction of the vendor’s architect.308 11.160 The question of construction as to whether the person whose approval is required is limited to the original covenantee or extends to any and, if so, which, of his successors has already been considered above.309

305 [1977] 1 WLR 970. 306 (1971) 25 P&CR 115, 136, LT (J R Laird Esq FRICS). Cf Re John Twiname Ltd’s Application (1971) 23 P&CR 413, LT (covenant not to build ‘within a radius of 200 feet measured from any part of the mansion house known as The Towers’.) 307 Powell v Hemsley [1909] 1 Ch 680, per Eve J at pp 687–688; affd [1909] 2 Ch 252. 308 Goolden v Anstee (1868) 18 LT 898. In that case the 12 months elapsed and the purchaser then proceeded to build in a situation which did not meet with the approval of the architect and an injunction was granted. 309 See above, para 11.81 et seq.

311

11.161  The construction of restrictive covenants If a building is erected without obtaining approval of the plans, that will constitute  a once-and-for-all breach and not a continuing breach.310 The consequences of this are threefold: (1) a successor in title to the land with the building erected thereon will not be in breach;311 (2) a successor in title of the benefited land who acquires such title after the building has been erected, will not be entitled to enforce the covenant unless he took an express assignment not only of the benefit of the covenant but also of the remedies for past breaches of the covenant;312 (3) the latest time of breach for the purposes of the Limitation Act 1980 and the doctrine of laches/acquiescence313 will be the completion of the building or (if earlier) the date when building work ceases.314

Constraints upon the manner of exercising the power of approval (1) Express or implied term that approval is not to be unreasonably withheld 11.161 In Powell v Hemsley,315 the covenant expressly provided that the required approval of plans should not be arbitrarily withheld. In the absence of such an express provision, the question whether approval can be unreasonably withheld depends upon whether a term can be implied that the covenantee (or other person whose approval is required) will not unreasonably refuse his approval. This, in turn, depends upon whether such an implied term is necessary in order to give business efficacy to the covenant.316 11.162 Each of these propositions emerges from the decision of the Court of Appeal in Cryer v Scott Bros (Sunbury) Ltd317 the facts of which were as follows: In 1955, an area of building land forming part of the Benwell Meadow Estate in Sunbury was transferred to the defendant company which covenanted, for the benefit of the vendors’ unsold land, only to erect detached houses thereon and to submit plans to the surveyor of the transferors (defined as including the owner or owners for the time being of adjoining land belonging to the transferors). The defendant company built a house on part of the land and in 1956 transferred that part together with the house to the plaintiff.

310 Powell v Hemsley, above. 311 Ibid. In that case, the lessees of the original covenantor, without submitting plans to the covenantee, had constructed the main structure of a dwelling house and roofed it in before going bankrupt and their trustee in bankruptcy then disclaimed the lease so that possession revested in the freeholder/covenantor. An action against him seeking a mandatory injunction for its demolition was dismissed but it is not clear what the position would have been had the freeholder proceeded to complete the dwelling house without himself submitting plans. 312 Ibid. 313 As to which, see below, para 13.119 et seq. 314 Cf Wrotham Park Estate Co v Parkside Homes Ltd [1974] 1 WLR 798. 315 Above. 316 Though see the full list of requirements relating to an implied term set out at para 11.23 above. 317 (1986) 55 P&CR 183, CA. See, also, the county court case of Bower & Bower v Goodyear [1986] CLY 2827.

312

Construction of common phrases 11.163 In 1958, the land of the transferors which remained unsold as at the date of the 1955 transfer (‘the benefited land’) was transferred to the defendant company which thus become entitled to the benefit of the covenants contained in the 1955 transfer so far as concerned the plaintiff’s land. Thereafter the defendant company divided the benefited land into some 60 plots and sold all but two small areas. In 1982, the plaintiff submitted plans for an extension to his house to the defendant company for its approval which was refused mainly on the grounds that the proposed extension would not be in the interests of the estate as a whole and that it would set a precedent which would lead to other applications for extensions. The plaintiff contended that if (which was found to be the case) the defendant company’s approval was necessary, a term should be implied that such approval should not be unreasonably withheld and that, on the facts, it had been unreasonably withheld. The Court of Appeal held that in the present case the intention of the parties to the 1955 transfer was that the land would be developed, that a covenant which enabled the covenantees to refuse approval arbitrarily and capriciously would be liable to defeat the purpose of the transfer, and that consequently it was necessary in order to give business efficacy to the covenant to imply a provision that the covenantee would not unreasonably withhold approval. The Court further held that, in the absence of a building scheme, the defendant company’s withholding of its approval would only be reasonable if the proposed extension would be detrimental or injurious to the two small areas which still remained in its hands and that since the criteria used did not relate to the impact of the proposed extension on that land and no evidence was adduced to show that it would have any detrimental effect on such land, the defendant company had unreasonably withheld its approval. 11.163 On the other hand, in Price v Bouch,318 the facts pointed firmly away from any need to imply such a term. In that case: By a deed executed in 1895, a co-operative scheme was established by 53 tradesmen for the acquisition, lotting and sub-division amongst themselves for building purposes of an estate in Northumberland. The deed contained restrictive covenants entered into between all 53 parties as the mutual covenantors (defined as including the heirs and assigns of each of the mutual covenantors) and provided that: ‘A majority of the mutual covenantors may … appoint a committee of not less than nine members chosen from the mutual covenantors whose duty it shall be to inspect plans of dwellinghouses and other buildings proposed to be erected and no dwellinghouse or other building shall be erected unless the plans thereof have first been submitted to and approved by a majority of such committee’. The plaintiffs proposed to build a house on a small part of an original lot and submitted plans for the approval of the committee. The plans were rejected and two further sets of plans were similarly rejected, in each case without any reasons being given by the committee although the plaintiffs suspected that their application was refused on the grounds of density rather than design. 318 (1986) 53 P&CR 257 (Millett J).

313

11.164  The construction of restrictive covenants By way of preliminary issues, the plaintiffs sought the determination of the questions (1) whether a term should be implied that the approval of plans should not be unreasonably withheld and (2) whether it was incumbent upon the committee to give reasons for their refusal to approve a building plan submitted to them. Millett J answered both questions in the negative and in answering the first question said:319 ‘There is no general principle of law that, whenever a contract requires the consent of one party to be obtained by the other, there is an implied term that such consent is not to be unreasonably refused. It all depends upon the circumstances of the particular contract. In Wrotham Park Estate Co Ltd v Parkside Homes Ltd320 the restrictive covenants were in the form of an absolute prohibition against building without the consent of the covenantee. In one case, however, the covenant was qualified by the addition of the words “such consent not to be unreasonably refused”. Brightman J (as he then was) said that these words would in any event have been implied, as counsel for the covenantee had conceded. There, however, the covenants were imposed not as part of a building scheme or scheme of development, but by a common vendor as he sold off the estate piecemeal, and they were enforceable not by the mutual covenantors but by the common vendor and his successors in title. I am prepared to assume, without in any way deciding, that, in such circumstances, a term is to be implied that consent shall not be unreasonably refused. That, however, was a very different case from the present. In the present case the decision to approve the plans or not is vested not in a common vendor or his successors in title but in the mutual covenantors themselves, who have delegated the decision to a majority of a committee elected by themselves. It was conceded that the committee had a duty to inspect and consider any application submitted to them to reach a decision themselves and not to delegate it to others, and to act honestly and in good faith and not for some improper or ulterior purpose. It was also accepted that, if the committee took into account irrelevant considerations or failed to take into account relevant considerations, or reached a perverse decision such that no reasonable committee could possibly reach, then their decision could be impugned, for it would be ultra vires. This, however, was not enough for the plaintiffs. They insisted that the committee must act reasonably and that they must give reasons for their decision, so that it could, if necessary, be challenged, when the court would adjudicate and decide, in the light of the evidence, whether those reasons were justified. If this were the case the result would be most unfortunate and one which the original parties to the deed of mutual covenant are most unlikely to have intended. Control would be removed from the committee and vested ultimately in the court, which would be called upon to adjudicate, presumably on the basis of expert evidence, on the very question which the parties had created their own domestic tribunal to decide.’ 11.164 Slade LJ in Cryer referred,321 with apparent approbation, to the judgment of Megarry V-C in the unreported case of Clerical Medical and General Life Assurance Society v Fanfare Properties Ltd (1981)322 where he 319 320 321 322

314

At pp 260–261. [1974] 1 WLR 798. (1986) 55 P&CR 183, CA, at p 194. A case which concerned a covenant in a lease not to set up any erection or building on the demised premises without the prior ‘approbation and consent’ of certain specified persons.

Construction of common phrases 11.167 drew a distinction, in the case of covenants requiring the giving of some consent, between those where the requirement of consent relates to a general matter (such as a covenant not without consent to carry on any trade) and covenants which require ‘the approval of a specific matter, as when the title has to be approved,323 or plans of a building have to be submitted for approval’. In respect of covenants in the latter category, Megarry V-C observed that ‘the Courts will not permit the party whose approval is required to misuse the requirement by refusing to approve a title or plans which are free from any tenable objection’. In relation to the implication of a term not to unreasonably refuse consent, see also the general principles in relation to the implication of terms, set out at para 11.23 et seq above. 11.165 Where a covenant appears to be in absolute terms and prevents alterations to a dwellinghouse without approval of plans by the vendors and their successors in title, this could potentially represent an absolute bar on alterations forever unless a term is implied that consent is not to be unreasonably refused, and in such circumstances the court may be inclined to imply a term that consent is not to be unreasonably refused: see Churchill v Temple.324 In that case, Mr Nicholas Strauss QC sitting as a deputy High Court judge said, obiter, that for these reasons he may have been prepared to imply such a term had it been necessary to decide the point (which it was not, as he found the covenant, though absolute in its terms, to be limited in time to the lifetime of the vendors). 11.166 A term that consent should not be withheld unreasonably is likely to be implied where the person whose consent is required is a public body or public official, particularly if the right granted would effectively be entirely frustrated if the body or person could refuse consent on any ground: see Eastleigh BC v Town Quay Developments Ltd.325 11.167 Even where no term that consent cannot be unreasonably be refused does not fall to be implied, it may be implied that consent is not to be refused in bad faith: see Lymington Marina Ltd v Macnamara.326 Further, an application could be made to the Upper Tribunal for discharge of the restriction under LPA 1925, s 84(1)(aa) or (c): see Beechwood Homes Ltd’s Application [1994] 28 EG 128 (CA) (though the requirements of those paragraphs would have to be fulfilled and a restriction is not obsolete under ground (a) merely because a building cannot be erected without prior approval of plans and due to the death of the person whose approval is required the dispensing power is obsolete: ibid). 323 As to this, see Caney v Leith [1937] 2 All ER 532 (Farwell J). 324 [2010] EWHC 3369 (Ch). 325 [2010] 2 P&CR 2, where there was a transfer of land to the defendant local authority with the reservation of a right for the transferee and its successors to enter onto the transferred land to lay pipes, cables, sewers and drains, subject to the consent of the authority’s Director of Planning and Development. It is also the case that a public authority must operate within the scheme and for the purposes of any Act under which a covenant is entered into, which may preclude a restriction being entered into, or consent for relaxation being withheld, for unauthorised purposes: see R v Braintree District Council, ex p Halls (2000) 80 P&CR 266 (see Chapter 10, page 218 above). 326 [2007] EWCA Civ 151. Although in Cryer v Scott Brothers (Sunbury) Ltd (1988) 55 P&CR 183, above, the fact that a right to withhold consent arbitrarily arbitrarily and capriciously could not have been intended as it ‘would have been liable to defeat the purpose of the grant’ was used as the basis for implying a term that consent should not be unreasonably withheld (see p 195).

315

11.168  The construction of restrictive covenants

(2) Constraints arising from the special position of the person whose approval is required 11.168 In the case of estate development, the person whose approval is required  may owe a duty to the plot owners on the estate, either as a result of express provisions, or pursuant to an implied term. In such cases, it seems clear that the primary obligation is to act correctly towards the plot owners as a whole and that this obligation will transcend any implied term to act reasonably only towards the person seeking the approval. An example of a case where there was express provisions is provided by Price v Bouch referred to above. In that case, the required approval was that of all the plot owners who, however, were required to act through a committee of nine of their number, and the present point was dealt with by Millett J in the following terms:327 ‘In my judgment, the mutual covenantors are equally bound by the decision of the committee, whether it be a decision to grant or refuse approval, and they are so bound, provided only that it is given honestly and in good faith and not for some improper purposes. Where the required consent is that of an individual who is free to consult his own interests exclusively, a provision that  such consent must not be unreasonably refused is often included in order to prevent consent being withheld arbitrarily, or capriciously, or from improper motives. If that is the only effect of including such a provision, its implication in the present case is unnecessary; while, if it goes beyond that, it produces consequences which are unlikely to have been intended by the parties and is an implication which, in my judgment, ought not to be made.’ 11.169 Although there is no direct authority on the point, it is considered that an example of a case of an implied term giving rise to an obligation to act correctly towards the plot owners as a whole (including the owner seeking approval) would be the case of a building scheme328 where the power of approval is reserved to the common vendor. In such a case, it is reasonable to suppose, in the absence of an express indication to the contrary in the terms of the covenant, that the paramount purpose of the covenant is to benefit the estate as a whole and not merely the land for the time being retained by the common vendor.329

Costs incurred in approving plans 11.170 In the absence of an express provision or local custom imposing liability  on the person seeking approval for the costs incurred by the person whose approval is required, those costs lie where they fall.330 327 Ibid, at p 261. 328 Cf Pearce v Maryon-Wilson [1935] Ch 188 and Master v Hansard (1876) 4 ChD 718. 329 Examples of cases where there was estate development but no building scheme and where, therefore, the paramount purpose of the covenant was solely to benefit the unsold land of the covenantee are the Court of Appeal cases of Master v Hansard (1876) 4 ChD 718, Marquess of Zetland v Driver [1939] Ch 1, and Cryer v Scott Bros (Sunbury) Ltd (1986) 55 P&CR 183. In each of these cases, there would be an obligation for the person whose approval or opinion was relevant, to have regard only to the interests of the benefited land owned by him. In the case of a building scheme, the scheme covenants enure for the benefit of all the plot owners although, of course, it is the approval of the common vendor only which (usually) is required for building plans. 330 Reading Industrial Co-operative Society v Palmer [1912] 2 Ch 42 (covenantor not required to pay vendor’s surveyor’s fee under a covenant not to build otherwise than in accordance with such drawings as might be previously approved by the vendor’s surveyor).

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Construction of common phrases 11.173

Demise of person whose approval is required 11.171 In relation to the death of the person (or dissolution of the company) whose approval is required, see above, para 11.83 et seq.

‘Bungalow’ 11.172 In Ward v Paterson,331 Romer J defined a bungalow as ‘a building of which the walls, with the exception of any gables, are no higher than the ground floor, and of which the roof starts at a point substantially not higher than the top of the wall of the ground floor, and it does not matter in what way the space in the roof of a building so constructed is used.’ In respect of the use of the roof space, there is a distinction between a ‘bungalow’ and a ‘single storey dwelling’, the latter excluding the use of the roof space as a room.332

‘Business’ 11.173 In Rolls v Miller,333 Lindley LJ defined the word ‘business’ as meaning ‘almost anything which is an occupation, as distinguished from a pleasure – anything which is an occupation or duty which requires attention is a business’. The word accordingly includes every trade and profession. The carrying on of the activity of a sub-post office in a shop is not ‘trading’,334 although it may amount to the carrying on of a business. ‘Trade’ involves buying and selling and accordingly the business of running a private lunatic asylum has been held (on that ground) not to be an ‘offensive trade’.335 The use of land as a public car park represents using the land for a ‘business’ within the meaning of a covenant that ‘no trade or business of any kind’ should be carried on upon the land.336 The running of a hospital where the patients make small payments according to their means is a business,337 but the provision by the Department of Health of residential care and accommodation within the community for former mental in-patients probably does not amount to the carrying on of a business within the meaning of a covenant not to use the property for carrying on any trade or business.338

331 [1929] 2 Ch 396. As to ‘modern regency chalet bungalow’, see Re K & C Bhavnani (Holdings)’s Application (1960) 12 P&CR 269, at 271, LT. 332 See Re Kershaw’s Application (1975) 31 P&CR 187, 190, LT (Douglas Frank QC). 333 (1884) 27 ChD 71, at p 88. 334 Frampton v Gillison [1927] 1 Ch 196. 335 Doe d Wetherell v Bird (1834) 2 Ad & El 161, at p 166. 336 Re 6, 8, 10 and 12 Elm Avenue, New Milton [1984] 1 WLR 1398. 337 Bramwell v Lacy (1879) 10 ChD 691. 338 C & G Homes Ltd v Secretary of State for Health [1991] Ch 365.

317

11.174  The construction of restrictive covenants

Overlap between two businesses 11.174 What activities can properly be regarded as falling within the scope of a particular trade or business is a question of fact dependent upon what is customary in the trade or business in the locality in question. Frequently, the proper activities of one business will overlap with the proper activities of another business. Such an overlap does not constitute the partial carrying on by either business of the other (or others). Thus, in A Lewis & Co (Westminster) Ltd v Bell Property Trust Ltd339 an ABC tea shop and restaurant also sold cigarettes at the cashier’s desk to its customers and occasionally to other persons entering the premises. It was claimed that in so doing, the ABC was using the premises ‘for the purposes of the business of the sale of tobacco cigars and cigarettes’. In answer to this claim, it was not argued that selling cigarettes alone was not carrying on the business of selling ‘tobacco cigars and cigarettes’340 but the argument was that, on the facts, the only business being carried on by the ABC was the business of a tea shop and restaurant and not two businesses, the other being the sale of cigarettes. Simonds J, in accepting this argument, said:341 ‘I find it difficult to take the view that anybody on being asked, “What is the business which the ABC carry on at this shop?” would say: “They carry on several businesses. They carry on the business of selling refreshments. They carry on the business of selling (it may be) confectionery. They carry on the business of selling tobacco, cigars and cigarettes.” I do not think that, according to the ordinary use of language, and upon the plain meaning of the covenant, that is an interpretation which could fairly be given to it. In my view, what is done at these premises is the carrying on of the business of a tea-shop and restaurant, and that involves, amongst other things, the sale of cigarettes. It is common—indeed, I am told that it is almost universal—for cigarettes to be sold in tea-shops of this character. Accordingly, it appears to me that it is no more right to predicate of this shop that there is carried on there the business of the sale of tobacco, cigars and cigarettes than it is to say of it that there is carried on there the business of the sale of milk, or the business of the sale of confectionery.’ 11.175 This reasoning was applied by McNair J in Labone v Litherland UDC342 where a similar question arose in connection with a covenant inhibiting the carrying on of the trade or business of ‘bread and confectionery’ and the carrying on of the trade of ‘grocer’ in the course of which bread and confectionery were sold representing 2.25 per cent of total sales. Evidence was adduced showing that in the district where the shop was situated (the Liverpool

339 [1940] Ch 345 (Simonds J). 340 The decision in A-G v Plymouth Corpn (1909) 100 LT 742 shows that ‘a man may be said to carry on a particular trade though he does not carry it on in all its branches’—per Simonds J, ibid, at p 349. But there are limits to this proposition. In Texaco Antilles Ltd v Kernochan [1973] AC 609, Lord Cross, delivering the advice of the Privy Council on an appeal from the Bahamas, appears to have accepted an argument by counsel that a covenant not to carry on the business of a chemist would not be broken by the carrying on of the business of selling cosmetics even though many chemists sell cosmetics. 341 Ibid, at p 348. 342 [1956] 1 WLR 522.

318

Construction of common phrases 11.179 area) the sale of bread and confectionery was part of the normal trade of a grocer. On the facts, it was held that the only trade or business being carried on was that of a grocer. In the course of his judgment, McNair J said:343 ‘The class of trade or business, the monopoly of which is reserved to the plaintiff, is, in my judgment, the trade or business of a bread and confectionery shop … If this is correct as a matter of construction, then the claim of the plaintiff fails, for neither of the third parties is carrying on the trade or business of such a shop. Even accepting the plaintiff’s contention that the trade or business of “bread and confectionery” means the trade or business of selling bread and confectionery, in my judgment the same result follows. The covenant not to carry on the trade or business of selling bread and confectionery, plainly is different from a covenant not to sell bread and confectionery by way of trade or business. The latter covenant would be breached by any sale (beyond possibly minimal quantities) of bread and confectionery.’ 11.176 The final sentence in the above quotation indicates the way of avoiding overlap, if that is the intention of the parties,344 but if the goods whose sale is prohibited are described by reference to a class, eg ‘drapery goods’, only goods which the evidence shows clearly satisfy that description will fall within the scope of the prohibition.345 11.177 The scope of a butcher’s business was considered in Hartshorn v Angliss,346 that of a ‘food hall’ and of a ‘general hardware merchant’ in Rother v Colchester Corpn,347 that of a grocer in Lumley v Metropolitan Rly Co,348 and that of a ‘fancy draper and hosier’ in Stuart v Diplock.349 11.178 Where, however, a business is not a single business embracing a number of subsidiary business activities but is a conglomerate of recognisably different businesses, then the carrying on of any one of those businesses, even though it may be ancillary to one of the other businesses, will be treated as an infringement of a covenant against such business. 11.179 Thus, in Fitz v Iles,350 the defendants, who were dealers in tea, coffee and other groceries, proposed, as ancillary to their business and for the

343 Ibid, at p 525. 344 This method was successfully adopted in Newton Abbot Co-operative Society Ltd v Williamson  and Treadgold Ltd [1952] Ch 286. In Rother v Colchester Corpn [1969] 1 WLR 720 (Megarry J), it appears, at first sight, that this method was being adopted but in the context, the prohibition in a lease of a food hall that the tenants ‘will not on the demised premises sell any commodity or item which may cause the council to commit a breach of the covenant with the tenant not to let any other shops on the said estate for the purpose of a general hardware merchant or ironmonger’ merely prohibited sales which would enable the tenant to say that the council had let the premises for the purpose of a general hardware merchant and ironmonger, ie sales which amounted to carrying on the business of a general hardware merchant and ironmonger. 345 Wills v Adams (1908) 25 TLR 85. In that case there was evidence that some drapers sold furs but this was not regarded as sufficient to bring furs clearly within the description of ‘drapery goods’. 346 [1951] WN 293. 347 Above. 348 (1876) 34 LT 774. See, also, Fitz v Iles [1893] 1 Ch 77 and Labone v Litherland UDC, above. 349 (1889) 43 ChD 343. 350 [1893] 1 Ch 77, CA.

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11.180  The construction of restrictive covenants convenience of their customers, to sell light refreshments consisting of cups of tea and coffee on the premises. The Court of Appeal, affirming North J, held that the defendants were carrying on the business of a coffee house keeper (in breach of a covenant not to use the premises as a coffee house) as well as that of a grocer. Similarly, in Buckle v Fredericks,351 the lessee of a theatre bought an adjoining piece of land which was subject to a covenant that ‘the trade of an inn keeper, victualler, or retailer of wine, spirits or beer’ should not be carried on there. He erected a building providing access to the theatre and also containing bars on each floor for selling wines, spirits and beer exclusively to patrons of the theatre. It was held by the Court of Appeal that he was carrying on the trade of a retailer of wine, spirits and beer. It would seem not unlikely, however, that the provision of bars in a theatre would be regarded as part and parcel of the business of a theatre in a case where the covenant related to the theatre premises as well as the bar premises. 11.180 In St Marylebone Property Ltd v Tesco Stores Ltd,352 a lease granted in the early 1950s restricted the user of premises to that of ‘grocers provisions wine spirit and beer merchants’. The premises had been used as a supermarket, and then underlet to a lessee (Mr Patel) who extended the business to include sale of newspapers and magazines, and later a video hire business. Hoffmann J said:353 ‘Construing the covenant requires one to ask whether Mr Patel can be said to be carrying on only the trade of grocer and provision merchant or some other composite trade, or differing trades in addition. This must be a matter of degree. For example, a grocer’s shop which sells a few electrical plugs and batteries might well be said to be a shop which is a grocer but happens conveniently to sell some electrical goods rather than a shop which carries on both grocery and electrical trades. On the other hand, if non-grocery products are sold in sufficient quantity they will constitute the carrying on of a separate trade, and even if a wide variety of non-grocery items are sold in quantities each of which would not in themselves amount to a separate trade, the cumulative effect may be to make it inappropriate to describe the premises as a grocery and provision merchant rather than a general store or some other composite description.’354 On Mr Patel’s evidence, one out of four units in the shop was used for newspapers and other non-grocery goods, and they accounted for about half the turnover of the shop. Hoffmann J concluded (at p 42J-42K): ‘On that evidence I do not think that it is possible to say that the premises are being used only for the purposes of a grocery and provision merchant. One might say that, in addition, Mr Patel was, at the very least, also carrying on the business of a newsagent and a hirer of video films, or one might say that the business was that of a general store. I do not think it matters which, because in either case it goes further than the covenant allows.’

351 (1890) 44 ChD 244. Cf Elliott v Safeway Stores plc [1995] 1 WLR 1396. 352 [1988] 2 EGLR 40. 353 As quoted by Carnwath LJ in Williams v Kiley (t/a CK Supermarkets Ltd) [2003] L&TR 20 (below). 354 [1988] 2 EGLR 40, at pp 42F–42G.

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Construction of common phrases 11.185 11.181 In Williams v Kiley (t/a CK Supermarkets Ltd),355 covenants in a 99-year lease, entered into in the early 1960s provided that: ‘The Lessee hereby covenants with the lessor as follows: … (14)(b) to carry on or permit or suffer to be carried on at all times during the term hereby granted in or upon the said shop premises situate on the ground floor of the demised premises the trade or business of a grocery and general stores (which term shall not include a footwear repair service and collection centre Dry Cleaning and Laundry service Ladies Hairdressing Meat Purveyor Pharmaceutical Chemist or Newsagents Sugar Confectioner Tobacconist or Post Office) … (c) not to use or permit the use of the demised premises or any other part thereof for any other purpose than aforesaid’. 11.182 The claimants contended the defendant was in breach of the covenant in running the premises as a mini-supermarket selling confectionary and tobacco amongst other items. The High Court found the defendant was in breach. The Court of Appeal held that: ‘[T]he judge applied the correct test. He considered the character of use as a general store, as understood in 1963, and concluded that the defendant was not precluded from selling some confectionery and tobacco, so long as it was not sufficient in scale to amount to a distinct trade or business. If it crossed that line, then the fact that the shop might still qualify as a ‘general store’, in the sense understood in the St Marylebone case, would not help the defendant, in view of the specific prohibition of the trades of tobacconist or confectioner.’ 11.183 Subsequently, in another appeal in the case,356 the Court of Appeal held  that the earlier decision of the Court of Appeal showed that the line the defendant could not cross was related to the character of the business of a general store as understood in November 1963. That character permitted sales of tobacco to some extent ancillary to the trade of a general store, but not to such an extent as to amount to a separate trade. It held that where to draw that line was essentially a question of fact. The parties had asked the judge to insert into his order some guidance as to the permitted sales of confectionary and tobacco products by reference to display and he provided in the order for: (i) a one-metre wide by two-metre high confectionery display stand; and (ii) a ten-brand tobacco vending machine, though not limited to ten brands. This was upheld by the Court of Appeal on the basis that such guidance was essentially a question of fact and a matter for the judge on the evidence. 11.184 More specific treatment of certain trades and businesses will be found under their specific headings.

Use as a business 11.185 Where use of the land to carry on a business, or a particular type of business, is prohibited, the use of that land as a means of vehicular and pedestrian access to other land on which the business is actually conducted does 355 [2003] 1 P&CR D38, [2003] L&TR 20. 356 Williams v Kiley (t/a CK Supermarkets Ltd) (No 2) [2004] EWCA Civ 870.

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11.186  The construction of restrictive covenants not infringe the covenant not to ‘carry on’ that business which affects only the former land: Elliott v Safeway Stores plc.357 In that case, the covenant was not to carry on upon the land conveyed any business comprising the sale and purchase of fuel and lubricants for mechanically propelled vehicles, and the land was used for access to other land, not subject to the covenant, on which the defendant intended to erect and run a petrol filling station. 11.186 Similarly, in GLN (Copenhagen) Southern Ltd v ABC Cinemas Ltd,358 restrictive covenants prohibiting land from being used as a cinema were held not to prevent that land from being used for access to a mixed retail and cinema development on land that adjoined it. 11.187 Where, however, a covenant provides that use of the land is to be, for example, ‘a private residence only’, use as an access road to shops or to a number of dwellings, will not be use of that land for a private residence only but as a means of access to shops or a number of other dwellings, so that there will be a breach of the covenant: Marshall v Jarvis Homes Ltd.359 11.188 Where the use of the land ‘for the purpose of food retailing’ is prohibited, even though the land forms part of a large site which includes a food superstore where the land itself is only used for landscaping, to enhance the attraction of the food superstore located on another part of the site where there is no such restriction, the Court of Appeal has held that that does not infringe the covenant: Co-operative Retail Services Ltd v Tesco Stores Ltd.360 In that case, the Court held that the question was not whether the land was an integral part of a single site which contained a food store in which the business of food retailing was carried on, nor whether the land formed part of a single site for which planning permission was granted for use for the purpose of food retailing. It is whether the burdened land itself is used for the purpose of food retailing in the sense of food retailing actually being carried on upon that particular land, as opposed to elsewhere on the wider site of which it formed part. The Court took a narrow view and saw the purpose of that land as being landscaped open space for amenity purposes, albeit that it formed part of a wider site.

Dwellinghouse Meaning of ‘dwellinghouse’ and its composites 11.189 The Oxford English Dictionary defines a house as ‘A building for human habitation, typically and historically one that is the ordinary place of residence of a family’. In the absence of a context indicating the contrary, this will include a building containing several residential flats. 11.190 In Kimber v Admans,361 a block of residential flats having a single front entrance was regarded as one ‘house’ for the purposes of a covenant not to erect more than a specified number of houses. 357 358 359 360 361

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[1995] 1 WLR 1396. [2004] EWCA Civ 1279. [2004] EWCA Civ 839 (use as a road to access ten new dwellings). (1998) 76 P&CR 328. [1900] 1 Ch 412, CA.

Construction of common phrases 11.194 11.191 However, ‘one dwelling’ would seem to be different as a matter of language, and to convey that it is to be used as one living unit only, so that it would not include one block containing several dwellings (even if that was regarded as a ‘house’). 11.192 In Rogers v Hosegood,362 a covenant prevented the erection of more than one messuage or dwellinghouse and there was also a covenant that such messuage should be adapted and used as and for a private residence only. The Court of Appeal held that the covenant would be broken by the erection of a block of flats, stating:363 ‘We think that residential flats involved in the use of a public entrance and staircase do not answer the description of private residences (inaudible) by the words used. The covenant must, we think, be construed in an ordinary or popular and not in a legal or technical sense and we do not think that residential flats, though for many purposes separate dwellinghouses, come within a popular description of the class of building to which it was intended to permit.’ 11.193 Rogers v Hosegood was followed by the High Court in Cala Homes (South) Ltd v Carver.364 In that case, there was a sale of building land and a covenant that ‘No trade or manufacture shall be carried on upon any plot but each building shall be for and be used as a private dwelling house only’. The claimant sought a declaration that the construction and use of a block of flats on two of the plots would not be a breach of the covenant. It contended that a house was simply a building that was used for habitation and that a block of flats is such a building. 11.194 The court distinguished Kimber v Admans on the basis there was no user provision in that case, unlike in the case before it and in Rogers v Hosegood. The court followed Rogers v Hosegood and held the covenant would be broken by the erection of a block of flats. In particular, it was said: (1) the words being used in the particular clause needed to be construed, and a meaning had to be given to the combination of the words ‘detached houses’. A block of flats is unattached, and no one ever would describe a block of flats as a detached block of flats. The descriptions used of houses were terraced houses, semi-detached houses and detached houses, and they mean single dwellinghouses as distinct from blocks of flats. Everyone would in ordinary language know a block of flats not to be a detached house; (2) the use of the word ‘private’ linked to the word dwellinghouse was intended to mean that it related to the privacy of a private house and part of the essence of a block of flats such as this is that there are communal parts, such as hallways and staircases, etc which are not private but necessarily shared; (3) unlike in Crest Nicholson Residential (South) v McAllister365 the use of the indefinite article ‘a’ in the context in which it was used in this particular conveyance, also connoted a single private dwellinghouse;

362 363 364 365

[1900] 2 Ch 388. Ibid, at p 409. [2003] EWHC 1995 (Ch). [2004] 1 WLR 2409.

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11.195  The construction of restrictive covenants (4) the factual background also supported the conclusion that an ordinary detached house was what was permitted by the covenant, not a block of flats. It was held that a block of 12 flats would involve 12 dwellinghouses, which was not what was contemplated by the covenant. 11.195 In Magnhard Ltd v Earl of Cadogan,366 Lewison LJ (with whom the other members of the Court of Appeal agreed) said (at para 11): ‘The clear consensus of judicial opinion is that a purpose-built block of flats cannot reasonably be called “a house”’. In Coastal Partnerships Ltd v Beddy367 it was held that the word ‘house’ did not in  itself exclusively refer to a private residential dwelling with a single occupation. Expressions such as ‘private’, ‘dwellinghouse’ or ‘detached’ connoted a residence with single occupation,368 whereas in contrast their absence allows for a broader interpretation of the word ‘house’. The context is also important, as always in the construction of covenants, the object being to identify the parties’ intentions. Thus, in Beddy, a covenant ‘not to erect or permit to be erected … any building other than one single dwellinghouse’ had to be construed in the context of a conveyance where there was also a covenant preventing the carrying on of any trade or business whatsoever other than that of an hotel or furnished holiday flats’, which showed, or confirmed, it was not limited to one living unit. 11.196 The use of the word ‘private’ further rules out the use of a house as a boarding house for scholars attending a nearby school run by the owner of the house and the use by a public authority (eg the Department of Health) of a dwellinghouse for the accommodation of persons under its care.369 11.197 A covenant not to use or permit the property to be used for any purpose other than as a single private dwellinghouse precludes sub-letting: see Dobbs v Linford, and the cases referred to in it.370 However, such a covenant was held not to be broken by a letting to a group of four students, jointly and severally liable for the rent, with separate studybedrooms and sharing the rest of the accommodation, in Roberts v Howlett.371 11.198 In the context of the Leasehold Reform Act 1967, which, by section 2, applies in part to any building designed or adapted for living in and ‘reasonably called a house’ (notwithstanding that the building may be divided into flats or maisonettes so long as they are not themselves houses), the determinative factor was held by the Supreme Court in Hosebay Ltd v Day372 to be the use of

366 367 368 369 370

[2013] I WLR 24. [2007] EWHC 387 (Ch). See, also, Collins LJ in Rogers v Hosegood [1900] 2 Ch 388, at p 409. C & G Homes Ltd v Secretary of State for Health [1991] Ch 365. [1953] 1 QB 48. See also in relation to this the comments of Neuberger J in Crest Nicholson referred to at para 11.215 below. 371 [2002] 1 P&CR 19 ChD 234. The students were friends who held to form a genuine social unit by their occupation of the property, a period of occupation of a year was not transitory under modern conditions, and it amounted to the home of each of them even though they returned to their parental homes during university vacations. 372 [2012] 1 WLR 2884.

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Construction of common phrases 11.201 the building rather than its physical appearance, so that use of a building as a commercial self-catering hotel or as offices is outside the description.373 11.199 In the same context, Lord Scott of Foscote in the House of Lords in Malekshad v Howard de Walden Estates Ltd said:374 ‘If a building is not designed or adapted for living in or if it cannot reasonably be called a “house”, the building cannot, in my opinion, be a “house” for 1967 Act purposes. Nor can a dwelling which is not a building at all be a “house”, for example, a caravan (cf R v Rent Officer of Nottinghamshire Registration Area Ex p Allen [1985] 2 EGLR 153) or a houseboat (cf Chelsea Yacht and Boat Co Ltd v Pope [2000] 1 WLR 1941).’

‘Maisonettes’ and ‘semi-detached dwellinghouses’ 11.200 In Ilford Park Estates Ltd v Jacobs,375 a building containing two maisonettes, that is two separate units of accommodation on different floors each having their own separate external front door and access without any internal communication or common staircase, was held to constitute two houses within the meaning of a covenant not to erect more than one house on the site. Swinfen Eady J distinguished the case from that in Kimber v Admans on the ground that in that case there was internal communication between the flats by means of an internal common staircase and added:376 ‘In the present case there is no internal communication whatever. It is merely a case of one house superimposed  on another from which it is divided horizontally, while in the ordinary case of semi-detached houses the division is vertical.’ It follows that semi-detached and terrace house are separate and distinct houses for the purposes of a covenant restricting the number, size or value of houses permitted to be erected.377 11.201 The word ‘private’ preceding ‘dwellinghouse’ or ‘residence’ prima facie rules out a block of flats since ‘a public entrance and staircase, do not answer the description of private residences’.378 This may be so even where the covenant merely confines the buildings which may be erected to ‘private dwellinghouse’ or ‘private residences’ (ie the plural) although it is a matter of construction in the light of the overall tenor of the covenant.379 It further rules out the use of a house as a boarding house for scholars attending a nearby school run by the owner of the house380 and the use by a public authority

373 For a review of other relevant cases dealing with the meaning of a ‘dwellinghouse’ under the Act, see Grosvenor (Mayfair) Estate v Merix International Ventures Ltd [2017] EWCA Civ 190. The Court of Appeal declined to interfere with the finding of the judge on what is essentially a factual issue, where he had taken full account of the guidance to be derived from precedent. 374 [2003] 1 AC 1013, at 1036D-1036E. 375 [1903] 2 Ch 522. 376 Ibid, at p 526. 377 See, also, Grant v Langston [1900] AC 383, HL (maisonettes), and Snow v Whitehead (1884) 51 LT 253 (two semi-detached houses, together worth more than £400 but individually worth less than that figure, which were afterwards provided with internal communication on the ground floor, held to remain sustantially two houses and not one within the meaning of a covenant that the value of each house should be not less than £400). 378 Per Collins LJ delivering the judgment of the Court of Appeal in Rogers v Hosegood [1900] 2 Ch 388, at p 409. 379 See the remarks of Collins LJ in Rogers v Hosegood, above, at 409. 380 Hobson v Tulloch [1898] 1 Ch 424.

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11.202  The construction of restrictive covenants (eg the Department of Health) of a dwellinghouse for the accommodation of persons under its care.381

Not to erect any building on the land except a private dwellinghouse (or not to use any building as such) 11.202 In the case of pre-1926 covenants, it may not have been necessary to add the word ‘single’ in order to make it clear that a reference to ‘a private dwellinghouse’ meant a private dwellinghouse to be occupied by one household382 (though the word emphasises the position). 11.203 In the case of post-1925 covenants, section 61(c) of the Law of Property  Act 1925, however, provides that in all instruments executed, made or coming into operation after 1925, unless the context otherwise requires,383 the singular includes the plural and vice versa. Accordingly, the addition of the word ‘single’ to ‘private dwellinghouse’ serves to make it clear that a reference to ‘a  private dwellinghouse’ does not include the plural, thus excluding an argument to the contrary under the section. 11.204 A household is a single household if the persons comprising it occupy the dwellinghouse as a unity whether or not those persons are related to each other. In Wrotham Park Settled Estates v Naylor,384 a covenant in a 999-year lease of a farmhouse and outbuildings (one of which had been converted into a cottage) that ‘the premises shall be occupied and used only as a private dwellinghouse … for the sole occupation and use of the tenant and the family of the tenant’ was held not to be broken by the cottage being occupied by a couple who acted as caretakers and did some work in the house and grounds. In the course of his judgment, Hoffmann J referred to one of the primary definitions of ‘family’ in the Shorter Oxford English Dictionary, namely, ‘the body of persons who live in one house or under one head, including parents, children, servants, etc’. 11.205 Whether people ‘sharing’ a house will constitute one household would seem likely to depend upon such things as whether as between themselves, they simply contribute a fair share of the household expenses, rather than one of the members making a profit out of allowing the others to live there, whether they live together in the sense of sharing meals and the like, and the layout of the accommodation used. At one end of the spectrum would be a close family friend living as part of the family, sharing meals, watching television together, and having a bedroom like everyone else there, and sharing the bathroom, who would be living as part of the same household. At the other end would be a stranger brought in by an advertisement for a lodger, paying a set sum which provided a profit to the owner, having a bedsitting room with externally lockable bedroom door, and preparing and taking their own meals, which would be a business arrangement. 381 C & G Homes Ltd v Secretary of State for Health [1991] Ch 365. 382 See Berton v Alliance Economic Investment Co [1922] 1 KB 742 and Barton v Keeble [1928] Ch 517: ‘There are obvious reasons why a house occupied by two separate families cannot be accurately described as a single private dwellinghouse’, per Eve J at p 524; contra, Day v Waldron (1919) 120 LT 634. 383 Cf Re A Solicitors’ Arbitration [1962] 1 WLR 353. 384 (1990) 62 P&CR 233.

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Construction of common phrases 11.210 11.206 In Segal Securities Ltd v Thoseby385 there was a covenant, ‘to use the demised premises for the purpose of a private residence in the occupation of one household only’ and it was held it was a breach of it to take in a paying guest obtained via an advertisement, who did not share meals or live as part of the family.386 Sachs J made clear, however, that the mere taking in of a single paying guest who shares the family life so far as practicable, would not generally (subject to the context, the layout of the accommodation used, etc) be a breach of covenant to use a house as a private residence only, and that a true sharing between friends would not be a breach of a covenant to use premises as a private residence in the occupation of one household only. See, also, Roberts v Howlett in relation to student sharers.387 11.207 Similarly, where a specified part of the house is occupied by a parent or parents or by a married child and his spouse, whether a breach was thereby committed might depend upon whether the domestic living arrangements are pursued more or less independently rather than as a combined family unit and if so, whether any payment for the accommodation is made to the owner. 11.208 On the other hand, Thorn v Madden388 and Tendler v Sproule389 show that to regularly take in paying guests or ‘lodgers’ is – in the context of an agreement also containing a covenant not to use any part of the premises for business purposes – a breach of a covenant to use premises as a private residence only. 11.209 In Falgor Commercial SA v Alsabahia Inc390 the defendant company held a 999-year lease of a flat, by which it covenanted ‘Not to assign transfer underlet or part with possession of the flat … without the previous consent in writing of the [lessor] such consent not to be unreasonably withheld’, and ‘Not … to use or occupy the flat otherwise than as a single private residence in one occupation only …’. The defendant granted licences to visitors to reside in the flat (with the defendant providing furniture and daily cleaning) in return for payment. It was held the permitted user was the defendant company’s user as a private residence, which it might do by use of it for its own directors, staff or guests. However, it was not using it for such purposes, and Tender v Sproule was referred to. It was not residential user391 in the context of the covenant, but what was taking place was the business of providing serviced accommodation. Accordingly, there was a breach of the covenant which could be retrained by injunction (subject to arguments about waiver on the facts of the case). 11.210 In Caradon DC v Paton & Bussell,392 each of the two defendants owned a property which had been acquired from the council under right-to-buy provisions and which had been transferred subject to a covenant restricting its use to that of a private dwellinghouse. The defendants let the houses to tenants on short-term holiday lets during the summer months. Although Latham LJ 385 386 387 388 389 390 391 392

[1963] 1 QB 887. As in Thorn v Madden [1925] Ch 847. But see Segal Securities Ltd v Thoseby [1963] 1 QB 887. [2002] 1 P&CR 234 (see para 11.197 above). [1925] Ch 847 (Tomlin J). [1947] 1 All ER 193, CA. [1986] 1 EGLR 41, (1986) 18 HLR 123. ‘Much less [use] as a private residence’ (at p 126). (2001) 33 HLR 34.

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11.211  The construction of restrictive covenants acknowledged (at para 20) that the judgment of Nourse LJ in C & G Homes Ltd v Secretary of State for Health393 showed that a property could still be used as a private dwellinghouse without the owner occupying it himself, for example, where he lets it to another individual for use as his private dwellinghouse, he emphasised that it must be used as someone’s private dwellinghouse, which as a concept had to be considered in the context in which the covenant has been imposed. The Court of Appeal considered that the intention of the covenant was to protect the amenities of the neighbourhood and ensure the property remained part of the housing stock available for homes for people to live in. A commercial letting for holiday purposes was not use of the property as a private dwellinghouse within the meaning of the covenant in that case. In the latter part of his judgment,394 Latham LJ considered the question to be whether the occupation of tenants (in another’s commercially let premises) for holiday purposes could properly be regarded as being occupation ‘for the purposes of the use of the dwellinghouse as their home’, and Clarke LJ also said that ‘the concept of using a property as a private dwellinghouse involves the use of it at least in some way as a home’,395 which was not the position there. 11.211 It is important, however, to bear in mind the focus of the court on the intention of the parties at the time and that in that case the document containing the covenant was the transfer of a local authority house which was intended thereafter to provide housing for people in the area (rather than holiday lets), and also (though the court did not allude to it) that it was sold at discount as a home rather than as a commercial property. It should not be thought that the court was intending to lay down a general rule in all cases that in order to occupy as a private dwellinghouse it must be occupied as a home in the sense of necessarily being a person’s full-time residence or one to which they have some personal attachment or emotional tie, or which is not occupied by them under a commercial arrangement with the owner. 11.212 That this need not always be so was referred to by HH Judge Bridge sitting in the Upper Tribunal in Nemcova v Fairfield Rents Ltd.396 In that case, a long lease of a flat in Enfield contained a covenant not to use or permit the demised premises to be used for any purpose other than ‘as a private residence’. The leaseholder granted a series of very short-term lettings of the flat, having advertised it on the internet as available for such short-term lettings. Most of the lettings were for a few days only, and most were for business visitors working in London. The flat was let on short-term lettings of that kind for about 90 days a year. For much of the rest of the time the lessee lived in the flat herself. It was held that the use was in breach of the user covenant. In the course of his judgment, Judge Bridge pointed out, at para 47, that it was necessary to: ‘… apply the ordinary and natural meaning of the words used. The covenant refers explicitly to use “as a private residence”. It does not refer to the word “home”, nor does it require the occupier, in terms, to use the premises as his or her home. It is important to be extremely careful not to gloss the

393 394 395 396

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(1991) 23 HLR 145, at p 384G. At paras 35–36. At para 43. [2017] 1 P&CR 4.

Construction of common phrases 11.215 terms of the clause so as to impose a requirement that was not intended. It is necessary to take care in importing the concept of “home”, as the Court of Appeal did in Caradon. That concept may carry with it imputations of permanence, personal attachment, emotional ties or exclusivity. None of those are necessarily inferred by the words actually employed. The question to be asked is not whether the premises are being used as the occupier’s home but whether they are being used as a private residence.’ 11.213 Judge Bridge also pointed out (in para 50) that a property ‘may remain a “private residence” whether it is occupied by a tenant of the lessee who pays rent or by a friend of the lessee who is allowed to live there rent free as a philanthropic gesture’, and that, in an ordinary case at least, the reason the occupier is there is not decisive. However, he concluded (in para 53) that ‘in order for a property to be used as the occupier’s private residence, there must be a degree of permanence going beyond being there for a weekend or a few nights in the week’. 11.214 However, it may be that some qualification needs to be added to this – if, for example, the property was only occupied one or two days a month by someone who had it permanently available for his use as a residence, it is submitted  that this would not necessarily mean it was not in use as a private residence. Another way of looking at it may be that this would introduce a degree of permanence as Judge Bridge considered necessary, by way of being permanently available even though the number of days actual occupation was short. That may be contrasted with the use being made of a property by a person who uses it to make regular short lets to a number of different people who stay there for two or three days without having it permanently available to them at other times to the exclusion of others, and where the commercial nature of the arrangement with different users who are coming and going is part of what leads to the conclusion that it is not in reality being used solely as a private residence. This is supported by the fact that Judge Bridge’s comments in relation to the period of occupation were in the context of the need for ‘a connection between the occupier and the residence such that the occupier would think of it as his or her residence albeit not without limit of time’. It is considered that none of the facts can be considered in isolation and it is a question of the overall picture (including those such as exclusivity, the commercial nature of the arrangement and so on, as well as the length of occupation referred to in para 53 of the judgement), rather than any one element, such as the length of actual occupation, being decisive. 11.215 A covenant not to use a specified area of land ‘for any purpose other than that of a single private dwellinghouse’ was held by Neuberger J in Crest  Nicholson Residential (South) Ltd v Mc Allister397 to apply to the land taken as a unit so to prohibit any divided occupation of the land with more than one private dwellinghouse on the entirety of the land.398 However, all depends on the precise wording of the covenant and of the conveyance as a whole, and the context (which the judge went through in paras 15 to 20 of the judgment). 397 [2002] EWHC 243 (Civ) at first instance, at paras 14–31. 398 Though the first instance decision in the case was overturned on appeal, that turned on a different point (relating to annexation) and this part of the decision was not the subject of consideration by the Court of Appeal.

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11.216  The construction of restrictive covenants 11.216 In Briggs v McCusker,399 the covenant was against using ‘The said hereditaments or any part thereof or any buildings at any time thereon … otherwise as a strictly private or professional residence or as a private stable in connection with a residence’. The underlining has been added here to emphasise the point that, unlike the covenant in Crest Nicholson, it did not extend merely to the plot itself but to ‘any part thereof’, making it more understandable that the intention was to prevent anything other than a private or professional residence being constructed on each part, rather than to prohibit more than just one house on the transferred area of land as a whole. That is what was found there.400 In Wayne Martin v David Wilson Homes Ltd401 the covenant was ‘not to use or permit or suffer any buildings erected thereon or on any part thereof to be used for any other purpose than as a private dwellinghouse either with or without garages and other necessary outbuildings’. A preliminary issue was ordered to be determined as to ‘Whether the indefinite article “a private dwellinghouse” contained in the restrictive covenant … is to be construed as a limitation of number or whether the restriction is merely to be construed as to the manner of use’. The Court (through Buxton LJ) indicated that: ‘In approaching a construction question of this sort the court will be concerned with three aspects of the issues. The first two are to some extent intertwined. They are the literal wording of the clause, and the factual matrix in which it was formulated …The third aspect of the matter is any authority which binds or guides the court in matters of construction.’ Contrary to the view expressed by Neuberger J in Crest Nicholson (at first instance), the Court did not consider that the expression ‘a’ carried with it any necessary implication of singularity: ‘“A” is an article, not a number. When, as here, one is concerned with how any particular building shall be used, a natural way of expressing that is “use as a private dwellinghouse”’,402 and went on, ‘The expression “a private dwellinghouse” takes its nature from its context. It does not have any fixed connotation of singularity irrespective of whatever the context may indicate’.403 It was held that ‘the indefinite article “a private dwellinghouse” contained in the restrictive covenant … is merely a restriction as to the manner of use and is not a limitation of number of dwellings permitted upon the plot’.404 This was based on the wording of the clause in the context of other clauses in the  conveyance,405 and if the draftsman had wanted to say, ‘Build one dwellinghouse and one dwellinghouse only’, he would have needed to take at least the following steps. First, unless he was going to produce a draft that was extremely confusing, he should put that clause separately in the covenants

399 [1996] 2 EGLR 197. 400 By Judge Rich QC sitting as a High Court judge; see also the first instance decision in Crest Nicholson at para 25. Cf Re Enderick’s Conveyance [1973] 1 All ER 843, and see also para 29 of the first instance decision in Crest Nicholson. 401 [2004] EWCA Civ 1027. 402 See ibid, para 22. 403 Ibid, para 44. 404 See ibid, para 47. 405 See ibid, para 16.

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Construction of common phrases 11.219 from the user clauses. Second, he would have to refer to the erection of one dwellinghouse only, not to the use of buildings, extant or to be built. Third, he would not refer to the use of buildings in the plural. The Court pointed out that the covenant referred to ‘any part’ of the plot and to ‘any buildings’, which were indicia that Neuberger J in the Crest Nicholson case indicated would point away from the conclusion he reached on the clause that was before him in that case.406 In the judgment of Arden LJ, the other Court of Appeal judge in the Wayne Martin case, one point which carried particular weight was that the covenant in relation to the land was ‘not to use or permit or suffer any buildings erected thereon or on any part thereof to be used for any other purpose than as a private dwellinghouse …’. She said: ‘The words “or on any part thereof” indicate that the draftsman was clearly contemplating buildings on separate parts of the land. Logically the words mean that each building, on each part of the land, must not be used for any purpose other than the permitted purpose, and the permitted purpose is as a private dwellinghouse. It must follow, as it seems to me, from the reference to any part of the land, that it is permitted to have a dwellinghouse on each separate part of the land.’407 11.217 In contrast is the decision on the facts in Parsons v Thatchers Wood Residents Company Ltd.408 There a covenant prevented use of a property ‘for any purpose other than as a private dwellinghouse in single family occupation’. It was argued that the clause restricted usage of the property to private dwelling, but did not restrict the number of dwellings in which that usage was to be permitted at any one time. The court pointed out that the judges in the Wayne Martin case were simply making the point that the use of the indefinite article does not necessarily connote singularity, but that it all depends on the context. It was held that the instant covenant did limit the use of the land to that of a single dwellinghouse. In particular, the wording suggested that the draftsman had in mind the controlling of density, and the covenant was applicable to the whole of the property, which had to be in the occupation of a single family. The conclusion reached was supported by the factual matrix. 11.218 A covenant to use land ‘as a private residence only’ would be broken by the use of the land for a roadway to access a development site on other land (not affected by the covenant) or as a roadway for any purpose other than purely in  connection with the occupation of the burdened land as a private dwellinghouse: see Jarvis Homes Ltd v Marshall.409

The scope of ‘dwellinghouse’ covenants 11.219 Where land is sold with a view to (1) one or more dwellinghouses being constructed, (2) no buildings other than dwellinghouses being constructed and

406 407 408 409

Paragraph 46 of Wayne Martin. See ibid, paras 51–52. [2011] EWHC 4095 (Ch). [2004] EWCA Civ 839, at para 23.

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11.220  The construction of restrictive covenants (3) the buildings constructed being used only as dwellinghouses, then (subject to the limitations inherent in covenants) the intention may be realised without difficulty if express covenants are exacted covering all three obligations. But if one or more of these express covenants is missing, the question arises whether they will be implied from the other or others. In the absence of covenant (1), no positive covenant to construct will be implied out of either of the restrictive covenants (2) or (3). However, the question arises whether covenant (1) standing by itself will give rise to either or both covenants (2) and (3); whether covenant (2) standing by itself will give rise to covenant (3), and whether covenant (3) standing by itself will give rise to covenant (2).

(1)  A covenant to construct one or more dwellinghouses 11.220 In deciding whether such a covenant implies a restrictive covenant that no building other than a dwellinghouse is to be built, the following factors may be material. (a) if the construction of a building falling outside the description would not preclude the construction of a building of the specified description, then this would militate against the implication of a covenant against the construction of such other building.410 In Hawes v Scott,411 the question was whether a covenant not to erect ‘more than two dwellinghouses’ was a restriction purely on the number of dwellinghouses or whether it was a restriction on any building except two dwellinghouses. By a majority (AL Smith LJ dissenting) the Court of Appeal took the former view with the result (which would not, otherwise have ensued) that the covenant did not prevent the construction of a high wall to secure privacy and prevent the acquisition of an easement of light to the window of adjoining premises. Clearly, this result would have been the same had the covenant been a positive one to construct two dwellinghouses. Conversely if the two types of buildings could not both be built, a restrictive covenant confining construction to the specified type of building would be implied;412 (b) whether there is a context pointing to an intention that only buildings fitting into the character of the neighbourhood should be erected. In Hawes v Scott,413 Lindley LJ, who was one of the majority deciding the opposite, observed that ‘looking at the object of the restriction, you might be able to find that nothing inconsistent with the residential character of the neighbourhood should be erected’; (c) whether the context discloses a special reason for controlling the number of buildings of the specified type which would have no application to other buildings.

410 Cf Russell v Baber (1870) 18 WR 1021. 411 (1896) 40 Sol Jo 373, CA. 412 See Goolden v Anstee (1868) 18 LT 898. 413 Above.

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Construction of common phrases 11.224

(2) A covenant that no buildings other than dwellinghouses are to be built 11.221 Whether such a covenant is express, or implied from the existence of a positive covenant to build dwellinghouses, the question is whether it is to be implied that a dwellinghouse, once erected, can only be used as a dwellinghouse. Such a result might be arrived at either (i) as a matter of construction of the word ‘built’, or (ii) on the basis that in order to give effect to the paramount intention of the covenant, a restrictive covenant as to user must be implied. 11.222 As to (i), in Webb v Fagotti Bros414 the Court of Appeal adopted the first (construction) approach.415 There, on the question whether a new building consisting of a restaurant constituted a breach of covenant that no beerhouse or building for the sale of excisable liquor should be built, the Court of Appeal (upholding the decision of North J) held that although the restaurant when originally built was not licensed to sell wines and spirits (and so initially complied with the covenant) upon its becoming, some five months later, a licensed restaurant, a breach thereupon took place. In the course of his judgment, Chitty LJ said: ‘You must look to the user of the house before you can say that it is or is not a beerhouse, and before declaring that the covenant has been infringed.’ The essence of the judgments of both Lindley MR and Chitty LJ (with whose judgments Vaughan Williams agreed416) was that the words ‘shall be built upon’ meant ‘shall be upon’, Lindley MR adding: ‘I do not throw over altogether the language of the covenant. To put a building on the land which is used for the sale of wines and spirits absolutely defeats the covenant’. 11.223 This decision appears on the face of it at variance with the remarks of Stirling J in Holford v Acton UDC 417 who, in the context of a covenant to erect a shop and dwellinghouse of a given minimum value, said (obiter): ‘There is nothing, as it seems to me, to prevent a person who bought all the lots from erecting in the first instance buildings which were shops and dwellinghouses, and afterwards throwing them into one by alterations of the party-walls between them, or from using the single building so formed otherwise than as a shop or dwellinghouse.’ In Reid v Bickerstaff 418 Joyce J, citing the Holford case, similarly expressed the view (purely as an aside) that ‘Unfortunately a covenant not to erect anything but private houses does not preclude the subsequent conversion of such dwellinghouses into shops’, but the Court of Appeal’s decision in the Fagotti case was not referred to. 11.224 However, the question in each case is one of the construction. As has been emphasised many times, any covenant falls to be interpreted on its precise

414 (1898) 79 LT 683, at p 684. For the full facts, see above at para 11.156. 415 As did the court (with a similar result) in the Irish case of Bray v Fogarty (1870) 4 IR Eq 544. 416 In the course of argument, counsel for the appellants in Webb v Fagotti Bros argued that there had been no breach since the appellants had not built a building of the prohibited type and the restaurant was not used for the sale of excisable liquors until some time after it was built. But Vaughan Williams LJ said; ‘I think that if you construe the word “built” as the appellants ask us to construe it, you give that word no practical meaning at all’. 417 [1898] 2 Ch 240, at p 248. 418 [1909] 2 Ch 305, at p 309 (reversed on appeal, but no reference being made to the point now being considered).

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11.225  The construction of restrictive covenants wording, and in the context of it, and it is a matter of ascertaining the intention of the parties at the time. It is to be noted in relation to this that the covenant in Webb was that no beerhouse  or building for the sale of excisable liquor should be built. It was not limited to a prohibition on a beerhouse or public house, but was a prohibition on any building for the sale of liquor of any sort. No special form of building would have been likely to have been necessary for any building to be a building for the sale of liquor – it could be built as a restaurant without anything special being necessary in terms of the building for it be used for the service of meals with or without the sale of liquor (or built as a shop in which no special features would be required in terms of the building itself for any or all of the sales to be of bottled liquor, for example, any more than other goods). It can be understood therefore that what the covenant was intended to do was to prohibit a building that was actually used for purposes involving the sale of liquor. 11.225 On the other hand, in Holford v Acton and Reid v Bickerstaff the prohibition was on the construction of a building as a dwellinghouse, which would have required particular features to be provided, such as a bathroom (with necessary plumbing), kitchen/scullery (with necessary plumbing and provision for a range and/or appliances), sitting or drawing room (with a hearth), and probably, in the age in which the covenants were entered into, a dining room (with hearth), as well as bedrooms. The covenants in those cases can therefore more readily be understood to be directed against the original construction of the building without being affected by its actual mode of use thereafter. Accordingly, in the absence of something preventing a change thereafter, in terms of subsequent building work or user, it can be understood how the intention of the original parties could be understood to be simply to prevent the initial construction of a dwellinghouse. In other words, it was not, as in Webb v Fagotti Bros, a building neutral in terms of construction where sense could only be made of what the covenant was intended to prevent by looking at the subsequent use of it (for the sale of liquor as well as other items). 11.226 In relation to (ii) above (prohibition of user by implication), that was considered by the Court of Appeal in Wright v Berry419 where certain plots were marked as ‘residential plots’ and it was stipulated that ‘no building of any kind other than a detached or semi-detached house with appropriate offices  … to be appurtenant thereto and occupied therewith shall be erected on any plot’. After  houses which complied with the above stipulation had been erected, the question was whether they could be occupied otherwise than as private residences. The Court of Appeal held that there was nothing to show that the houses should be used as private dwellinghouses and that no such restriction ought to be implied. There was no reason why it should be implied, as houses were permitted, with no user restriction to that of a private house and restriction even of user to that of a house does not generally restrict the use only to a private house as such (see above). As to implied terms in restrictive covenants generally, see 11.22 et seq above.

419 (1903) 19 TLR 259.

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Construction of common phrases 11.229

(3) A covenant that no building shall be used other than as a dwellinghouse 11.227 Where such a covenant stands alone, then no covenant will be implied against the erection of a building seemingly designed to be used for some other purpose.420 In Baxter v Four Oaks Properties Ltd,421 it was assumed by the plaintiff and by Cross J that the erection of a block of flats did not itself amount to a breach of covenant that no building should be ‘used … otherwise than as a private residence’.422 11.228 Ancillary buildings and uses which are commonly associated with dwellinghouses will usually fall within the meaning of a dwellinghouse or use as a dwellinghouse. Thus, the erection (in pre-motoring days) of a stable or (by  analogy) a garage for use in connection with a dwellinghouse would not infringe a covenant that no buildings should be erected other than private dwellinghouses and that no part of the land should be used for any purpose other than as gardens to such dwellinghouses.423 Similarly, the construction of a building to enclose an existing swimming pool will not infringe a covenant that ‘no building other than private dwellinghouses shall be erected’.424 Further, the erection of a stable with a bedroom over it in such a position that it would still be possible to build a house of the required value did not infringe a covenant that only a private house of a specified minimum value should be erected.425 A garden wall of appropriate height does not infringe a covenant that no buildings except dwellinghouses should be erected.426

What amounts to a breach 11.229 A number of instances of breach have already been referred to under the headings of ‘building’ and ‘meaning of “dwellinghouse”’. The erection of a corrugated iron building as an art studio not confined to domestic use has been held to be a breach of a covenant not to erect any building other than a private dwellinghouse427 and the construction of a vinery having a sloping roof leaning on a garden wall raised to a height of eleven feet has been held to infringe a covenant that no buildings except dwellinghouses should be erected.428 Further, a restriction confining use to that of a private dwellinghouse will exclude the carrying on of any kind of business thereon, at any rate where the business

420 See Worsley v Swann (1882) 51 LJ Ch 576; Ramuz v Leigh-on-Sea Conservative and Unionist Club Ltd (1915) 31 TLR 174. Quaere, whether this would hold good if the building were of a type which could never lend itself to use as a dwelling house. 421 [1965] Ch 816, at p 829. 422 However, see Rogers v Hosegood [1900] 2 Ch 388; Cala Homes (South) Ltd v Carver [2003] EWHC 1995 (Ch); Coastal Partnerships Ltd v Beddy [2007] EWHC 387 (Ch), and the other cases referred to at para 11.192 et seq above. 423 Blake v Marriage (1893) 9 TLR 569. 424 Harlow v Hartog (1977) 245 Estates Gazette 140. 425 Russell v Baber (1870) 18 WR 1021. 426 Bowes v Law (1870) LR 9 Eq 636. But it is otherwise if the height of the wall is excessive, eg, 15 feet: Nussey v Provincial Billposting Co [1909] 1 Ch 734, CA 427 Patman v Harland (1881) 17 ChD 353. 428 Bowes v Law (1870) LR 9 Eq 636.

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11.230  The construction of restrictive covenants activity goes beyond what is incidental to use as a private dwellinghouse.429 Thus, use as a school,430 a charitable institution,431 a boarding house for pupils at a near-by school,432 a hospital,433 a hotel,434 a lodging house,435 a private boarding house,436 a guest house,437 have all been treated as infringing such a covenant. Holding a public auction in a house of the furniture belonging to the house, does not infringe a covenant requiring the house to be used as ‘a private house’.438

‘Gardens’ or ‘pleasure grounds’ 11.230 In Re Ellenborough Park439 a conveyance in 1864 of plots of land on a building estate each included an express grant of easements for ‘the full enjoyment of the pleasure ground set out and made’ in front of the plot conveyed. In the Court of Appeal, Lord Evershed MR considered the nature of the permitted use, at p 168, and said as follows: ‘The enjoyment contemplated was the enjoyment of the vendors’ ornamental garden in its physical state as such – the right, that is to say, of walking on or over those parts provided for such purpose, that is, pathways and (subject to restrictions in the ordinary course in the interest of the grass) the lawns; to rest in or upon the seats or other places provided; and, if certain parts were set apart for particular recreations such as tennis or bowls, to use those parts for those purposes, subject again, in the ordinary course, to the provisions made for their regulation; but not to trample at will all over the park, to cut or pluck the flowers or shrubs, or to interfere in the laying out or upkeep of the park. Such use or enjoyment is, we think, a common and clearly understood conception, analogous to the use and enjoyment conferred upon members of the public, when they are open to the public, of parks or gardens such as St. James’s Park, Kew Gardens or the Gardens of Lincoln’s Inn Fields.’ 11.231 In Re Land at Sandy Lane, Dee Banks, Chester the Upper Tribunal, through the Deputy President, Martin Rodger QC, said,440 ‘Although the expression is antique, the concept of a pleasure ground is readily understood. Ordinarily it is a public park or public garden where people can go to derive 429 In the landlord and tenant case of Barton v Keeble [1928] Ch 517, one of the covenants limited user to ‘a private dwellinghouse wherein no business is carried on’ and Eve J considered that the latter words added stringency to the former. With the advent of modern electronic forms of communication and the increasing practice of working from home, it may well be that business conducted via telephone lines or radio waves or at a dinner party would be consistent with use as a private dwellinghouse although it might infringe an express covenant that no business should be carried on; see Doe d MacKenzie v Baylis (1851) 17 LTOS 172. 430 Johnstone v Hall (1856) 2 K&J 414; Wickenden v Webster (1856) 6 E&B 387. 431 German v Chapman (1877) 7 ChD 271; and see Rolls v Miller (1884) 27 ChD 71. 432 Hobson v Tulloch [1898] 1 Ch 424. 433 Portman v Home Hospital Association (1879) 27 ChD 81n; Frost v King Edward VII Welsh National Memorial Association for the Prevention Treatment and Abolition of Tuberculosis [1918] 2 Ch 180. 434 Spicer v Martin (1888) 14 App Cas 12. 435 Tompkins v Rogers [1921] 2 KB 94. 436 Thorn v Madden [1925] Ch 847. 437 Chatsworth Estates Co v Fewell [1931] 1 Ch 224. 438 Reeves v Cattell (1876) 24 WR 485. 439 [1956] Ch 131. 440 [2016] UKUT 457 (LC), at para 45.

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Construction of common phrases 11.235 pleasure from their surroundings, or from facilities provided there for recreation’. In that case land was partitioned into lots by an 1896 deed which provided that the lots should only be used as gardens or pleasure grounds. Although sold for private occupation, the lots were adjacent to a river, and the Tribunal considered that it was clearly contemplated that the individual lots might be used in connection with boating. It may have been thought that to restrict the permitted use of the land to gardens alone would be too narrow to encompass all of the leisure activities which the covenantors might wish to engage in. Against that background the Tribunal considered that the use of the riverside lots for launching boats was not prohibited by the covenant prohibiting use otherwise than as gardens or pleasure grounds. The suggestion there was a long-standing breach of the covenant by such use in the past (prayed in aid of an application for modification of the covenant to allow other uses) was therefore rejected.

‘Goods’ 11.231A Depending on the context, a motor car can constitute ‘goods’: see Spring House (Freehold) Ltd v Mount Cook Land Ltd [2001] EWCA Civ 1833.

‘Hotel’ 11.232 A hotel ‘always imports a house where travellers are taken in to lodge, and a licensed hotel is licensed for the sale inter alia of beer’.441 In this respect it shares the characteristics of an inn, but may be on a much grander scale and level. 11.233 In Whatman v Gibson,442 an injunction was granted to restrain the defendant from using his house as a family hotel in breach of a covenant not to carry on the business of an innkeeper. Although a licensed hotel shares with a public house and a beershop the activity of selling liquors retail, provided such sales are incidental to the business of a hotelier and do not amount to a separate business for non-residents, it would seem that such a hotel would not infringe a covenant against use as a public-house or beershop.443

‘House’ 11.234 See ‘Dwellinghouse’ at para 11.189 above.

Not to let for specified purposes 11.235 Whether a covenant not to let premises for particular purposes is a restrictive covenant444 or not depends upon whether it imposes any obligation on 441 Per Vaughan Williams LJ in Formby v Barker [1903] 2 Ch 539, at p 548. 442 (1838) 9 Sim 196. 443 Duke of Devonshire v Simmons (1894) 11 TLR 52. This was a case of a ‘private hotel’ where the refreshment provided was exclusively for the use of residents. But it is thought that it would have the wider application stated above. See ‘Overlap between two businesses’, above at para 11.174 and Elliston v Reacher [1908] 2 Ch 374, per Parker J at p 394. 444 In the technical sense: see above at para 1.11 et seq.

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11.236  The construction of restrictive covenants the covenantor not to use the premises for those purposes. If a building scheme exists, such an obligation on the part of the vendor will be readily implied.445 In other cases, it is a question of the true construction of the covenant. In Jay v Richardson446 a covenant by a lessor with a lessee not to let any house for the erection of a hotel within a quarter of a mile was construed as a covenant that no such property should be used for the erection of a hotel so that a subsequent occupier was bound. But this appears to be an isolated case.447 In Ashby v Wilson448 and Brigg v Thornton449 a similar type of covenant was held not to import a covenant by the lessor not to use the premises for the specified purpose.

Not to use as/for the purposes of 11.236 Where the covenant is not to use of the land ‘for the purpose of food retailing’, even though the land forms part of a large site which includes a food superstore where the land itself is only used for landscaping, to enhance the attraction of the food superstore located on another part of the site where there is no such restriction, the Court of Appeal has held that does not infringe the covenant: Co-operative Retail Services Ltd v Tesco Stores Ltd.450 11.237 It would be otherwise if, the covenant was, for example, not to use the land other than as a garden, in which case using it to build a roadway to access other development would be a breach (as in Jaggard v Sawyer451). Likewise, if the covenant is not to use the land other than as a private dwellinghouse (Jarvis Homes Ltd v Marshall452). See also ‘Use as a business’, at para 11.185 above. In relation to ancillary uses, see ‘Ancillary’ at para 11.123 above.

‘Nuisance’ 11.238 See ‘Annoyance’ at para 11.126 above.

Offensive trade or business 11.239 As in the case of ‘nuisance’ and ‘annoyance’, the answer to the question what is ‘offensive’ will inevitably vary according to the circumstances, including the type of property and the character of the neighbourhood.453

445 Above at para 8.22(3). 446 (1862) 30 Beav 563. 447 For a consideration of other negative covenants which are not restrictive covenants, see Chapter 25. 448 [1900] 1 Ch 66. 449 [1904] 1 Ch 386. 450 (1998) 76 P&CR 328. 451 [1995] 1 WLR 269. 452 [2004] EWCA Civ 839. 453 See Gutteridge v Munyard (1834) 7 C&P 129; Sturges v Bridgman (1879) 11 ChD 852, at p 865.

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Construction of common phrases 11.241 In Duke of Devonshire v Brookshaw,454 a fried fish shop in a high-class residential area was held to be an offensive trade, although it would not necessarily have been so in a non-residential location or in a different neighbourhood. Thus, in the particular circumstances in Cleaver v Bacon,455 the business of a butcher which included the slaughtering of beasts on the premises was not an ‘offensive, noisy, or noisome’ trade, although it could readily be so in other circumstances – or in a covenant of more recent date. Other trades or businesses which have been held to be actually or potentially offensive include those of a ‘wild beast show’ consisting of a display of lions in a house in Edgware Road London,456 a private lunatic asylum,457 a private hospital,458 a tannery459 and bill-posting.460 Trades and businesses which have been held not, in the particular circumstances, to be offensive include those of a coachbuilder,461 a laundry,462 a licensed victualler,463 a lucifer matches warehouser,464 a brick-burner,465 a wellmanaged children’s hospital for tubercular surgery in a residential area466 and a mock auction.467

‘Permit or suffer’ 11.240 Covenants not to permit or suffer a use extend the personal liability of the covenantor in respect of a use instituted by persons over whom the covenantor has legal control.468 Subject to any contrary intention shown by the wording of the covenant, a covenant ‘not to permit’ something to be done, carries with it an obligation on the covenantor himself not to do that thing: see Oceanic Village Ltd v United Attractions Ltd.469

Private dwellinghouse or residence 11.241 See ‘Dwellinghouse’ at para 11.189 above.

454 455 456 457

(1899) 81 LT 83 (Kekewich J). (1887) 4 TLR 27; see, also, Rapley v Smart (1893) 10 TLR 174. Hall v Ewin (1887) 37 ChD 74. Doe d Wetherell v Bird (1834) 2 Ad & El 161, although it did not amount to an ‘offensive trade’ since it did not involve buying and selling. 458 In Dublin, Earl of Pembroke v Warren [1896] 1 IR 76. 459 Reeves v Greenwich Tanning Co Ltd (1864) 2 Hem & M 54. 460 Nussey v Provincial BilI Posting Co [1909] 1 Ch 734. 461 Bonnen v Sadler (1808) 14 Ves 526, per Lord Eldon at p 527. 462 Knight v Simmonds [1896] 1 Ch 653, at p 661; affd [1896] 2 Ch 294. 463 Jones v Thorne (1823) 1 B&C 715. 464 Hickman v Isaacs (1861) 4 LT 285. 465 Cleeve v Mahany (1861) 9 WR 882. 466 Frost v King Edward VII Welsh National Memorial Association for the Prevention Treatment and Abolition of Tuberculosis [1918] 2 Ch 180. An appeal was compromised, 35 TLR 138. 467 Moses v Taylor (1862) 11 WR 81. 468 See Tophams Ltd v Earl of Sefton [1967] 1 AC 50; Berton v Alliance Economic Investment Co Ltd [1922] 1 KB 742; Hall v Ewin (1887) 37 ChD 74. 469 [2000] Ch 234, at p 240B-240C.

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11.242  The construction of restrictive covenants

‘Private occupation only’ 11.242 In Re Land at Sandy Lane, Dee Banks, Chester470 (above), the covenant provided that land should be used ‘for private occupation only’ as gardens or pleasure grounds. The University of Chester proposed to use the land to erect a large boathouse. The Upper Tribunal (through Deputy President Martin Rodger QC) stated that it was: ‘… satisfied that the proposed use cannot be described as “private occupation”. The University’s facilities will not be made available to the general public without distinction, but will be used only by its members and those with whom it has a close connection through its Academies Trust or by special invitation. The University will therefore control access to the new boathouse but, nevertheless, the size and fluctuating composition of the group to whom access will potentially be available is inconsistent with the concept of private occupation. This is a question of degree and there may not always have been a breach; the argument for regarding as private the original occupation of the land as a site from which the University’s staff would deliver courses of instruction to its own students as part of its programme of physical education seems to us to be stronger. For the future, however, we regard the proposed use as too intensive and as involving too many individuals with more remote connections to the University to amount to private occupation of the land.’ The Tribunal added that it had been referred by counsel to a number of authorities on the meaning of the expression ‘private dwellinghouse’, but did not find these of assistance.

‘Public house’ 11.243 A covenant not to use a house as a public house for the sale of beer is not infringed by the use of the house as an off-licence for the sale of beer for consumption off the premises.471 Although a public house is a place where beer and other liquor is sold retail, it is not a ‘shop’ and therefore does not infringe a covenant not to use premises as a beershop.472 Equally, a public house would not be a shop for the purposes of an estate plan referred to in a conveyance which permitted ‘shops’ on one part of what was otherwise to be a residential estate.473

‘Residential flats’ 11.244 In Walker v Kenley,474 an overage clause provided that a certain sum was provided to be due to the vendors if the buyer obtained planning permission to develop the property as ‘residential flats’. Planning permission was obtained by the buyer for development as holiday flats. Mr Philip Sales QC, as he then was, sitting as a deputy High Court judge held that the term ‘residential flats’

470 [2016] UKUT 457 (LC). 471 Pease v Coats (1866) LR 2 Eq 688. 472 Hall v Box (1870) 18 WR 820. 473 See Coombs v Cook (1883) Cab & El 75. 474 [2008] EWHC 370 (Ch), [2008] 1 P&CR DG 21.

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Construction of common phrases 11.246 did not include holiday flats but was limited to flats which could be sold as permanent residences. Though the conclusion was one based on the specific background in the case, one factor, which was said to indicate this, was that by describing the flats as ‘residential flats’, rather than simply as ‘flats’, the parties clearly intended to ‘delimit’ the type of flats which would be covered by the clause.

‘School’ Meaning of ‘school’ 11.245 The ordinary meaning of the word ‘school’ was stated by Simonds J in Lawrence v South County Freeholds Ltd475 to be ‘a place where boys and girls receive instruction and discipline’. In that case it was held that a covenant entered into in 1844 which prohibited any trade or business on certain premises ‘except only that of a school or seminary, surgeon or apothecary’ was infringed by use of the premises as a school of music on the ground that such words as ‘of music’ or ‘of dancing’ introduce a qualification to the word ‘school’ for which there is no justification—at any rate in words of exception which must be strictly construed. Further, an establishment supported largely by donations whose activities included education but which was primarily concerned to receive persons of a particular religious faith who had been abandoned by their kith and kin for change of faith, did not infringe a covenant not to use premises for the business of a schoolmaster or schoolmistress or for any other trade or business.476

Schools and specific covenants 11.246 Whilst a fee-paying school is a business,477 a non-fee-paying school, whether run by a public authority or by a charity, would prima facie not be a business.478 However, the use of a house as a school or for boarding pupils attending a nearby  school, will infringe a covenant against using the house as a private residence,479 and this would be so whether any business element was involved or not.480 In Wauton v Coppard,481 Romer J held that the carrying on of the plaintiff’s  preparatory school in an ordinary and reasonable way would be likely to result in breach of a covenant that there should not be carried on ‘any trade or business or occupation whatsoever whereby any injurious offensive or disagreeable noise or nuisance shall or may be occasioned caused or made’, with the result that the plaintiff was entitled to rescind an agreement to purchase entered into by him on the strength of a representation by the defendant’s agent

475 [1939] Ch 656. 476 Doe d Mackenzie v Baylis (1851) 17 LTOS 172. 477 Doe d Bish v Keeling (1813) 1 M&S 95; Kemp v Sober (1852) 19 LTOS 308; Wickenden v Webster (1856) 6 E&B 387. 478 See, by analogy, C & G Homes Ltd v Secretary of State for Health [1991] Ch 365. 479 Hobson v Tulloch [1898] 1 Ch 424. 480 Again, see the C & G Homes case, above. 481 [1899] 1 Ch 92.

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11.247  The construction of restrictive covenants that there was no covenant which would prevent him from carrying on such a school. But the establishment of a state school pursuant to statutory powers cannot amount to a legal nuisance and on the footing that ‘nuisance’ in a covenant means nuisance at common law, and in Harrison v Good482 it was held that such a school did not infringe a covenant not to do anything which might be a nuisance to the owners of adjoining property. As to whether a school would constitute an ‘annoyance’ or ‘nuisance’, see under ‘annoyance’ and ‘nuisance’ at para 11.126 above.

‘Single-storey dwelling’ 11.247 See under ‘Bungalow’ at para 11.172 above.

‘Structure’ 11.248 See under ‘Building’ at para 11.139 above.

‘Tavern’ 11.249 A tavern is a public house483 which, in addition to serving customers with beer and other excise liquor, also provides food.484 A tavern is also a ‘house of entertainment’.485

‘Trade’ 11.250 The characteristic of a trade is that it involves buying and selling. In Doe d Wetherell v Bird,486 Lord Denman CJ said: ‘Every trade is a business, but every business is not a trade; to answer to that description it must be conducted by buying and selling.’ Carrying on a sub-post office is not ‘trading’.487 If there is a covenant against carrying on any offensive trade, this does not prohibit the carrying on of a trade which is not offensive.488 A covenant not to carry on a particular trade will be infringed by carrying it on in one of its branches only.489 However, if the particular branch carried on also falls within the natural scope of another permitted trade or business, then only the latter trade will be being carried on.490

482 (1871) LR 11 Eq 338. 483 As to which, see above, para 11.243. 484 See the observations of Huddleston B in Coombs v Cook (1883) Cab & El 75. 485 Ibid. 486 (1834) 2 Ad & E1 161, at p 166. 487 Frampton v Gillison [1927] 1 Ch 196. 488 Bonnen v Sadler (1808) 14 Ves 526. 489 Doe d Gaskell v Spry (1818) 1 B & Ald 617 (trader who merely sold raw meat was held to be carrying on the trade of a butcher although at that time the trade usually included the slaughter of animals and the preparation of the meat prior to its sale). 490 Jones v Bone (1870) LR 9 Eq 674; A Lewis & Co (Westminster) Ltd v Bell Property Trust Ltd [1940] Ch 345. See, further, ‘Overlap between two businesses’, above, para 11.174 et seq.

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Construction of common phrases 11.253

‘Victualler’ 11.251 In Joint London Holdings Ltd v Mount Cook Land Ltd,491 a lease for 125  years entered into in 1950 contained a covenant that the tenant was not to carry on the business of a ‘victualler’, amongst others. The tenant sought a declaration that the use of the premises as a shop for the sale of pre-prepared and packaged sandwiches, other cold food and non-alcoholic drinks, including coffee, to be sold primarily for consumption off the premises but also with limited facilities for consumption on the premises, would not constitute a breach of the covenant. It proposed to sub-let the premises to Pret à Manger for such purposes. 11.252 The Court of Appeal, overturning Blackburne J, held that the word ‘victualler’ in the covenant meant a person who supplies food and drink and was not restricted to a licensed victualler. The Court considered that the general meaning of the word was a supplier of victuals, which was an established expression, whereas ‘licensed victualler’, denoted a person running a public house. There was nothing to displace the inference that when the parties chose to use the word ‘victualler’ they did so with the intention that the word should bear its ordinary general meaning and not the limited and specific meaning of ‘licensed victualler’. In the light of this finding, it was not necessary to deal with that part of the appeal which challenged the judge’s finding that the prohibition against carrying on the business of a coffee house keeper did not extend to the business of selling food and drink exclusively for consumption off the premises.

‘Vintner’ 11.253 The trade of a vintner is a trade in wine which is regulated by the Vintners’ Company whose freemen, even before the Licensing Act of 1860 (which introduced ‘off-licences’), enjoyed the special privilege of selling wine not only for consumption on the premises but also to be consumed off the premises.492

491 [2006] 2 P&CR 17. 492 Wells v Attenborough (1871) 24 LT 312.

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12 Restrictive covenants and competition law

GENERAL COMPETITION LAW 12.1 The common law has, as a matter of public policy, long regarded agreements in restraint of trade as being unenforceable unless they are reasonable with reference both to the interests of the parties concerned and of the public.1 However, covenants imposed as part of the sale or lease of property are not generally within this rule, where imposed on purchasers or lessees at least. Many restrictive covenants do not restrict trade, of course. However, even where they do, the courts have treated such covenants as being outside the scope of the rule. 12.2 This has not been done by laying down a special exemption making land covenants as such outside it, but by the courts having ruled that the restraint of trade rules only apply where a person already has a freedom to do something which he has then given up. Restrictions imposed on the transferee of land will therefore be outside this because the person has no right to trade from the land in the first place until the restricted right to do so is given to him by the transfer. Though this been formulated as a general exception to the restraint of trade rules, not specifically linked to land law, there is no doubt that one of the reasons for its adoption was to avoid it being applicable to ordinary restrictive covenants imposed on land. This basis of exception was laid down by the House of Lords in Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd 2 where it was held that the doctrine of restraint of trade had no application to restraints imposed on persons who, before the transaction by which the restraints were imposed, had no right to trade at all on the land in question. The judges particularly had in mind the situation where an owner of land grants a lease to a person who had no pre-existing right to occupy the land, and by the lease imposes restraints on the lessee’s power to trade as he likes on the land. This would therefore not ordinarily be regarded as an agreement in restraint of trade. However, it is to be noted that the rationale would not cover restrictions entered into by the vendor of land in relation to land retained by him for the benefit of the land disposed of, where the vendor would prior to the transaction have had full, unrestrained right to trade from such land.

1 See, Esso Petroleum Co Ltd v Harper’s Garage (Stourport) Ltd [1968] AC 269, below. 2 [1968] AC 269.

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12.3  Restrictive covenants and competition law 12.3 The courts will be astute to prevent abuse of the exception. Where, for example, a sale of land was followed by an immediate lease-back to the vendors on the basis of their previous occupation, the Court of Appeal held the restraint of trade doctrine applies (see Alec Lobb (Garages) Ltd v Total Oil (Great Britain) Ltd).3 Indeed, it did so where the previous owner, the vendor, was in fact a company and the lessees who took the ‘lease-back’ were the principal shareholders of the company, on the basis that, in reality, they had had full freedom to trade from the land, albeit through the company, prior to the transaction. The restraint was, however, found to be reasonable in all the circumstances.4

THE COMPETITION ACT 1998 12.4 Chapter I of the Competition Act 1998 (‘the Act’)5 did not originally apply to most land agreements. However, by the Competition Act 1998 (Land Agreements Exclusion Revocation) Order 2010,6 the provisions of Chapter I of the Act do now apply to land agreements, whether entered into before the Order came into force on 6 April 2011 or not (although ‘planning obligations’ continue to be outside the ambit of the Act7). 12.5 Restrictions infringing the rules in Chapter I of the Act are void under section 2(4) and unenforceable. Enforcement action may be taken by the Competition and Markets Authority (CMA), which also has the power to impose financial penalties in appropriate cases (see below). Few restrictive covenants are likely to fall foul of Chapter I of the Act, but it is appropriate to give a brief overview of what is covered and how the rules introduced by it operate.8

What is covered? 12.6 Restrictions by which competition in an area is ‘appreciably restricted’ are likely to be regarded as unjustifiably anti-competitive and thereby in breach of Chapter I of the Act unless the exemption requirements of section 9(1) of the Act are satisfied. A restrictive covenant (or an exclusivity arrangement in a lease) to protect a retailer of particular goods from competition from other retailers of such goods

3 4 5 6 7 8

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[1985] 1 WLR 173. See similarly, Amoco Australian Pty Ltd v Rocca Bros Motor Engineering Co Pty Ltd [1975] AC 561 (PC) where the restraint of trade doctrine was held to apply but the opposite conclusion was reached on the facts. Which in Chapter I largely mirrors Article 101 of the Functioning of the European Union Treaty (formerly Article 81 of the Amsterdam Treaty, and before that, and originally, Article 85 of the Treaty of Rome) in relation to restrictions on competition. SI 2010/1709. By virtue of para 1 of Sch 3 to the Act. Planning obligations can only be enforced by a planning authority, of course (see Chapter 32). And it is not by any means of purely academic interest, as the example given at para 12.12 below will show.

The Competition Act 1998 12.8 in a particular area, shopping centre or the like, clearly has the potential to restrict competition in the related market. This is confirmed at paras 4.13 and 4.10 of the OFT Land Agreements Guideline (OFT 1280a) issued by the Office of Fair Trading (OFT) in March 2011. The OFT was the predecessor to the CMA (which took over relevant responsibilities from 1 April 2014). The Guideline continues to apply, having been adopted by the CMA. Obviously, the usual restrictive covenant is taken for the benefit of specified retained land, however, rather than to prevent competition as such. An agreement will not fall within the Chapter I prohibition unless its impact on competition in a related market is ‘appreciable’. The local market in which the store or whatever is intended to operate would need to be assessed to determine whether there is or would be an appreciable effect on competition from such a covenant or arrangement. 12.7 As set out in the OFT Guideline at paras 1.8–1.9, two main categories of restrictions in land agreements can be identified as the most likely to have potential to restrict competition: ‘1.8 First, if the parties to a land agreement are competitors in a relevant market and a restriction regarding the use of land is aimed at sharing or carving-up markets between those parties, the agreement is very likely to constitute a serious infringement of the Chapter I prohibition. 1.9 Second, other types of restriction may fall within the Chapter I prohibition if they have the effect of restricting competition by raising barriers to entry (or expansion) in a particular market where a party to the agreement is carrying out an economic activity and a restriction makes access to that market by other competitors more difficult.’ However, as in paragraph 1.9 goes on to state: ‘These types of restriction are unlikely to appreciably restrict competition unless one or more of the parties to the agreement possess ‘market power’ in a related market. Market power is the ability to maintain prices above competitive levels or to maintain output in terms of product quantities, product quality, and variety or innovation below competitive levels for a not insignificant period of time.’ And in para 1.10 it is stated: ‘Market power is unlikely to arise where there is sufficient competition from existing competitors in the related market, or other suitable land is available for use in the related market by other competitors. Chapter 4 provides further detail on how to assess such factors’ [para 1.11]. 12.8 Paragraph 2.13 of the Guideline indicates that the OFT does not generally consider that agreements between undertakings will appreciably restrict competition if: (1) the aggregate market share of the parties to the agreement does not exceed 10 per cent on any of the relevant markets affected by the agreement where the agreement is between competing undertakings; or (2) the market share of each of the parties to the agreement does not exceed 15 per cent on any of the relevant markets affected by the agreement where 347

12.9  Restrictive covenants and competition law the agreement is made between non-competing undertakings (that is, entities which are neither actual nor potential competitors on any of the markets concerned, which usually means those operating at different levels of the supply chain), subject to the caveats set out there and in para 2.14 of the Guideline. 12.9 Even where the parties’ market shares exceed the thresholds set out in para 2.13, that fact alone does not mean that the effect of an agreement on competition is appreciable. Other factors will then fall to be considered in determining whether the agreement may have an appreciable effect on competition, such as the type of restriction, the extent and duration of it, and the relationship between the parties to the agreement.9

Exemptions 12.10 Agreements which fall within the scope of the Chapter I prohibition (or Article 101) will nevertheless be exempt from the prohibition on them if the criteria set out below are satisfied, with no prior decision to that effect being required. Such an agreement is valid and enforceable from the moment that the section 9(1) criteria are satisfied and will continue to benefit from exemption for so long as those criteria remain satisfied. The criteria are that the agreement must: (1) contribute to economic progress, with the benefits of the agreement outweighing, or at least matching, the negative impact on competition (sometimes referred to as ‘efficiency gains’); (2) allow consumers a fair share of the resulting benefits; (3) not impose restrictions going beyond those indispensable to achieving those objectives; and (4) not afford the parties the possibility of eliminating competition in respect of a substantial part of the products in question. 12.11 One relatively common circumstance in which these criteria may be met is where the arrangement gives economic benefits in terms of attracting an anchor retailer to a site, a fair share of which benefits reach consumers, and the restriction is indispensable to achieve this. It may be regarded as indispensable if, for example, an anchor retailer will only be prepared to invest in building, opening and operating a major food store on the site if it is to be the only food retailer operating on the site for a limited period, such as five years, necessary to secure the commitment of such a retailer. This may provide justification for the arrangement. Only in the event that competition in the area is shown by an appropriate assessment and evidence to be appreciably restricted as a result of an arrangement and the requirements of section 9(1) of the Act are not satisfied will the restrictions be regarded as unjustifiably anti-competitive.

9

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See OFT1280 app 25-234.

The Competition Act 1998 12.12

Example 12.12 An example from OFT1280a, with OFT analysis, will serve to illustrate both the potential importance of the provisions of Chapter I of the Act in the context of restrictive covenants and of how the scheme of the Act works. ‘9.52 Littleville is a small town in a rural area. The nearest town is 10 miles away. 9.53 There are five licensed betting offices (LBOs) in Littleville, each with a 20 per cent share of sales in this town. They are all within walking distance of one another on or within a close proximity to the High Street. There are a number of other retailers on or near the High Street. 9.54 About a year ago, one of the LBOs (Bet With Us) acquired the freehold to a vacant retail unit next door to its existing unit, with a view to extending into the vacant unit. However, Bet With Us eventually decided to abandon the plan to expand its office. Instead, it has decided to sell the vacant unit to Fix It, a hardware store. 9.55 Bet With Us wants to ensure that if the outlet becomes available again, no other company will be able to open an LBO next door. It therefore includes a restrictive covenant in the sale, which prevents the unit being used as an LBO by future owners. Summary analysis: 9.56 The restrictive covenant is aimed at preventing another business from competing with Bet With Us next door to it and preventing access to the site by competitors of Bet With Us. This type of restriction could appreciably restrict competition, depending on the geographic scope of the related LBO market and the extent of competition in this market. 9.57 The geographic dimension of the related market is broadly determined by the distance that users of an LBO in Littleville would go to find an alternative LBO in response to a small but significant sustained increase in prices. Given the absence of LBOs in a radius of 10 miles, the market is likely to include only the five LBOs in Littleville. 9.58 Based on Bet With Us’s market share, the fact that it faces relatively strong competition from other betting shops in the area that that there appear to be many other suitable retail outlets available to competitors (subject to planning permission and obtaining relevant licensing consents), the covenant may not appreciably restrict competition.’ However, were it to be otherwise the implications could be serious. If the restrictive covenant did appreciably restrict competition, there is no evidence of any countervailing benefits which may outweigh the restriction on competition at any present or future time, so the agreement would be unlikely to benefit from exemption.10 The consequence would be that it would be void and unenforceable, and the other effects of breach of the Chapter I prohibition set out below may also follow.

10 See, eg Martin Retail Group Limited v Crawley BC [2014] L&TR 17, where a user clause restricting use by a tenant to certain types of retail trade only, failed on each limb of the exemption criteria.

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12.13  Restrictive covenants and competition law 12.13 Further, the competitive assessment of the restrictive covenant may vary over time. Although the covenant may not appreciably restrict competition at the time it is entered into, it may subsequently infringe the Chapter I prohibition as a result of changes in market circumstances. If, for example, Bet With Us’s market share increases (for example, if three of the other LBOs in the area were to close) and if in the future, there was to be a shortage of other suitable sites available to potential competitors in Littleville over a short-term (one- to two- year) period, the position may change (see para 9.59 of OFT1280a).

Effects of breach of Chapter I of the Act 12.14 A restriction which infringes the Chapter I prohibition is void and unenforceable.11 The effect of this on the remainder of an agreement is a matter for the court to determine in the context of the agreement, but it may be possible to sever the offending provisions from the other terms of the agreement which will remain valid and enforceable.12 Parties to an agreement which falls within the scope of the prohibition may also face enforcement action by the OFT, a sectoral regulator,13 or (whilst Britain remains a member of the European Community) the European Commission where there may be an effect on trade with other Member States (though this is clearly unlikely in relation to a covenant relating to UK land use). These authorities have the power to investigate suspected infringements, to impose financial penalties of up to 10 per cent of an entity’s worldwide turnover and to give directions to take steps to bring an infringement to an end.14 12.15 Appeals can be made from decisions of the OFT and the sectoral regulators under the Act to the Competition Appeal Tribunal.15 The Competition Appeal Tribunal Rules 2003,16 set out the procedure in relation to such appeals. Appeals on a point of law may, with permission,17 be made from the Competition Appeal Tribunal to the Court of Appeal.18 12.16 The parties to a prohibited agreement may in addition be liable to private action before the courts for damages or injunctive relief for breaches of competition law, by any person who has suffered loss as a result of a breach. A ‘fast track’ procedure for claims for compensation (or an injunction) to be made to the Competition Appeals Tribunal was introduced by the Consumer Rights Act 2015 with effect from 1 October 2015.

11

A tenant seeking renewal of a business lease under Part II of the Landlord and Tenant Act 1954 was on renewal accordingly freed by the county court from a clause imposing such a restriction in Martin Retail Group Limited v Crawley BC [2014] L&TR 17. 12 See, eg Inntrepreneur Estates Ltd v Mason [1994] 68 P&CR 53, and Inntrepreneur Estates (GL) Ltd v Boyes [1994] 68 P&CR 77 (CA). 13 The following sectoral regulators have concurrent powers to enforce competition law in the UK: the Office of Communications; the Gas and Electricity Markets Authority; the Water Services Regulation Authority; the Office of Rail Regulation; the Civil Aviation Authority; and the Northern Ireland Authority for Utility Regulation. 14 As to this, see the OFT guideline Enforcement (OFT407). 15 To which applications for judicial review of ODT decisions also fall to be made. 16 SI 2003/1372, as amended. 17 Of the Tribunal or the Court of Appeal. 18 Section 49 of the Act.

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Groceries Market Investigation (Controlled Land) Order 2010 12.19

THE GROCERIES MARKET INVESTIGATION (CONTROLLED LAND) ORDER 2010 12.17 On 10 August 2010 the Competition Commission (CC) made the Groceries Market Investigation (Controlled Land) Order 201019 (‘the Order’). The CC (like the OFT) has now been replaced by the CMA,20 but the order remains in force. The Order followed an investigation by the CC which concluded21 that, amongst other things, the control of land in highly concentrated local markets by incumbent grocery retailers was adversely affecting competition in the market, and considered there was a detrimental effect on customers as a result. Its provisions in relation specifically to the grocery sector are additional to those which apply under the Competition Act 1988 and general competition law (above). Save where stated differently below, the Order came into force on 10 August 2010.

To whom the Order relates 12.18 The Order is directed to controlling the restrictive land use activities of ‘Large Grocery Retailers’. A ‘Large Grocery Retailer’ is defined in Article 2 as any person specified by the Order or designated from time to time as such by the OFT in accordance with Article 3. There are currently seven companies who are designated ‘Large Grocery Retailers’ for the purposes of the Order, namely Tesco plc, J Sainsbury plc, Wm Morrison Supermarkets plc, Asda Stores plc, Co-operative Group Limited, Waitrose Limited, and Marks and Spencer plc (together with any companies controlled by them as referred to in Schedule 1 to the Order).

Release of specified existing restrictive covenants 12.19 Article 4 of the Order, amongst other things, required specific restrictive covenants (identified by the named retailer and a description of the relevant land and registered title number) set out in Schedule 2a to the Order – which the CC specifically examined and found to be preventing, restricting or distorting competition – to be released by the Large Grocery Retailers holding the benefit of them, using their best endeavours to release them by entering into a deed of release with the owner of the burdened land and removing the relevant entries from the Land Register (in the case of registered land) or the Charges Register (in the case of unregistered land), or in the event that could not be achieved to enter into a deed not to enforce them and have a specified note made on the appropriate register. This was required to be done within six months of the Order (by Article 4(3)) without charge to the burdened party (Article 4(2)). 19 Published by the Competition and Markets Authority, updated 21 April 2015. 20 From 1 April 2014. 21 In its report ‘The Supply of Groceries in the UK Market Investigation’ published on 30 April 2008.

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12.20  Restrictive covenants and competition law 12.20 In addition (by Article 4(3)(b)), any other existing restrictive covenants which may restrict grocery retailing and are enforceable by a Large Grocery Retailer (other than those specific covenants identified in Schedule 2b to the Order already determined to be unobjectionable) which are found by the OFT on the application of the owner of burdened land after the Implementation Date of 1 July 2012 applicable to this part of the Order, to fail the test set out in Schedule 4 are required to be so released within a period to be specified by the CC when making its determination, of between three and six months of the determination being notified to the Large Grocery Retailer. There are exceptions: (1) by Article 9, for certain ‘Operational Land Restrictions’ on or adjacent to a Grocery Store Site necessary for the effective operation of the Large Grocery Retailer which do not provide for the Large Grocery Retailer to have exclusive use of any car park, service yard or access road which is also necessary for the operation of another Grocery Store, as set out there; (2) by Article 4(3)(b)(i) for the following restrictions that fall within Article 6: (a) a restriction in a lease granted to a tenant of a residential dwelling or in a head lease which specifies that a leasehold property is to be used only for residential purposes; or (b) a User Clause which reflects any agreement entered into or any unilateral undertaking given pursuant to section 106 of the Town and Country Planning Act 1990. 12.21 Where it applies, the test in Schedule 4 is a technical one which is set out in some detail and involves the OFT looking at the total number of relevant grocery stores within a 10-minute drive time from the site burdened by the Large Grocery Retailer’s covenant or exclusivity arrangement benefiting from a restrictive covenant or exclusivity agreement and establishing the number of grocery stores exceeding 1,000 square metres in net sales area, or where the number is three or fewer, establishing whether the grocery retailer in question has a market share of greater than 60 per cent in the 10-minute drive time area (likewise). If the test is failed the Large Grocery Retailer is required to arrange for the release of the restrictive covenant or exclusivity arrangement, as referred to above.

Prohibition on entering into restrictive covenants 12.22

By Article 5 of the Order, a Large Grocery Retailer is prohibited from:

(a) entering into any Restrictive Covenant that may restrict grocery retailing or have equivalent effect; (b) entering into any agreement which has equivalent effect; or (c) procuring that such a Restrictive Covenant or agreement having equivalent effect is entered into on their behalf. Again, there is an exception for restrictions that fall within Article 6, namely residential leases and clauses reflecting section 106 agreements and 352

Groceries Market Investigation (Controlled Land) Order 2010 12.26 undertakings and in relation to certain Operational Land Restrictions within Article 9, as referred to at para 12.20 above. By Article 10, it also does not apply to ‘Pension Companies’ in certain circumstances.

Prohibition on enforcement of ‘exclusivity arrangements’ 12.23 Article 7 of the Order prohibits the specified ‘exclusivity arrangements’ set out in Schedule 3a to it from being enforced after the period of five years from the date of the Order. By Article 7(2)(b), any other existing ‘exclusivity arrangements’ which benefit a Large Grocery Retailer (other than those specific arrangements identified by in Schedule 3b as having already been examined and not found to prevent, restrict or distort competition) found by OFT, on the application of a party to the arrangement or someone wanting to develop or operate a grocery store on a site restricted by such an arrangement, after the Implementation Date of 1 July 2012 applicable to this part of the Order, to fail the test in Schedule 4 to the Order are prohibited from being enforced after five years from the date on which the grocery store which benefits from the arrangement first began trading. Again, the exception in Article 9 applies in relation to certain Operational Land Restrictions as set out there.

Prohibition on entering into ‘exclusivity arrangements’ 12.24

By Article 8 of the Order:

‘Large Grocery Retailers must not enter into or procure the entry by others into any Exclusivity Arrangement that may restrict grocery retailing or have equivalent effect with a duration of more than five years from the date on which the Grocery Store of the relevant Large Grocery Retailer which benefits from the Exclusivity Arrangement first began trading.’ Again, the exception in Article 9 applies in relation to certain Operational Land Restrictions as set out in in Article 9, and the Article 10 exception in relation to ‘Pension Companies’ also applies.

What constitutes a ‘restrictive covenant’ under the Order and what constitutes an ‘exclusivity arrangement’ 12.25 By Article 2 of the Order, ‘Restrictive Covenant’ means ‘an agreement which restricts the user of land belonging at the date of the agreement to the covenantor for the benefit of the land belonging at the date of the agreement to the covenantee’. 12.26

By Article 2 of the Order, ‘Exclusivity Arrangement’ means:

‘an arrangement by which a person agrees with a Large Grocery Retailer not to allow another Grocery Store to operate from the same Site or otherwise agrees to restrict or limit the sale of Groceries by persons other than the Large Grocery Retailer on the Site.’ 353

12.26  Restrictive covenants and competition law And ‘Site’ means: ‘land on which a Grocery Store is situated or is to be developed or operated or land in close proximity to such land which the Large Grocery Retailer or any other person has an interest and includes land used or to be used for an Access Road, Car Park or Service Yard for the purposes of a Grocery Store, such use being either for the exclusive or non-exclusive benefit of the operator of the Grocery Store.’

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13 Remedies for breach of a restrictive covenant

INTRODUCTION 13.1

Assuming the existence of:

(1) a ‘competent claimant’ (ie a person identified as being entitled to the benefit of a restrictive covenant in accordance with one of the categories of competent claimants considered in Chapters 2 to 8); (2) a ‘viable defendant’ (ie a person who can be shown to be subject to the burden of the covenant either as an original covenantor or under the rules relating to the running of the burden of a restrictive covenant considered in Chapter 9); and (3) a ‘non-compliance’1 (ie facts which amount, or which may amount, to non-compliance with the terms of the covenant, in relation to which, Chapter 11 is relevant), then the only question remaining to be considered is the question of remedies (including possible defences thereto) and the forum in which proceedings should be brought. 13.2 Before considering the remedies which are available under the general law, it is proposed to refer briefly to certain special remedies which may be conferred by the terms of the agreement between the parties to the covenant.

SPECIAL REMEDIES DEPENDENT UPON TERMS AGREED BETWEEN THE PARTIES TO THE COVENANT Right of entry 13.3 The remedy of self-help which is available under the general law for abating a common law nuisance, is not available for remedying a breach of a restrictive covenant2 unless the instrument containing the covenant (or some collateral agreement) expressly reserves a right to enter the subjective land for that purpose. Since, however, such a right is not an ordinary incident of a restrictive covenant and cannot exist as an interest in freehold land otherwise than 1 2

The word ‘breach’ is avoided here since it technically presupposes liability and would therefore imply (1) and (2) above and be tautologous. Urban Housing Co Ltd v Oxford Corpn [1940] Ch 70, ‘… the removal by force of something erected in breach of a covenant is not a thing which the law of England permits’ per Sir Wilfred Greene MR, at p 82.

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13.4  Remedies for breach of a restrictive covenant as ancillary to another interest, such as a rentcharge, it is usually3 necessary, in order for such a right of entry to be capable of running with the subjective land in parallel with the covenant, for it to be linked (together with the covenant) to a rentcharge or, since section 2 of the Rentcharges Act 1977 came into operation on 22 August 1977, to an ‘estate rentcharge’ as defined in section 2(4) of that Act. 13.4 By section 2(4) an ‘estate rentcharge’ includes a rentcharge created for the purpose of making covenants to be performed by the owner of the land affected by the rentcharge enforceable by the rent owner against the owner for the time being of the land. The subject of such rentcharges and their importance in the law of covenants is considered later, in Chapter 29 below (where rights of entry are also further considered).

Right of re-entry 13.5 Whilst a right of entry confers a right merely to enter land for a specific purpose, a right of re-entry confers a right when a specified event occurs (such as breach of covenant) to recover, by entry,4 ownership of the legal estate in the land in question. 13.6 Further, unlike a right of entry, a right of re-entry can exist in its own right independently of whether it is annexed to a rentcharge.5 If it is not annexed to a legal rentcharge then it suffers from the drawback of being an equitable interest only.6 In addition, where created by an instrument taking effect before 6 April 2010, such a right was subject to the rule against perpetuities.7 By reason of the Perpetuities and Accumulations Act 2009,8 the rule does not apply to rights of entry contained in instruments taking effect on or after 6 April 2010 though it continues to apply to earlier instruments. Subject to the relevant perpetuity period in the case of earlier covenants,9 or at any time where contained in an instrument taking effect after 5 April 2010, a right of re-entry may be made exercisable on breach of covenant10 thus 3

Unless some other principle can be invoked, such as that of intrinsic dependency: see eg, Halsall v Brizell [1957] Ch 169. 4 Subject to the provisions of s 2 of the Protection from Eviction Act 1977 which, however, only restrict the exercise of a right of re-entry to forfeit a lease of premises let as a dwelling. 5 Cf Re Hollis’ Hospital Trustees and Hague’s Contract [1899] 2 Ch 540; Shiloh Spinners Ltd v Harding [1973] AC 691. 6 By virtue of the combined effect of ss 1(2)(e), 1(3) and 4(1) of the Law of Property Act 1925. It is one of those rare non-overreachable equitable interests which, in relation to unregistered land, is not registrable as a land charge under the Land Charges Act 1972 and which, therefore, depends for its enforcement against a purchaser of a legal estate in the land affected upon the equitable doctrine of notice as encapsulated in s 199 of the Law of Property Act 1925: Shiloh Spinners Ltd v Harding [1973] AC 691. For registered land, see para 9.42 above. 7 The Perpetuities and Accumulations Act 1964, s 11(1). 8 Brought into force on 6 April 2010 by the Perpetuities and Accumulations Act (Commencement) Order 2010, SI 2010/37. 9 A period of up to 80 years could be specified as the perpetuity period pursuant to s 1(1) of the 1964 Act. 10 Or, if it is desired to ensure that the right of re-entry is exercisable on the happening of an event which, as between the original parties to the covenant, would constitute a breach of covenant (so as to liberate the exercise of the right of re-entry from the constraints applicable to the running of the benefit and burden of the covenant), ‘on an event occuring which, if the covenant were enforceable (and whether it is enforceable or not) would constitute a breach of covenant’.

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Declaration that the claimant is entitled to enforce covenant 13.9 providing (during that period) a powerful inducement to every owner of the land (other than a bona fide purchaser of a legal estate in unregistered land who takes for value and without notice of the right of re-entry or a transferee for valuable consideration of registered land where the right of re-entry is not protected on the register) to comply with the terms of the covenant.11

Arbitration 13.7 The terms of a restrictive covenant sometimes provide that if any dispute shall arise as to whether a breach has occurred or, in the case of a covenant requiring the covenantee’s consent or approval which is not to be unreasonably withheld, whether such consent or approval has been unreasonably withheld, then the dispute shall be referred to arbitration. In such a case, arbitration will take precedence over proceedings in court which, if commenced, may be stayed on the application of the other party under section 9 of the Arbitration Act 1996 so that the dispute can be dealt with by arbitration. The presence of an arbitration clause will not prevent a covenant from ‘touching and concerning’ the land.12

GENERAL REMEDIES 13.8 Depending upon the circumstances (referred to below), the possible remedies available under the general law are:13 (1) a declaration that the claimant is entitled to enforce the covenant; (2) a final injunction to restrain or to remedy breach of the covenant; (3) an interim injunction to restrain or remedy breach of contract pending final determination; (4) damages in addition to, or in substitution for, an injunction; (5) damages at common law. Each of these remedies will be considered in turn.

(1) A DECLARATION THAT THE CLAIMANT IS ENTITLED TO ENFORCE THE COVENANT Jurisdiction of the court to grant a declaration 13.9 The remedy of a declaration as to the existence of a legal or equitable right or power, was originally available only in the Court of Chancery and then only if it was shown that some other relief, whether claimed or not, was dependent upon the existence of such right or power.14 This jurisdiction was extended to all 11 See further below, at para 29.4 et seq. 12 See Shayler v Woolf [1946] Ch 320, CA. 13 The remedy of the appointment of a receiver may also be available. As to this, see Chapter 30. 14 See, eg Jackson v Turnley (1853) 1 Drew 617; Lady Langdale v Briggs (1856) 8 De GM & G 391.

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13.10  Remedies for breach of a restrictive covenant divisions of the High Court by the Judicature Acts 1873–75 and in 1883 a new rule of court15 empowered the court to make declaratory judgments or orders ‘whether or not any consequential relief is or could be claimed’. 13.10 This rule is now derived from section 19 of the Senior Courts Act 1981 and embodied in CPR, r 40.20 which provides in simple terms: ‘The court may make binding declarations whether or not any other remedy is claimed’. It has been a matter of debate whether the declaration remains an equitable remedy as such. It is arguable that it is, because the Judicature Acts merely empowered all parts of the High Court to exercise the power which had previously been exercised only by the courts of chancery.16 13.11 It was said by Megarry V-C in Tito v Waddell (No 2)17 that ‘it is well settled that it is discretionary whether or not to make a declaration’. However, he said, ‘That is not because the remedy is an equitable remedy, for as the Court of Appeal made plain in Chapman v Michaelson [1909] 1 Ch 238 it is not: it is neither a legal nor an equitable remedy, but statutory’. In the Northern Ireland case of Belfast West Power v Belfast Harbour Commission18 Girvan J considered debate about whether declaratory relief is equitable or statutory to be ‘arid and academic’. He said declaratory relief was discretionary ‘and has an affinity with equitable remedies’. It was said to be academic because in deciding how to exercise its discretion it is clear that the court will be guided by the equitable principles governing all discretionary remedies. In Fisher v Brooker,19 Lord Neuberger described ‘a declaration as to the existence of a long-term property right’ as not itself being equitable relief but said that ‘it is arguable that a declaration should be refused on the ground of laches if …. sought solely for the purpose of seeking an injunction or other purely equitable relief’.20 13.12 As CPR, r 40.20 makes clear, where the dispute is for example whether a given person is entitled to the benefit of a restrictive covenant, for example, for the purpose of qualifying as an objector to an application to the Upper Tribunal under section 84(1) of the Law of Property Act 1925,21 or whether 15 RSC Order 25, rule 5. 16 See Tito v Wadell (No 2) [1977] Ch 106, at p 259. 17 Ibid, at p 259 18 [1998] NI 112, at 121. 19 [2009] 1 WLR 1764 (an intellectual property case) at para 79. 20 Lord Hope at para 8 said: ‘The law of property is concerned with rights in things. The distinction which exists between the exercise of rights and the obtaining of discretionary remedies is of fundamental importance in any legal system. There is no concept in our law that is more absolute than a right of property. Where it exists, it is for the owner to exercise it as he pleases. He does not need the permission of the court, nor is it subject to the exercise of the courts discretion. The benefits that flow from intellectual property are the product of this concept. They provide an incentive to innovation and creativity. A person who has a good idea, as Mr Fisher did when he composed the well-known organ solo that did so much to make the song in its original form such a success, is entitled to protect the advantage that he has gained from this and to earn his reward. These are rights which the court must respect and which it will enforce if it is asked to do so’. 21 See s 84(3A) of the Law of Property Act 1925. Such a question can, however, in many cases, be determined by the Upper Tribunal itself without the necessity for separate proceedings in court: see Re Purkiss’ Application [1962] 1 WLR 902, commented on by Megarry J in Shepherd Homes Ltd v Sandham (No 2) [1971] 1 WLR 1062. But unlike a decision of the court,

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Declaration that the claimant is entitled to enforce covenant 13.15 a given person is not subject to the burden of a restrictive covenant,22 then the relief claimed may be limited to the appropriate declaration without anything else being claimed. In Re Gadd’s Land Transfer,23 Buckley J, whilst holding that he had no jurisdiction under section 84(2) of the Law of Property Act 1925 as originally worded24 to decide a future question of enforceability, proceeded to answer the question whether on completion of a sale to the claimant company, the covenants would be enforceable against it, under the court’s general jurisdiction to make declaratory orders. However, to be able to answer future questions, the court must be furnished with full details of the precise nature of the proposals so as to leave no room for doubt as to the effect of the declaration sought.25 13.13 The court will generally only make a declaration after evidence has been adduced and proper argument presented, since in making a declaration the court is expressing itself as satisfied as to the validity of the right claimed.26 It will not, therefore, generally make a declaration on the basis of admissions, or by consent, or in default of defence.27 This is a rule of practice, however, not a legal rule that such a declaration can never be made, and, following the introduction of the Civil Procedure Rules, where the court is, exceptionally, satisfied it is just for the declaration to be so made, it is able to be. In order to be made by consent, the court would need to be satisfied that the grant of the declarations is not likely to have any adverse repercussions for third parties. As to these matters, see Hayim v Couch28 and Singh v Singh.29 13.14 A declaration may in an appropriate case be granted on a summary judgment application: see, eg Financial Services Authority v Rourke.30

Special statutory jurisdiction in relation to restrictive covenants 13.15 The court also has a more specific power to make declarations in respect of restrictive covenants under section 84(2) of the Law of Property Act 1925. This (following amendments made after Re Gadd’s Land Transfer, above) now provides that: ‘(2) The court shall have power on the application of any person interested— (a) to declare whether or not in any particular case any freehold land is or would in any given event be affected by a restriction imposed by any instrument; or a determination of such a question by the Tribunal does not give rise to any issue estoppel in future cases: see the comments of Megarry J in the case last cited, and the decision of the High Court in Doberman v Watson [2017] 4 WLR 103, which confirms this is so. See further, para 24.33 et seq below. 22 As in Cryer v Scott Bros (Sunbury) Ltd (1986) 55 P&CR 183. 23 [1966] Ch 56, at 64F–65C. 24 It has since been amended:, see the subsection as it now appears, below, and Chapter 14. 25 Shropshire County Council v Edwards (1982) 46 P&CR 270, 279. 26 Metzger v Department of Health and Social Security [1977] 3 All ER 444, per Megarry V-C at p 451; affd [1978] 1 WLR 1046; Shropshire County Council v Edwards (1982) 46 P&CR 270. 27 See Wallersteiner v Moir [1974] 1 WLR 991, per Buckley and Scarman LJJ. 28 [2009] EWHC 1040 (Ch). 29 [2014] EWHC 2762 (Ch). 30 [2002] CP Rep 14 (Neuberger J).

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13.16  Remedies for breach of a restrictive covenant (b) to declare what, upon the true construction of any instrument purporting to impose a restriction, is the nature and extent of the restriction thereby imposed and whether the same is or would in any given event be enforceable and if so by whom’. This jurisdiction is designed to establish the position in respect of the specific matters referred to, once and for all across the board. The jurisdiction under this subsection is dealt with in more detail in Chapter 14.

Interim declarations 13.16 Before the introduction of the CPR (which came into force in 1999) there was generally considered to be no power to grant an interim declaration. However, CPR, rule 25.1 introduced such a power. This may be of use where parties want guidance in a case as to how they should act pending the final determination of the dispute, but is unlikely to be of value in most land covenant cases where the parties will generally want to know where they stand legally, not just on an interim basis. 13.17 Furthermore, if in such a case the parties want the court to rule on the position pending trial, the more direct course would, in most cases, be for the objector to seek an interim injunction requiring the landowner not to do anything pending trial (or, if the objector declined to apply before works or the new use commenced, for the landowner to seek an injunction requiring the opponent not to prevent the works or new use pending trial). When an interim declaration is sought, then, just as with an interim injunction, an undertaking in damages is likely to be required as a condition of the interim relief (see R v Secretary of State for the Environment, ex p RSPB31 and the balance of convenience test applied (see, eg R v Environment Agency, ex p Meyer Parry Recycling32). These matters are referred to in more detail below in relation to interim injunctions. 13.18 In the absence of a special case, the courts also generally remain cautious about granting interim declarations. This may be partly because a declaration by the court has traditionally been concerned with determining rights, which (in the absence of a summary judgment application) are only able to be properly determined on the merits at trial.33 Though procedurally available, there appears to be no reported case involving land covenants.

Declaration in addition to injunction 13.19 Even where the primary object of proceedings is to obtain an injunction, whenever the claimant is not the original covenantee, a declaration that he is entitled to the benefit of the covenant and that the acts complained of constituted

31 [1997] Env LR 431. Where, interestingly, the House of Lords was prepared to assume for the purposes of the case there was, in a European Community context at least, power to grant an interim declaration, though this had never been established pre-CPR. 32 [2001] Env LR 35, at para 6. 33 See also regarding this, Ex p, Meyer Parry Recycling, above.

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Declaration that the claimant is entitled to enforce covenant 13.22 a breach, may have advantages in addition to an injunction.34 The potential advantages are twofold. 13.20 First, if comprehensively framed, such a declaration will ensure that the resulting judgment will provide a binding decision on all the possible grounds on which the claimant may be entitled to an injunction. This will not necessarily be the case if an injunction only is claimed since the court may well be content to base its judgment on just one of the possible grounds, treating it as unnecessary to go further for the purposes of granting an injunction. 13.21 Thus, in Federated Homes Ltd v Mill Lodge Properties Ltd,35 the claimant was clearly entitled to relief (in the event, damages in substitution for an injunction) as an express assignee of the benefit of a covenant which benefited the claimant’s green land. But the claimant company had also acquired another part of the land originally benefited by the covenant—the red land—but in this case without being able to show an unbroken chain of express assignments of the benefit of the covenant. But an interesting question arose in regard to the red land whether the benefit of the covenant (which was entered into in 1971) had been annexed thereto by virtue of the application of section 78(1) of the Law of Property Act 1925. In view, however, of the claimant company’s entitlement to relief as owner of the green land, then in the absence of a claim for a declaration of entitlement in respect of both the green land and the red land, there may well have been no decision as to the claimant company’s locus standi in regard to that land. In the course of his judgment, Brightman LJ said:36 ‘… I turn to the question whether the benefit [of the covenant] has safely reached the hands of the [claimant] company. The green land has no problem owing to the unbroken chain of assignments. I am disposed to think that that is sufficient to entitle the [claimant] company to relief, and that the [claimant] company’s right to relief would be no greater at the present time if it were held that it also had the benefit of the covenant in its capacity as owner of the red land. However, the judge deals with both areas of land and I propose to do the same.’ Had the Court of Appeal not gone on to deal with the claimant company’s position as owner of the red land then, in the event of a subsequent severance of ownership between the green land and the red land, there would have been no binding decision concerning the running of the benefit of the covenant with the red land. The possibility of such an outcome could be avoided by seeking a specific declaration of entitlement to the benefit of the covenant as owner of the green land and, alternatively, as owner of the red land. 13.22 Second, as will be seen later in this chapter, an injunction may be refused  on a number of grounds, but if a declaration as to the claimant’s entitlement to the benefit of the covenant is asked for and obtained in the face of opposition, the proceedings will not have been in vain and the decision will

34 As to whether a declaration may be made although it is not specifically asked for, see Hulton v Hulton [1916] 2 KB 642; affd [1917] 1 KB 813; Harrison-Broadley v Smith [1964] 1 WLR 456; Biss v Smallburgh RDC [1965] Ch 335, per Harman LJ at p 361. Certainly a claimant will not be allowed to bring a second action against the same defendant on the same cause of action in order to obtain relief which might have been asked for in the first action: Isaacs & Sons v Salbstein [1916] 2 KB 139, CA. 35 [1980] 1 WLR 594. The full facts and decision are set out above at para 6.31 et seq. 36 Ibid, at p 603B.

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13.23  Remedies for breach of a restrictive covenant provide a useful precedent both as a matter of title and in the context of any future breaches of covenant.37 13.23 Further, in such a case, the consequential order as to costs may well be much more benign to the claimant than would otherwise be the case. In Sayers v Collyer,38 because of the claimant’s acquiescence, the court refused to grant an injunction and also refused to award damages in lieu under Lord Cairns’ Act. On the issue of costs Lord Bowen observed that ‘a claimant will not be saved from having his action dismissed with costs unless he has suffered tangible damage, or unless he is justified in bringing his action to ask for a declaration of title or to try a right’.39 Post-CPR there is much more flexibility in relation to an award of costs than previously, but if a claimant has succeeded in obtaining at least part of the relief he has sought he is more likely to obtain at least a partial award of costs than otherwise.

(2) A FINAL INJUNCTION TO RESTRAIN OR TO REMEDY A BREACH OF THE COVENANT 13.24 The original jurisdiction of the Court of Chancery to grant an injunction either to enforce a legal right (where the remedy of damages at common law was inadequate40) or to enforce an equitable right (no common law remedy being available41) was conferred on all divisions of the High Court by section 25(8) of the Judicature Act 1873. 13.25 The current jurisdiction is conferred by section 37 of the Senior Courts Act 1981, which provides as follows: ‘(1) The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so. (2) Any such order may be made either unconditionally or on such terms and conditions as the court thinks just.’ By their terms these provisions confer a wide discretion on the court, but whilst the discretion conferred by subsection (2) is substantially unfettered, the discretion conferred by subsection (1) is largely regulated by rules of practice which have been formulated by the courts themselves.42 13.26 There are some cases, referred to below, where the claimant is prima facie43 entitled to a final injunction almost as a matter of course, whilst in other cases a heavy onus may lie on the claimant to establish a case for the exercise of the discretion in his favour. 37

On the latter point see, for example, Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798. See, also, Marion White Ltd v Francis [1972] 1 WLR 1423 (covenant in restraint of trade between employer and employee). 38 (1884) 28 ChD 103, at p 109. 39 And see the order made by Astbury J (who declined to grant an injunction) in Sharp v Harrison [1922] 1 Ch 502, at p 516. 40 See London and Blackwall Rly Co v Cross (1886) 31 ChD 354, per Lindley LJ at p 369. 41 As in the case of the enforcement of a restrictive covenant against a successor from the covenantor. 42 See, generally, Harris v Beauchamp Bros [1894] 1 QB 801, per Davey LJ at p 809; North London Rly Co v Great Northern Rly Co (1883) 11 QBD 30, per Cotton LJ at p 39. 43 That is, subject to recognised defences considered below.

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A final injunction to restrain or to remedy a breach of the covenant 13.30 Further, a mandatory injunction will often be more difficult to obtain than a prohibitory injunction. With both types of injunction, the discretion is regulated by different rules of practice according to whether it is a final injunction or an interim (otherwise known as ‘interlocutory’) injunction which is being sought. Each of these different categories of case will now be considered in the context of restrictive covenants. 13.27 In considering the award of a final injunction to enforce a restrictive covenant, historically there has been some difference between a claimant who is entitled to enforce the covenant at law and a claimant who is entitled to enforce the covenant only in equity.44 As has been seen, the rights and obligations created by a restrictive covenant are both contractual and proprietary.45 The contractual rights and obligations are enforceable and binding at law. Further, if the common law rules relating to the assignment of the benefit of a covenant are complied with, then the assignee can also enforce the contractual rights at law against the original covenantor. 13.28 However, if (a) the benefit of the covenant is vested in the claimant by virtue of an assignment or transaction which has effect only in equity, or (b) the defendant is bound by the covenant not as an original covenantor but under the rule in Tulk v Moxhay, then the rights and obligations are enforceable only in equity as equitable proprietary rights and obligations. 13.29 The principles will be set out as they have developed in the case of the enforcement of, first legal, and second, the equitable rights, to aid an understanding of the position. However, in practice, for the reasons set out below,46 it is unlikely today to make any significant difference whether the right sought to be enforced is a legal or an equitable one, and the more significant difference is in relation to the principles that come into play when an equitable remedy (whether for enforcement of a legal or an equitable right) is sought (eg an injunction), as opposed to a remedy at law (by way of damages).

I:  Claimant with the right to enforce the covenant at law 13.30 Since the burden of a restrictive covenant does not run at law, to enforce the covenant at law a claim can only be made against the original covenantor. But it may be made either by the original covenantee or by a legal assignee of the benefit of the covenant. It would seem that the benefit of a restrictive covenant may become vested in an assignee at law in one of four ways: (1) by the covenant having been annexed (according to the rules at law47) to the land acquired by the assignee; (2) by an express assignment48 which satisfies the common law rules relating to the assignment of covenants.49 In the present context, the most significant 44

The importance of the distinction was questioned by Hoffmann J in Oxy Electric Ltd v Zainuddin [1991] 1 WLR 115 at 120G in a striking-out motion. 45 Above, para 1.1 et seq. 46 See paras 13.48–13.53. 47 See Rogers v Hosegood [1900] 2 Ch 388, per Collins LJ at p 404. 48 Ideally by deed or writing although there does not appear to be any specific requirement to this effect in respect of the benefit qua contractual right. 49 For a detailed consideration of these rules, see below, para 27.3 et seq.

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13.31  Remedies for breach of a restrictive covenant of these rules are the rule that the covenant must touch and concern land in which the assignor has a legal estate, the rule that the covenant must, in the absence of an indication in the covenant permitting severance, be assigned in its entirety, and the rule that the same legal estate in the whole of the benefited land must be transferred to the assignee;50 (3) by the operation of section 78(1) of the Law of Property Act 1925.51 Under this section, the benefit of a covenant is capable of passing to each of two or more subsequent owners who acquire part only of the benefited land52 and who acquire not the same but a derivative estate, such as a lease;53 (4) by an assignment in writing which complies with the requirements of section 136(1) of the Law of Property Act 1925.54 As in the case of an assignment at common law, it seems clear that for an assignment to take effect under section 136(1) the entirety of the covenant must be assigned to the same person (or persons jointly)55 together with a simultaneous transfer of the legal estate in the whole of the benefited land. Where the claimant is either the original covenantee or a legal assignee and is claiming to enforce the covenant against the original covenantor, then the position differs according to whether the claimant is seeking a prohibitory injunction or a mandatory injunction.

Final prohibitory injunction in enforcement of a legal right 13.31 In the case of a negative injunction to enforce a legal, contractual stipulation such as a covenant, then subject to the availability of any of the recognised defences56 and to the jurisdiction of the court, in appropriate circumstances, to award damages in lieu of an injunction,57 the position is governed by the celebrated dictum of Lord Cairns in Doherty v Allman:58 ‘If there had been a negative covenant,59 I apprehend, according to a well-settled practice, a Court of Equity would have had no discretion to

50 Of these requirements, the only one which is common to an equitable assignment is that of the covenant touching and concerning land of the assignor. All the above-mentioned requirements appear to have been present in Shaw v Applegate [1977] 1 WLR 970 even before written notice of the assignment was given to the covenantor by the letter of 13 April 1973 (thus making it also an effective legal assignment for the purposes of s 136(1) of the Law of Property Act 1925), yet before that letter was received the claimants appear to have been treated in the case as ‘equitable assignees only’: see the judgment of Buckley LJ at p 975G. The possibility of a legal assignment at common law (something which, outside leases, was largely confined to the benefit of covenants, positive or restrictive, which ‘touch and concern’ freehold land), appears to have been overlooked. 51 As to which, see above, para 6.27 et seq. 52 See Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594. 53 Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500. 54 As to which, see above, paras 7.21–7.22 et seq. For an example, see Shaw v Applegate [1977] 1 WLR 970 and see, also, footnote 48 above. 55 See Williams v Atlantic Assurance Co [1933] 1 KB 81. 56 As to which, see below, para 13.111 et seq. 57 See the decision of the Court of Appeal in Shaw v Applegate [1977] 1 WLR 970, where although the claimant was a legal assignee suing the original covenantor who had committed a clear breach, the claimant’s conduct was treated as justifying the court in refusing an injunction and awarding damages in lieu under Lord Cairns’ Act 1858 (repealed but the jurisdiction held by the House of Lords in Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 851 to remain in force, and now formally resurrected by s 50 of the Supreme Court Act 1981). 58 (1878) 3 App Cas 709, at p 719. This dictum was applied by the House of Lords in McEacharn v Colton [1902] AC 104. 59 In fact the House of Lords found that there was no such covenant in the case before it and no injunction was granted.

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A final injunction to restrain or to remedy a breach of the covenant 13.33 exercise. If parties, for valuable consideration, with their eyes open, contract that a particular thing shall not be done, all that a Court of Equity has to do is to say, by way of injunction, that which the parties have already said by way of covenant, that the thing shall not be done; and in such cases the injunction does nothing more than give the sanction of the process of the court to that which already is the contract between the parties. It is not then a question of the balance of convenience or inconvenience, or of the amount of damage or injury—it is the specific performance, by the court, of that negative bargain which the parties have made with their eyes open, between themselves.’ 13.32 See also Tipping v Eckersley,60 where Wood VC said at p 270: ‘If the construction of the instrument be clear, and the breach clear, then it is not a question of damage, but the mere circumstance of the breach of covenant affords sufficient ground for the Court to interfere by injunction’.61 The jurisdiction of the court to grant an injunction remains even then discretionary in strict terms,62 but it must be exercised judicially according to the rules which have been established by precedent,63 and this generally means a final prohibitory injunction should be granted to prevent breach of the covenant from continuing. 13.33 In relation to property rights generally, in Fisher v Brooker64 (a case that actually involved a claim for declarations), the Supreme Court made clear that generally the court will be expected to grant injunctive relief in circumstances where the refusal of it would effectively be tantamount to depriving the claimant of his property right, though it was made clear that defences to equitable remedies, such as laches65 could be a bar to relief, and that if it is oppressive to grant an injunction, damages in lieu of an injunction will be awarded instead.66 Lord Walker of Gestingthorpe in Fisher v Brooker put it as follows: ‘17. Where there is trespass to land or goods, or a comparable invasion of intangible property rights, the court’s natural response is to grant injunctive relief, and not to leave the claimant to his remedy in damages. In Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287, 322, A L Smith LJ made a much-quoted statement of principle beginning as follows: “Many judges have stated, and I emphatically agree with them, that a person by committing a wrongful act (whether it be a public company for public purposes or a private individual) is not thereby entitled to ask the court to sanction his doing so by purchasing his neighbours rights, by assessing damages in that behalf, leaving his neighbour with the nuisance, or his lights dimmed, as the case may be. In such cases the well-known rule is not to accede to the application, but to grant the injunction sought, for the plaintiff’s legal right has been invaded, and he is prima facie entitled to an injunction”.’

60 61 62 63 64 65 66

(1855) 2 K&J 264. And also Lord Manners v Johnson (1875–6) LR 1 ChD 673 where this position was restated. See Megarry J in Shepherd Homes v Sandham [1971] Ch 340, below. As Lord Blackburn put it in Doherty v Allman (1878) 3 App Cas 709, at p 729. [2009] 1 WLR 1764. As to which, see below, para 13.119 et seq. As to which, see para 13.81 below.

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13.34  Remedies for breach of a restrictive covenant 13.34 As to refusal of the injunction where it would be oppressive to grant it, and the award of damages in lieu of an injunction, see below. It can usefully be noted at this point, however, that Lord Walker of Gestingthorpe went on: ‘18. But, as A L Smith LJ went on to say, there are cases in which that rule is relaxed, particularly where it would be oppressive to the defendant to grant injunctive relief. The whole passage was quoted by Sir Thomas Bingham MR in Jaggard v Sawyer [1995] 1 WLR 269, 277—278, and his judgment, and that of Millett LJ, contain a full exposition of these principles as they now stand. Jaggard v Sawyer was concerned with the refusal of injunctive relief for breach of a restrictive covenant, an equitable right, but the same principles have been applied in respect of legal rights such as a legal easement of light, or indeed legal freehold ownership.’ The approach is consistent with the words ‘prima facie’ at the end of the passage from the judgment of AL Smith LJ just cited. 13.35 Accordingly, subject to the defences to equitable relief set out below, the question of oppression, and the award of damages in lieu of an injunction in an appropriate case, an injunction ought to be granted. It is important to bear in mind, however, that it is not just a balance of convenience test, ie that the court thinks damages rather than an injunction would be most appropriate, and that something going beyond this amounting to an equitable defence or oppression must be shown: see the comments of Sir Thomas Bingham MR in relation in this in Jaggard v Sawyer.67

Basis of the underlying principle 13.36 Lord Cairns, in the House of Lords case of Doherty v Allman,68 above, put the principle that an injunction must generally be granted on the basis that equity will seek to uphold the sanctity of a contract. The remedy of damages at common law is clearly deficient for this purpose and (in the case of a negative obligation) only the injunction can secure it. 13.37 In Fisher v Brooker members of the Supreme Court put it on the basis that the court must respect property rights and not deprive the claimant of property rights by refusing an injunction so that the court has sanctioned the appropriation of that right by the defendant on payment of damages.69 This ties in with what Kekewich J said in Collins v Castle:70 ‘When a man is suing [for an injunction] on a covenant it is immaterial whether there is damage or not. A man is entitled to enforce that covenant, which is a species of property’.

67 68 69 70

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[1995] 1 WLR 269, at p 283B. (1878) 3 App Cas 709. See Lord Hope at para 8; Lord Walker of Gestingthorpe at para 17, Baroness Hale in agreement with Lord Walker at para 20; and Lord Mance at para 28. (1887) 36 ChD 243, at p 254.

A final injunction to restrain or to remedy a breach of the covenant 13.39

Relevant factors 13.38 Where the principle is involved, then as between the original parties to the contract,71 it will be no bar to the remedy of injunction being available that the covenant does not touch and concern any land of the covenantee.72 13.39 Moreover, as stated by Kekewich J in Collins v Castle, the fact that the covenantee has suffered no pecuniary damage will not be a bar to injunctive relief. In such a case damages would be nominal and not therefore a sufficient remedy. In the context of the enforcement of legal rights, the inadequacy of the damages recoverable at common law is the raison d’être of all equitable remedies. In Doherty v Allman,73 Lord Blackman observed that, ‘a court of equity would not do its duty if it did not enforce the contract, because mere damages would not then afford a sufficient or adequate remedy’.74 In other words, the absence of pecuniary damage, far from being a reason why an injunction should not be granted, may be the very reason why it should be (per Walton J in John Trenberth Ltd v National Westminster Bank,75 quoted by Sir Thomas Bingham MR in Jaggard v Sawyer76). See also, eg Marten v Flight Refuelling Ltd;77 Wrotham Park Estate Co v Parkside Homes Ltd.78 In the latter case, although no pecuniary loss resulted from the breach of covenant, in the exercise of the court’s discretion, damages in lieu of an injunction were granted since the claimant was prima facie entitled to an injunction.

71 As between a legal assignee and the original covenantor, the existence of benefited land is important because only where there is such land does the common law recognise the assignability of a covenant (the rule, in this respect, being the same as for an equitable assignment): see below, p 503. 72 See the decision of the Court of Appeal on this point in Sefton v Tophams Ltd [1965] Ch 1140 (revsd on another point [1967] 1 AC 50). The injunction is thus freely available to enforce negative stipulations in contracts of all kinds including contracts which have no connection with land, such as covenants in restraint of trade, or against disclosure of information, entered into between employer and employee: see Warner Bros Pictures Inc v Nelson [1937] 1 KB 209; A-G v Barker [1990] 3 All ER 257. The cases of Formby v Barker [1903] 2 Ch 539 and LCC v Allen [1914] 3 KB 642 were both cases in which an injunction was sought against a subsequent purchaser from the original covenantor and where the absence of benefited land in such a case proved fatal. 73 (1878) 3 App Cas 709, at p 729. See, also, Tipping v Eckersley (1855) 2 K&J 264. 74 Though the absence of damage may be taken into account where appropriate: see, eg Sharp v Harrison [1922] 1 Ch 502, at p 516 (Astbury J). There the special reasons for a mandatory injunction being refused included an offer by the defendant to give certain undertakings the effect of which would be ‘no damage of any sort or kind suffered by the plaintiff’ as a result of his breach of covenant in constructing a window in a wall – though in addition, there was a substantial practical difficulty in the way of granting a mandatory injunction for the bricking up of the window, namely the fact that the flat in which the window was situated had been let on a lease for a term of five years to a person who was not a party to the action and there was no evidence to show whether the lessee took with notice of the covenant. 75 (1980) 39 P&CR 104. 76 [1995] 1 WLR 269, at p 280H. 77 [1962] Ch 115. 78 [1974] 1 WLR 798.

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13.40  Remedies for breach of a restrictive covenant

Quia timet (ie anticipatory) injunction in such cases 13.40 The principle would appear equally to apply where a breach of covenant is threatened and an application is made for a quia timet injunction.79

Final mandatory injunctions in enforcement of a legal right 13.41 Lord Cairns, in the passage quoted above from Doherty v Allman, was speaking of negative covenants only, and made clear the same principle did not apply to positive covenants (as in that case). 13.42 In Shepherd Homes Ltd v Sandham,80 the defendant erected a fence in the front garden of his freehold premises in breach of a covenant entered into by him with the claimant company not to erect fences in front of a line formed by the front elevation of his and adjoining houses. Five months later, the claimant (who owned the freehold reversions of certain neighbouring houses) issued an interlocutory application for a mandatory injunction requiring the removal of the fence and, relying on Lord Cairns’ dictum, claimed to be entitled to such an injunction ‘as of course’. In rejecting the application, the distinction between the rules of practice relating to prohibitory and mandatory injunctions was summed up by Megarry J in the following terms:81 ‘I may summarise my conclusions as follows. First, Lord Cairns LC’s statement of principle prima facie applies to mandatory injunctions; but it does not apply in its full width. The matter is tempered by a judicial discretion which will be exercised so as to withhold an injunction more readily if it is mandatory than if it is prohibitory. Even a blameless claimant cannot as of right claim at the trial to enforce a negative covenant by a mandatory injunction. Second, although it may not be possible to state in any comprehensive way the grounds on which the court will refuse to grant a mandatory injunction in such cases at the trial, they at least include the triviality of the damage to the claimant and the existence of a disproportion between the detriment that the injunction would inflict on the defendant and the benefit that it would confer on the claimant. The basic concept is that of producing a ‘fair result’, and this involves the exercise of judicial discretion.82

79 See the decision of the Court of Appeal in Sefton v Tophams Ltd [1965] Ch 1140, reversed by the House of Lords on a different point sub nom Tophams Ltd v Earl of Sefton [1967] 1 AC 50; Hodson v Coppard (1860) 29 Beav 4; Shafto v Bolckow, Vaughan & Co (1887) 34 ChD 725; Tipping v Eckersley (1855) 2 K & J 264; McEacharn v Colton [1902] AC 104. 80 [1971] Ch 340. 81 At p 351E–352B. 82 As to this sentence, in Charrington v Simons & Co Ltd [1971] 1 WLR 598, at p 603, Russell LJ, delivering the judgment of the Court of Appeal, said: ‘We would however say that we share with counsel for both parties doubts as to the usefulness of the phrase used by the learned judge ‘a fair result’ – a phrase echoed in Shepherd Homes Ltd v Sandham’. Megarry J expressly adopted the expression ‘fair result’ from the judgment of Buckley J at first instance in the Charrington case, and Buckley J’s decision, which was based on the application of that expression, was reversed by the Court of Appeal. Nevertheless, in the context in which Megarry J was using the expression, namely, an application for an interlocutory mandatory injunction, it seems to to equate with ‘the balance of convenience’ in the sense referred to below, para 13.63 footnotes 130 and 131.

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A final injunction to restrain or to remedy a breach of the covenant 13.45 The main thrust of this statement is that a mandatory injunction, is never available as a matter of course, unlike a final prohibitory injunction in relation to a contractual matter (in the absence of an equitable defence or oppression). 13.43 The decision of Astbury J in Sharp v Harrison83 lends direct support since in this case (as in the case before Megarry J), although the claimant was seeking to enforce a legal contractual right, a mandatory injunction for the removal of a new window overlooking the claimant’s house and constructed in flagrant breach of covenant was nevertheless refused. In the course of his judgment, Astbury J, after referring to Lord Cairns’ statement, said:84 ‘Where, however, the act has been done, and the question is whether or not a mandatory injunction should be granted, slightly different considerations obviously apply’. It is submitted that this is consistent with the underlying principle as put forward by Lord Cairns,85 since whilst a prohibitory injunction will uphold the terms of a contract (so as to prevent the horse from bolting) or protect an existing a mandatory injunction is concerned with the question of rectification of a breach (ie whether the horse should be ordered to be recovered or the claimant left to be compensated), though it fit less easily with the principle that the refusal of an injunction would be tantamount to appropriating the claimant’s property right, which might require a structure in breach of it to be removed. Certainly, the courts have always seen mandatory injunctions as being more a matter of discretion, and, as well as potentially being more draconian in effect and leading to a waste of resources, in most cases the claimant could have sought a prohibitory interim injunction, which if granted would have avoided the need for a mandatory injunction requiring the structure to be removed.86 13.44 Where a covenant preventing the making of alterations to premises is contained in a lease, it has been said the court will be more ready than otherwise to require by mandatory injunction that the position be restored, as the premises remain ‘to greater or lesser extent the landlord’s own property’ – per Nourse LJ in Viscount Chelsea v Muscatt87 (where the lease was one of over 70 years). 13.45 In Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd88 the House of Lords stated that the ‘settled practice’ of the court is not to grant a mandatory injunction requiring the carrying on of a business, however (in that case, under a positive covenant that was enforceable because it was contained in a lease made between the claimant and the defendants). The House emphasised, however, that the grant or refusal of specific performance (there, of a clause in a lease requiring premises to be kept open for retail trade during certain specified hours) remained a matter for the discretion of the judge and that the settled

83

84 85 86 87 88

[1922] 1 Ch 502. This was one of three cases cited by Megarry J in support of his conclusions. It must be pointed out, however, that the other two cases were not only decided before Doherty v Allman, but were also cases where the claimant’s right to enforce the covenant was an equitable and not a legal right and accordingly were not directly relevant to the situation with which Lord Cairns’ (and Megarry J) were concerned. The cases were, Bowes v Law (1870) LR 9 Eq 636 (mandatory order for the demolition of an 11-foot wall and vinery built in breach of covenant refused) and Kilbey v Haviland (1871) 24 LT 353 (mandatory injunction to pull down a house built in a style which constituted a flagrant breach of covenant refused). Ibid, at p 512. Above, para 13.31. Though see footnote 25. [1990] WL 754255. [1998] AC 1.

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13.46  Remedies for breach of a restrictive covenant practice might be departed from in exceptional circumstances (though on the facts, the defendants’ obligation was not in fact sufficiently precise to be capable of specific performance). 13.46 Where there is a failure to seek an interim prohibitory order to prevent something, it could be seen as oppressive to grant a final injunction to remove it – as, indeed, in Jaggard v Sawyer,89 even the grant of a prohibitory final injunction was seen as being inappropriate by the Court of Appeal in view of such failure.90 13.47 It would not seem to be material whether the right infringed is legal or equitable and, accordingly, a consideration of further factors which are relevant to the granting of a mandatory injunction are dealt with below dealing with claims in equity and defences thereto.91

II: Claimant claiming to enforce the covenant in equity Final prohibitory or mandatory injunction 13.48 If the claimant is an equitable assignee of the benefit of the covenant, or if the defendant is not the original covenantor, then in either case there is no legal contractual right to enforce and the only right which exists is a right to enforce the terms of the covenant in equity. Lord Cairns’ dictum therefore does not strictly apply.92 Although it may still form the starting point, the ultimate availability of the remedy of injunction becomes a matter for equity in relation to the importance or otherwise of the actual performance of the equitable duty arising under the covenant.93 The following dicta indicate the court’s approach in the matter. 13.49 In Osborne v Bradley,94 Farwell J said: ‘Further, it is material to consider whether the claimant has a right to sue at law or merely in equity. If the case is one of a common law action on a covenant, I apprehend that nothing short of such conduct as would have supported an equitable plea under the Common Law Procedure Act, or before that Act would have justified the Court of Chancery in granting an injunction restraining the action, will suffice to bar the [claimant’s] right to sue on his covenant; for instances of such equitable pleas and such an injunction, see

89 90 91

[1995] 1 WLR 269. See paras 13.60 and 13.93 below. See below, para 13.48 et seq. Such cases as Wakebam v Wood (1981) 43 P&CR 40 and Jaggard v Sawyer [1995] 2 All ER 189 were, of course, concerned with a claimant claiming to enforce the covenant in equity and not at law and accordingly do not feature in the above consideration of Lord Cairns’ dictum in Doherty v Allman (1878) 3 App Cas 709 at 719 with which alone the above consideration of the law has been concerned. 92 The statement was made in the context of the position at law of the parties to a lease for 999 years. In Oxy Electric Ltd v Zainuddin [1991] 1 WLR 115, at 120G, Hoffmann J is reported as having said that the distinction seemed difficult to sustain on any rational ground and that it was seriously arguable that the principle in Doherty v Allman applied to the case before him where the defendant was not the original covenantor but a subsequent purchaser of the burdened land. 93 Which is signposted by such maxims as ‘He who seeks equity must do equity’, ‘He who comes to equity must come with clean hands’ (since equity is loath to give a bone to a dirty dog!), ‘Delay defeats equity’ and ‘Equity will not act in vain’. 94 [1903] 2 Ch 446, at pp 451–52.

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A final injunction to restrain or to remedy a breach of the covenant 13.51 Davies v Marshall95 and Williams v Earl of Jersey.96 But if the right of the covenantee is a right in equity only, different considerations may arise … because I think in Sayers v Collyer97 the Court of Appeal considered that something less than such acquiescence as would be a bar to all relief at law would enable a Court of Equity to give damages instead of an injunction98 … my view, founded on Sayers v Collyer [is] that there is a difference in the discretion of the Courts as to remedy according as the right of a [claimant] is a legal or an equitable right.’ 13.50 In Elliston v Reacher,99 Parker J said: ‘… though it may well be that if the [claimants’] right be equitable only, as in the present case, the Court will more readily award damages instead of an injunction, it is in my opinion clear from the case of Richards v Revitt100 that the absence of proof of substantial damages is not by itself sufficient to warrant that course being adopted. Of course in exercising its discretion the Court is bound to consider all the circumstances of the case ….’101 13.51 In Kelly v Barrett,102 Tomlin J said: ‘Whether or not proof of damage is essential, I think that in this class of case, where there is no privity of contract, the court has the right, and is bound, to exercise a judicial discretion with regard to granting an injunction … and it being clear there is no damage I do not think that damages in lieu of an injunction ought to be awarded.’ However, in the same case, Pollock MR said:103 ‘With regard to the last point—namely, whether the fact that no damage can be proved militates against Sir Spencer’s right to enforce the covenant— I do not desire to say anything. I certainly do not put my judgment on that ground ….’ And Warrington LJ said:104 ‘With regard to the last passage in the judgment of Tomlin J, as to the discretion of the Court to give damages in lieu of an injunction, it is unnecessary to say more than that I am not satisfied, having regard to the authorities to which we have been referred by counsel for the appellants, that those remarks are justified. They were not essential to the judgment, and so far they are immaterial.’

95 96 97 98

(1861) 31 LJCP 61. (1841) Cr&Ph 91. (1884) 28 ChD 103, 110. On this point, see also the remarks of Goff LJ in Shaw v Applegate [1977] 1 WLR 970 at p 979H. 99 [1908] 2 Ch 374, at p 395. 100 (1877) 7 ChD 224. 101 In Collins v Castle (1887) 36 ChD 243, Kekewich J had said in relation to a claimant whose right to sue was based on the existence of a building scheme (as was the case in Elliston v Reacher) at p 254: ‘When a man is suing on a covenant it is immaterial whether there is damage or not. A man is entitled to enforce that covenant, which is a species of property. In a case like this, however it is important to prove damage, but when a man has proved damage, then, to my mind, if he has got a right to sue, the right to relief follows’. 102 [1924] 2 Ch 379, at pp 397. 103 Ibid, at p 404. 104 Ibid, at p 411.

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13.52  Remedies for breach of a restrictive covenant 13.52 In Oxy-Electric Ltd v Zainuddin,105 Hoffmann J (as he then was) said (at p 120): ‘This plainly is a negative covenant, but Mr Cherryman distinguished Doherty v Allman on the ground that the defendant was not an original covenantor but a purchaser of the land subject to the burden of the covenant. For this distinction, which seems to me difficult to sustain on any rational ground, Mr Cherryman relied on the decision of Tomlin J. in Key v Barrett [124] 2 Ch 379. It is again not necessary for me to express an opinion on the point. I would only observe that the view of Tomlin J seems to have caused some surprise to at least two members of the Court of Appeal, and that it appears to be contrary to the views expressed by Fry J in Richards v Revitt (1877) 7 ChD 224, 226–227,106 and Farwell J in Osborne v Bradley [1903] 2 Ch 446107.’ This was merely a case concerned with an application to strike out the claim for an injunction, but Hoffmann J concluded: ‘It is sufficient therefore for me to say that it is in my judgment seriously arguable that the principle in Doherty v Allman (1878) 3 App Cas 709 applies to this case. Even if it does not, the authorities on Lord Cairns’s Act, and in particular the judgment in Shelfer’s case [1895] 1 Ch. 287108 to which I have already referred make it clear that the jurisdiction to refuse an injunction and grant damages instead ought to be exercised only in what Lindley LJ described as “very exceptional circumstances”.’ See also the comments of Lord Walker of Gestingthorpe in Fisher v Brooker at para 18, quoted above.109 13.53 It is considered that whilst a case can be made out that a claimant who relies on a claim in equity has not historically been able to claim to be entitled to a prohibitory injunction almost as of course (unlike where the claim is one at law), such remedy will usually be granted unless one of the defences considered below is established, or the court exercises its discretionary jurisdiction to award damages in lieu of an injunction.110 In practice, the courts are these days unlikely to draw any significant distinction between whether the rights sought to be enforced are legal or equitable rights, although, of course, where the remedy sought, or one of them, is equitable, all the principles relating to equitable relief will arise in relation thereto (which involves consideration of the defences set out below, at para 13.119 et seq).

105 [1991] 1 WLR 115. 106 ‘Another argument brought forward for the Defendant was that we have not here an express and direct contract, and that in a case where the Court proceeds on the ground of notice, substantial damage must be shewn in order that an injunction may be granted. The cases, however, do not support this contention. Wilson v Hart Law Rep. 1 Ch 463 was fully argued, and such an argument would undoubtedly have been used if it could have been maintained. There the [claimants] could not have sustained substantial damage, but an injunction was granted. That case, therefore, seems a direct authority that notice of a covenant puts the Defendant in the same position, and that the Court will proceed exactly as if he were a party to the covenant. I therefore overrule that objection, and the injunction must be granted’. 107 Though in relation to this, see para 13.49 above. 108 See para 13.92 below. 109 [2009] 1 WLR 1764; see para 13.33. 110 As to which, see below, para 13.81 et seq.

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Interim injunction in relation to a legal or equitable right 13.56

(3) AN INTERIM (‘INTERLOCUTORY’) INJUNCTION IN RELATION TO A LEGAL OR EQUITABLE RIGHT (1) General considerations relating to an interim prohibitory injunction 13.54 An application for such an injunction may be appropriate either in the case of a breach consisting of a prohibited user or where prohibited works of construction are threatened or have already been commenced. If there is no real doubt as to the entitlement of the applicant to enforce the covenant and that a breach of the terms of the covenant has occurred or been threatened, then it is likely to be desirable to apply as soon as possible for an interim injunction to restrain the breach. It may otherwise be more difficult to obtain an injunction later, particularly if instead of a prohibitory injunction a mandatory one to undo works will then be required. 13.55 However, if there is uncertainty concerning the applicant’s entitlement to the benefit of the covenant or as to whether the terms of the covenant have been infringed, then the distinct disadvantage of obtaining an interim injunction is that the order will almost always111 incorporate an undertaking in damages on the part of the applicant under which if the action is eventually lost and the interim injunction discharged, the applicant will be liable to pay such damages for loss suffered in consequence of the interim order as the court may order.112 This could be considerable. Unwillingness to accept the risk of having to pay such damages was one of the stated grounds for no interim injunction having been sought in Wrotham Park Estate Co v Parkside Homes Ltd.113 Similarly, in Shaw v Applegate,114 there was uncertainty as to whether there had been a breach of covenant. 13.56 However, the omission to seek interim relief pending trial may, if the breach is continued and consequential expenditure incurred by the defendant, affect the claimant’s chances of obtaining a permanent injunction at the trial since in considering whether such an injunction is appropriate, the court will have regard to the circumstances as they exist at the date of the hearing and not merely as they existed when the claim form was issued.115 A claimant who issues a claim asking for an injunction, however, cannot ordinarily be compelled by the defendant to seek an interim injunction for the purpose of affording the defendant, who does not wish to take the risk of flying in the face of the claim pending trial, the protection of a cross-undertaking in damages. 111 Except where the claimant is the Crown seeking to uphold a law for the protection of the public or is a local authority or other statutory body which is under a statutory duty to enforce the duty imposed upon the defendant: see Kirklees Borough Council v Wickes Building Supplies Ltd [1993] AC 227. It would, however, seem unlikely that the court would exercise its discretion to dispense with an undertaking in the ordinary case of the Crown or other public body seeking to enforce a restrictive covenant. 112 As to the measure of such damages, see the observations of Kekewich J in Fenner v Wilson [1893] 2 Ch 656, at p 658, cited by Ungoed-Thomas J in Hanning v Gable-Jeffreys Properties Ltd [1965] 1 WLR 1390. 113 [1974] 1 WLR 798, at p 810G. This reason was also given in Oxy Electric Ltd v Zainuddin [1991] 1 WLR 115. 114 [1977] 1 WLR 970. 115 See the two last-cited cases.

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13.57  Remedies for breach of a restrictive covenant Though the absence of an interim injunction may in some cases diminish the chances of a final injunction (which may then need to be a mandatory injunction) being granted, if the defendant continues with the work pending trial he is then on risk that if the claimant succeeds at trial the work done in the meantime may have to be undone. 13.57 In the earlier case of Blue Town Investments Ltd v Higgs and Hill plc,116 Browne-Wilkinson V-C made an order that the claimants’ claim for a permanent injunction should be struck out unless the claimants applied for an interim injunction restraining any further development so as to obstruct the claimants’ light and (as incidental thereto) gave a cross-undertaking in damages to pay for any damage caused to the defendants should the claimants not succeed at the trial. 13.58 However, in Oxy Electric Ltd v Zainuddin117 the claimant, whose land on an industrial estate had the benefit of a restrictive covenant against the erection of buildings other than a factory, warehouse, workshop or offices, commenced proceedings for an injunction to restrain the defendants (who were not the original covenantors) from constructing a community centre and mosque on the estate. The defendants applied for an order to strike out the claim for an injunction unless the claimant was willing to apply for an interim injunction and to support its cross-undertaking in damages with adequate security. Hoffmann J dismissed the application holding that a claimant who had a seriously arguable case but who did not wish to apply for interim relief because he did not want to assume the risk which would be involved by giving a cross-undertaking in damages should not be stifled in the pursuit of his action. Hoffmann J in the Oxy Electric case doubted the logic of this decision in Blue Town Investments Ltd118 and went on to distinguish it on the ground that in that case the claimants’ claim bordered upon the vexatious.119 13.59 In Gafford v Graham and Another,120 though (a case concerning restrictive covenants), the Court of Appeal held that ‘as a general rule, someone who, with the knowledge that he has clearly enforceable rights and the ability to enforce them, stands by whilst a permanent and substantial structure is unlawfully erected, ought not to be granted an injunction to have it pulled down’,121 and that, ‘the plaintiff’s omission to apply for interlocutory relief was an important factor to be taken into account by the judge when considering whether he ought to grant a mandatory injunction at trial for the demolition of the building’.122

116 [1990] 1 WLR 696. 117 [1991] 1 WLR 115. 118 Which was based on the decision of Templeman J in Clearbrook Property Holdings Ltd v Verrier [1974] 1 WLR 243. But the logic of the latter decision was questioned by Goulding J in Norman v Hardy [1974] 1 WLR 1048 (not referred to in the Oxy Electric case). 119 The fact that a claim is frivolous or vexatious will disqualify a claimant from being entitled to an interim injunction in an opposed application and the Vice-Chancellor’s decision gives rise to the question whether, if (in such a case) an application is made and not opposed or is submitted to, the court would, if it knew of the circumstances making the claim frivolous or vexatious, be entitled, under the rules of practice laid down by the House of Lords in American Cyanamid Co v Ethicon Ltd [1975] AC 396 (referred to below), grant an interim injunction. Since, however, an interim injunction will only bind the parties, there would appear to be no objection to an order being made (regardless of the merits) by consent. 120 (1999) 77 P&CR 73. 121 Ibid, at p 84. 122 Ibid, at p 83. See also Jaggard v Sawyer [1995] 1 WLR 269.

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Interim injunction in relation to a legal or equitable right 13.62 13.60 See also Jaggard v Sawyer,123 below at para 13.93, where one of the principal factors in the decision that it would be oppressive to grant an injunction and that there should instead be an award of damages in lieu (in circumstances where the defendants reasonably believed they were acting lawfully) was the claimant’s failure to seek interim relief. In relation to both Gafford and Jaggard, and as to an award of damages in lieu of an injunction, as ordered there, see further below, para 13.81 et seq. 13.61 In contrast to Gafford v Graham and Jaggard v Sawyer is the decision of the Court of Appeal in Mortimer v Bailey.124 Both those earlier decisions were taken into account, and it was emphasised that where a claimant does not seek an interim injunction, or delays in doing so, that is a factor that can be taken into account in weighing in the balance whether a final injunction should be granted. At the same time, however, it was also made clear there is no general rule that such a failure or delay should prevent the grant of a final injunction, and in that case it was held to be right to grant a final mandatory injunction for the demolition of an extension to the defendants’ house notwithstanding the claimants had not applied for an interim injunction to stop the building of it until it was almost complete, at which stage an interim injunction had been refused. All was said to depend on the facts of the individual case and it was considered appropriate to grant the injunction having regard to the fact the defendants had proceeded in full knowledge of the covenant and had known from an early stage of the claimants’ objections and intention to commence proceedings.125

(2) The principles in relation to the grant of an interim injunction 13.62 The general principles for the grant of an interim injunction were considered by the House of Lords in American Cyanamid Co v Ethicon Ltd.126 These (taking into account subsequent cases referred to in the footnotes) are as follows: (1) The claimant must first satisfy the court that there is a serious question to be tried (in the sense that the claim must not be frivolous in law127 or fact128). 123 [1995] 1 WLR 269, CA. 124 [2005] 2 P&CR 9 – a right to light case. 125 Of course, in an exceptional case, the claimants may not be aware of anything happening at all until work is at an advanced stage, or even complete. In one case the author dealt with at the junior bar, the claimants left their detached house to go on holiday and came back to find they now had what appeared to be a semi-detached house, with a two storey, roofed extension of the adjoining property apparently connected to it, and, in fact, lying within what was discovered to be a few millimetres of the house. Although in breach of relatively limited legal rights, a mandatory injunction was readily granted for its removal, together with the staircase and other features it contained, necessitating consequent reconfiguration of the rest of the defendants’ house in line with its original form, substantial other internal alterations having also been made on the basis of the extension. 126 [1975] AC 396. The case concerned the grant of an interim injunction for infringement of a patent but Lord Diplock, with whose speech the other four Lords of Appeal agreed, stated that such a grant was governed by the same principles as in other actions. 127 As in Fellowes & Son v Fisher [1976] QB 122, CA (question of validity of a covenant in restraint of trade). 128 In regard to this requirement, Lord Diplock expressly declared that the former supposed rule of practice that the claimant must establish a prima facie case of probable success at the trial (a rule which was applied by the Court of Appeal in the instant case) did not exist. For an instance of

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13.63  Remedies for breach of a restrictive covenant (2) If so, then the court must go on to consider129 whether, if the claimant was to succeed at trial in establishing his claim to a permanent injunction, he would be adequately compensated by an award in damages for the loss he would have sustained as a result of the defendant continuing to do that which it was sought to restrain by an interim injunction. If damages would be an adequate remedy and the defendant would be in a position to pay them, the interim injunction should not normally be granted. (3) If damages would not provide an adequate remedy for the claimant, the court should then consider whether if the defendant was to succeed at trial he would be adequately compensated (pursuant to the undertaking in damages the claimant would give in return for the grant of the injunction) for the loss he would have sustained by being prevented from doing that which he was entitled to do until trial. If damages would be an adequate remedy and the claimant would be in a position to pay them, there would be no reason to refuse an interim injunction. (4) If not, the final stage of the exercise is that the court has to decide what should happen in the meantime bearing in mind all the circumstances, and where other factors appear to be evenly balanced, it may be prudent to simply preserve the status quo. 13.63 Other factors that might be relevant at the final stage would include such things as: (a) the relative strength of each party’s case as revealed by the evidence adduced on the hearing of the application130 (in so far as that can be judged, bearing in mind it will be in written form only and that, as Lord Diplock said, ‘The court is not justified in embarking on anything resembling a trial of the action on conflicting [witness statements] in order to evaluate the strength of either party’s case’); (b) whether the temporary injunction sought is to prevent the defendant from commencing an alleged breach of covenant (in which case the likely effect of an interim injunction in the event of the defendant succeeding at the trial is, apart from any financial losses not compensatable by the undertaking in damages, merely to postpone the date at which he is able to embark on his intended course of action); or whether the injunction is to stop an alleged breach which has already been commenced, such as a covenant

circumstances which will make a claim for an injunction vexatious, see Blue Town Investments Ltd v Higgs & Hill plc [1990] 1 WLR 696 (expression of willingness to compromise followed by inactivity for four months after building works had commenced and continued) although in this case the claimant wished to avoid applying for an interim injunction. See further thereon, above, para 13.57. It is clear both from the language of Lord Diplock and from the decisions in the Oxy Electric case and Mothercare Ltd v Robson Books Ltd [1979] FSR 466, that the expression ‘frivolous and vexatious’ in the present context is to be read in a different sense to that in which the phrase appeared in relation to striking out under RSC Order 18, rule 19 (prior to the CPR). In the present context, those words are related to whether there is ‘a serious question to be tried’ (per Lord Diplock) or ‘a real prospect of succeeding’ (per Lord Diplock and also Megarry V-C in Mothercare Ltd v Robson Books Ltd, above, at p 471). 129 Unless there is no serious defence to be tried (in the sense of there merely being one that is merely frivolous or vexatious), in which case there is no basis for withholding the injunction: Patel v Smith Ltd [1987] 1 WLR 853 (CA). 130 Per Lord Diplock in American Cyanamid Co v Ethicon Ltd [1975] AC 396. And see Fellowes & Son v Fisher [1976] QB 122, CA; Hubbard v Pitt [1976] QB 142.

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Interim injunction in relation to a legal or equitable right 13.64 not to carry on business (in which case to interrupt him might cause much greater inconvenience since, if successful at the trial, he would have to start again).131 Judging ‘the balance of convenience’ in this way means judging ‘balance of the risk of doing an injustice’132 or ‘where the balance of justice lies’.133 13.64 Though the matters above form the normal steps to be taken by the court in judging whether the balance of convenience is in favour of granting or withholding the injunction pending trial, in an appropriate case, there is, however, nothing to prevent the court from taking into account any other practical features of the case. In particular, where the grant or refusal of an injunction would mean there was effectively nothing left to proceed to trial, the court may have to look to the merits of the substantive case.134 In NWL Ltd v Woods,135 Lord Diplock stated: ‘… when properly understood, there is in my view nothing in the decision of this House in American Cyanamid v Ethicon Ltd to suggest that in considering whether or not to grant an interlocutory injunction the judge ought not to give full weight to all the practical realities of the situation to which the injunction will apply. American Cyanamid Co v Ethicon Ltd, which enjoins the judge on an application for an interlocutory injunction to direct his attention to the balance of convenience as soon as he has satisfied himself that there is a serious question to be tried, was not dealing with a case in which the grant or refusal of an injunction at that stage would, in effect, dispose of the action finally in favour of whichever party was successful in the application, because there would be nothing left on which it was in the unsuccessful party’s interest to proceed to trial.’136 131 See Fellowes & Son v Fisher [1976] QB 122, CA. This contrasts with the position in the case of a positive covenant which requires a particular use of land to be discontinued at a date subsequent to the date of the covenant and nothing is done by that date. In such a case, ‘the balance of convenience is decidedly in favour of enforcing a clear covenant that the company is clearly breaking’ and so altering the status quo: per Fox LJ in Avon County Council v Millard (1985) 50 P&CR 275, 281. 132 Per May LJ in Cayne v Global Natural Resources plc [1984] 1 All ER 225, at p 237h. In NWL Ltd v Woods [1979] 1 WLR 1294, at p 1306, Lord Diplock said: ‘In assessing whether what is compendiously called the balance of convenience … in [applications for] interlocutory injunctions in actions between parties of undoubted solvency the judge is engaged in weighing the respective risks that injustice may result from his deciding one way rather than the other at a stage when the evidence is incomplete’. 133 Per Lord Donaldson MR in A-G v Barker [1990] 3 All ER 257, at p 260g. 134 See Lansing Linde Ltd v Kerr [1991] 1 WLR 251, CA (12-month period of restraint on former employee; injunction refused since worldwide breadth of restraint would probably not be upheld at the trial); see also M&E Global (Staffing) Solutions Ltd v Tudge [2016] EWHC 597 (QB); cf Le Puy Ltd v Potter [2015] EWHC 193 (QB), where it was considered a speedy trial could take place halfway through the restraint period of 12 months. Where the restraint may or may not (depending on whether certain events take place) expire before the trial takes place, this will be no answer to an interim injunction since the defendant may at any time apply to discharge or vary such an injunction: see Avon County Council v Millard (1985) 50 P&CR 275, at p 280. Many of the cases in relation to this aspect are employment law cases, but the general principle to which this footnote relates applies equally to land covenant cases. 135 [1979] 1 WLR 1294, at p 1306. The passage quoted was cited and applied by the Court of Appeal in Cayne v Global Natural Resources plc [1984] 1 All ER 225, at p 238. 136 This fact will not, however, necessarily be a bar to an interim injunction where there is no arguable defence: see Manchester Corpn v Connolly [1970] Ch 420 (a decision of the Court of Appeal in which the principal judgment was delivered by Lord Diplock who was then already a Lord of Appeal in Ordinary).

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13.65  Remedies for breach of a restrictive covenant 13.65 Another circumstance is where the claimant seeks a mandatory injunction requiring the carrying on of a business by the defendant. In Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd,137 the House of Lords stated that the ‘settled practice’ of the court is not to grant such an injunction, though the settled practice might be departed from in exceptional circumstances. That case concerned a final order, but the same point applies to interim injunctions: see Flogas v Warrington (t/a Robin Sutton Gases and Calor Gas Ltd).138 Under American Cyanamid the steps at (1) to (3) above are expected to be applied by the court in the absence of some special factor, however. 13.66 In the American Cyanamid case itself, Lord Diplock twice said that the remedy is discretionary, though.139 In Cayne v Global Natural Resources plc140 May LJ said, ‘I think that one must be very careful to apply the relevant passages from Lord Diplock’s familiar speech in the Cyanamid case not as rules but only as guidelines, which is what I am certain Lord Diplock intended them to be’. 13.67 As an alternative to granting an interim injunction, the court may, if it considers that the matter in dispute can be better dealt with by an early trial, make an order for a speedy trial and may make such order as respects the period before trial as the justice of the case requires. Similarly, if it grants an interim injunction, the court may likewise make an order for a speedy trial if it considers it appropriate to do so – eg if the harm to the defendant in the meantime, though compensatable eventually, may be great, or the period of restraint is so short that the injunction will otherwise effectively be the end of the action.141 The court may give directions for trial when it grants or refuses the interim injunction.142

(3) Added caution in relation to interim mandatory injunctions 13.68 There is no doubt that the court has jurisdiction to grant a mandatory injunction on an interim application as well as at the trial143 but at the interim stage, when the final result of the case cannot be known, and the court has to do the best it can, it is likely in most cases144 to be very cautious.

137 [1998] AC 1. 138 [2007] EWHC 1303 (QB). 139 See, especially, the judgments of Browne LJ and Sir John Pennycuick in Fellowes & Son v Fisher [1976] QB 122 and a note in (1975) 91 LQR 158. In that case, counsel invited the Court of Appeal to give guidance about how Lord Diplock’s speech should be applied, but the court declined to do so, contenting itself with highlighting certain difficulties. 140 [1984] 1 All ER 225, at p 237f. 141 See, eg Le Puy Ltd v Potter [2015] EWHC 193 (QB), where there was an alleged restraint period (in an employment case) of 12 months and a speedy trial was ordered, which would then take place halfway through the period. 142 As it did on granting the interim injunction in Le Puy v Potter. 143 In Morris v Grant (1875) 24 WR 55, an interim injunction was granted requiring the defendant to remove a porch to his house which he had built in flagrant breach of a covenant restricting certain buildings and alterations, the infringement being clear and the claimant having made the application promptly. 144 Depending on the nature of what is sought.

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Interim injunction in relation to a legal or equitable right 13.72 In Shepherd Homes Ltd v Sandham,145 Megarry J said at p 351: ‘… on motion [ie an interim application146], as contrasted with the trial, the court is far more reluctant to grant a mandatory injunction than it would be to grant a comparable prohibitory injunction. In a normal case the court must, inter alia, feel a high degree of assurance that at the trial it will appear that the injunction was rightly granted; and this is a higher standard than is required for a prohibitory injunction.’ Though this statement was made before the House of Lords case of American Cyanamid, in Locabail International Finance Ltd v Agroexport (‘The Sea Hawk’)147 the Court of Appeal through Mustill LJ148 stated that ‘the statement of principle by Megarry J in relation to the very special case of the mandatory injunction is not affected by what the House of Lords said in the Cyanamid case’. 13.69 It was, however, also pointed out in the Sea Hawk case that the matter before the court was not only an application for a mandatory injunction, but an application for a mandatory injunction which, if granted, would have amounted to the grant of a major part of the relief claimed in the action. The Court said, ‘Such an application should be approached with caution and the relief granted only in a clear case’. This does not mean that the claimant must always have a strong case, however, if a mandatory injunction is sought. 13.70 As Hoffmann J pointed out in Films Rover International Ltd v Cannon Film Sales Ltd,149 whether the injunction was mandatory or prohibitory, the test is whether the injustice that would be caused to the defendant if the claimant was granted an injunction and failed at the trial outweighs the injustice that would be caused to the claimant if an injunction was refused and he succeeded at trial. 13.71 In a normal case where an interim mandatory injunction is sought, the court will want to feel a high degree of assurance that the claimant will succeed at trial before such an injunction is granted, but in an exceptional case it may be right for the injunction to be granted even if the court did not feel such a high degree of assurance, because withholding the injunction would carry a greater risk of injustice to the claimant than granting it would do to the defendant in the event of success at trial. In the Films Rover International case it was held (in the context of a film distribution contract) there would be a much greater risk of injustice being caused if an injunction was withheld and the claimant was right than if the injunction was granted and the claimant did not succeed at trial.

Enforcement differences between a prohibitory and a mandatory injunction 13.72 Where an injunction, once granted, is not complied with, there is also a difference in the enforcement action which can be taken as between a prohibitory and a mandatory injunction. 145 146 147 148 149

[1971] Ch 340. As it is now termed following the introduction of the CPR. [1986] 1 WLR 657. Ibid, at p 664. [1987] 1 WLR 670.

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13.73  Remedies for breach of a restrictive covenant In the case of both types, the injunction may be enforced by a writ of sequestration of assets or by an order of committal for contempt under CPR, rule 81.4, but in the case of a mandatory injunction, an application may be made under CPR, rule 70.2A for a direction that the party by whom the injunction was obtained, or some other person appointed by the court, be at liberty to do the act required to be done, at the cost of the disobedient party.

(4) DAMAGES IN ADDITION TO OR IN LIEU OF (ie IN SUBSTITUTION FOR) AN INJUNCTION 13.73 Since an award of damages is a permanent form of relief, the question of an award of damages in addition to, or in lieu of, an injunction can only arise in connection with the exercise of the court’s jurisdiction to award a permanent or final injunction.

The jurisdiction to award such damages 13.74 Prior to Lord Cairns’ Act 1858,150 the only remedy available in the Court of Chancery for breach of a restrictive covenant was the remedy of injunction. Damages could be obtained only in a court of common law and then only if the claimant’s claim to enforce the covenant was based on a legal right.151 However, by section 2 of Lord Cairns’ Act it was provided as follows: ‘In all cases in which the Court of Chancery has jurisdiction to entertain an application for an injunction against a breach of any covenant, contract or agreement, or against the commission or continuance of any wrongful act, or for the specific performance of any covenant, contract or agreement, it shall be lawful for the same court, if it shall think fit, to award damages to the party injured, either in addition to or in substitution for such injunction or specific performance, and such damages may be assessed in such manner as the court shall direct.’ The section accordingly makes it a condition precedent to the award of such damages that the claimant either obtains an injunction (in the case of damages awarded ‘in addition’) or is prima facie entitled to an injunction (in the case of damages awarded ‘in substitution’) in the sense that none of the defences dealt with below defeats his claim thereto in limine.152 13.75 Lord Cairns’ Act was repealed by the Statute Law Revision and Civil Procedure Act 1883 but the provisions of section 5 of that Act preserved the jurisdiction,153 and although section 5 of the 1883 Act was itself repealed by the Statute Law Revision Act 1898, the jurisdiction continued.154 The jurisdiction is

150 Ie, the Chancery Amendment Act 1858. 151 As to which, see above, para 13.30. 152 See Kelsey v Dodd (1881) 52 LJ Ch 34; Sayers v Collyer (1884) 28 ChD 103, at p 110. For defences to an action for an injunction as an equitable remedy, see below, para 13.119 et seq. 153 See Sayers v Collyer (1884) 28 ChD 103. 154 See the speech of Viscount Finlay in Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 851, at p 862.

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Damages in addition to or in lieu of an injunction 13.78 now formally confirmed by section 50 of the Senior Courts Act 1981155 which provides that: ‘Where the Court of Appeal or the High Court has jurisdiction to entertain an application for an injunction or specific performance, it may award damages in addition to or in substitution for, an injunction or specific performance.’156 13.76 Unlike section 2 of Lord Cairns’ Act, section 50 of the 1981 Act does not conclude with any words relating to the manner of assessment, but in Johnson v Agnew,157 Lord Wilberforce commented that: ‘The wording of section 2 that damages ‘may be assessed in such manner as the court shall direct’ … clearly refers only to procedure.’ Accordingly, the absence of those words would appear not to affect the continued applicability of the pre-1982 methods of assessment.

The court’s discretion 13.77 By section 2 of Lord Cairns’ Act the court was empowered to award damages in addition to or in substitution for an injunction ‘if it shall think fit’158 and the principles applicable differ according to whether the question is as to damages in addition to an injunction or in substitution for an injunction.

(1)  Damages in addition to an injunction 13.78 In this case, the need for this jurisdiction to be exercised will (since the merging of jurisdiction at law and in equity in the single High Court) usually only arise where the claimant is relying solely upon an equitable right to enforce the covenant, and not a legal right.159 Damages may be awardable under the Act160 where none could be awarded at common law.161 Reported cases are rare as to how the discretion is to be exercised of awarding damages in addition to an injunction,162 but where damage has been suffered as a result of a breach of covenant and an injunction is granted to restrain any further

155 Which came into operaion on 1 January 1982. 156 The county court has the like jurisdiction in cases within its province: cf the observations of Sir Thomas Bingham MR in Jaggard v Sawyer [1995] 1 WLR 269 at 277A. 157 [1980] AC 367, 400D. 158 Only the permissive word ‘may’ appears in s 50 of the Senior Courts Act 1981, but this is clearly wide enough to perpetuate the pre-1982 position. 159 For the distinction, see above, para 13.30. It was established in Eastwood v Lever (1863) 4 De GJ&Sm 114, per Turner LJ at p 128 and Alexander v Mansions Pty Ltd (1900) 16 TLR 431 that Lord Cairns’ Act gave the Court of Chancery power to award damages in addition to or in lieu of an injunction in all cases and was not confined to cases in which the claimant had a legal claim entitling him to damages in the common law courts. The Act was not, therefore, merely procedural. See, also, the speech of Lord Sumner (dissenting, but not on this point) in Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 851, at p 869 and of Lord Wilberforce in Johnson v Agnew [1980] AC 367, at p 400B–C. 160 Grant v Dawkins [1973] 1 WLR 1406 (a case of damages under the Act in addition to specific performance). 161 As in Oakacre Ltd v Claire Cleaners (Holdings) Ltd [1982] Ch 197 (a case of damages in addition to specific performance). 162 But see, as to damages in addition to specific performance, Grant v Dawkins [1973] 1 WLR 1406 and Oakacre Ltd v Claire Cleaners (Holdings) Ltd [1982] Ch 197.

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13.79  Remedies for breach of a restrictive covenant breach, then there would normally appear to be no reason for the court not also awarding damages under the Act for the past breach.163 13.79 As to the measure of such damages, if the claimant has a right to claim damages both at common law164 and under the Act then it would now seem that the method of assessing such damages is to be treated as the same in either case.165 Further, even if the claimant’s claim is exclusively equitable and thus confined to a claim under the Act, unless there is good reason for not doing so, then prima facie ‘equity follows the law’ and will act by analogy to common law principles.166 13.80 The underlying common law principle applicable to breach of covenant is that ‘where a contract is broken, the injured person is, so far as money can do it, to be placed in the same position with respect to damages as if the contract had been performed.’167 This focuses attention on the loss suffered by the claimant as a result of the breach and disregards any benefit accruing to the defendant from the exploitation of his breach.168

(2)  Damages in lieu of (ie in substitution for) an injunction 13.81 The power of the court to grant damages in lieu of an injunction wherever there is jurisdiction to grant a final injunction. Accordingly, when the remedy of an injunction is not available because one of the defences (below) totally bars the claim, damages in lieu of an injunction will not be available. In contrast, where it would be possible for the court to grant an injunction but it would be wrong to do so because it would be inequitable to grant that remedy, damages in lieu may be granted (see, eg Jaggard v Sawyer169). 13.82 The court has historically been described as having less discretion to award damages in lieu of an injunction where the claimant relies on a legal claim. Thus, in Osborne v Bradley,170 Farwell J said: ‘… I think in Sayers v Collyer171 the Court of Appeal considered that something less than such acquiescence as would be a bar to all relief at law would enable a Court of Equity to give damages instead of an injunction … my view, founded on Sayers v Collyer [is] that there is a difference in the discretion of the Courts as to remedy according as the right of a [claimant] is a legal or an equitable right.’

163 See Hindley v Emery (1865) 11 Jur NS 874. 164 As to when the claimant will have a right to damages at common law, see above, para 13.30 and below, para 13.184 et seq. 165 See Johnson v Agnew [1980] AC 367, per Lord Wilberforce at p 400G. See further, below, para 13.101 et seq. 166 See the observations of Megarry J in Wroth v Tyler [1974] Ch 30, at p 60A–60B. The case was one of damages in lieu of specific performance. 167 Per Blackburn J in Lock v Furze (1866) 15 LT 161, at p 162; Engell v Fitch (1869) LR 4 QB 659, at p 666. 168 Cf damages in lieu of an injunction: paras 13.102–13.103 below. 169 [1995] 1 WLR 269. 170 [1903] 2 Ch 446, at p 452. 171 (1884) 28 ChD 103, 110.

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Damages in addition to or in lieu of an injunction 13.86 13.83 However, it is clear that even where the claim is based on a legal right, the principle set out by Lord Cairns in Doherty v Allman172 does not exclude the discretion of the court, conferred by statute, to award damages in lieu of an injunction and such awards were made in the case of such claimants by Astbury J in Sharp v Harrison173 and by the Court of Appeal in Shaw v Applegate.174 Even where based on a legal right, the claimant must first establish a case for relief, however, not only by proving his legal right and an actual or threatened infringement of it by the defendant, but, by also overcoming all equitable defences, such as estoppel which serve to bar the claim altogether:175 see Jaggard v Sawyer.176 If he succeeds in doing this, he is prima facie entitled to an injunction, but the court may nevertheless in its discretion withhold injunctive relief and award damages instead.177 13.84 In Shaw v Applegate,178 the factors which influenced the Court of Appeal to award damages in lieu of an injunction included (a) the claimant’s delay in allowing the breach to continue over a period of six years during which time the defendant built up his amusement arcade business (a business prohibited by the covenant), (b) the fact that when the action was eventually launched, no application was made for an interlocutory injunction and (c) the fact that an injunction against carrying on the business would, to a certain extent, operate in a mandatory fashion by involving him in his dismantling a large number of machines and in consequence probably subjecting him to considerable loss. The order made was for damages in lieu of an injunction, the case being remitted to the Chancery Division for an inquiry as to damages. 13.85 In Sharp v Harrison,179 the special reasons for a mandatory injunction being refused, and only nominal damages awarded, included an offer by the defendant to give certain undertakings the effect of which would be ‘no damage of any sort or kind suffered by the plaintiff’ as a result of his breach of covenant in constructing a window in a wall. But in addition, there was a substantial practical difficulty in the way of granting a mandatory injunction for the bricking up of the window, namely the fact that the flat in which the window was situated had been let on a lease for a term of five years to a person who was not a party to the action and there was no evidence to show whether the lessee took with notice of the covenant. 13.86 In Sefton v Tophams Ltd,180 the fact that the grant of an injunction would not do the claimant (whose object was to secure the continuance of horse racing 172 (1878) 3 App Cas 709, at p 720, considered above at para 13.31 et seq. 173 [1922] 1 Ch 502. 174 [1977] 1 WLR 970. See, also, Sefton v Tophams Ltd [1965] Ch 1140, where Stamp J at first instance (before whom alone the question of damages in lieu of an injunction was argued) said at p 1162, ‘It is, however, common ground that under s 2 of the [Chancery Amendment] Act usually referred to as Lord Cairns’ Act, this court has power, and also no doubt a duty in a proper case, to award damages for a threatened wrong in substitution for an injunction …’. In the Court of Appeal [1965] Ch 1170, Tophams Ltd did not rely on Lord Cairns’ Act, but had they done so, Sellers LJ expressed the view that there were factors ‘which would have otherwise been relevant and not without their persuasion’. 175 Though not where, in contrast, the estoppel, or laches, acquiescence, or whatever, merely means an injunction is inappropriate: see below, para 13.132 et seq. 176 [1995] 1 WLR 269, at p 287F. 177 Ibid. 178 [1977] 1 WLR 970. 179 [1922] 1 Ch 502, at 516. 180 [1965] Ch 1140.

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13.87  Remedies for breach of a restrictive covenant on the Aintree racecourse) any good (since non-use of the land would comply with the covenant), was regarded by Stamp J as an insufficient reason to justify withholding an injunction; but although in the Court of Appeal the defendants expressly disclaimed any reliance on Lord Cairns’ Act, Harman LJ appears to have thought that some weight might attach to the point in that context.181 In each of the last three cases referred to the claimant’s claim to enforce the covenant was based on a legal right. In the following cases, the claimant’s claim was based on an equitable right. 13.87 In Osborne v Bradley,182 it appears that the claimant’s concern was to obtain a money payment in return for a release of a covenant to permit the defendant to convert his two houses into shops, but negotiations for such a payment having broken down, the claimant commenced an action for an injunction but indicated to the court that he would be willing to accept £125 in lieu of an injunction. The covenant not being enforceable at law, the jurisdiction of the court to award damages was conditional on his establishing a prima facie right to an injunction, which was thus not being sought for its own sake but merely as a means to obtaining an award of damages. Farwell J considered the claim for an injunction on its merits, concluded that the claim was well founded and awarded damages in the sum of £125. This case therefore appears to justify the conclusion that it is open to a claimant who cannot claim damages at common law,183 and who does not wish to obtain an injunction, to confine his claim to one of damages in lieu of an injunction under the Act.184 13.88 In Achilli v Tovell,185 a mandatory injunction was granted to a claimant claiming (as against the company defendant) to enforce a covenant in equity requiring that defendant to pull down so much of a wall 19 feet 6 inches high as constituted a breach of the covenant. At the hearing, the claimants refused the defendants’ offer to pay damages in lieu of an injunction of an amount which would have provided full compensation for the damage suffered by the benefited land (an adjoining cottage) and the court, holding that they could not be compelled to do so, awarded a mandatory injunction. Accordingly, the making by the defendants of an offer of full compensation to an unwilling claimant is not sufficient to amount to ‘some special case’. In the absence of such a case, it was no part of the object of Lord Cairns’ Act ‘to turn that Court [of Chancery] into a tribunal for legalising wrongful acts; or in other words, the Court has always protested against the notion that it ought to allow a wrong to continue simply because the wrongdoer is able and willing to pay for the injury he may inflict’.186

181 [1965] Ch 1140, at p 1195D. The same might also be inferred from the observations of Sellers LJ at p 1186E. 182 [1903] 2 Ch 446. 183 Or, perhaps, who could so claim but does not wish to do so because he has sustained no loss capable of giving rise to an award of liquidated damages at common law. In the common law tort case of Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287, Lindley LJ said that an award of damages in lieu of an injunction would be appropriate in (inter alia) ‘cases in which a claimant has shown that he only wants money’. 184 Usually (but not invariably) a claimant will be better off if he obtains an injunction and then bargains for its non-enforcement. In all the other cases, it has been the defendant who has sought to persuade the court that, if the claimant is prima facie entitled to an injunction, the case is fit for the award of damages in lieu under Lord Cairns’ Act 1858. 185 [1927] 2 Ch 243. 186 Per Viscount Finlay (with whose speech the Earl of Birkenhead agreed and Lord Dunedin concurred) in Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 851, at p 861.

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Damages in addition to or in lieu of an injunction 13.90 Further, the fact that the defendants had bona fide but mistakenly thought that they had obtained the authority of the claimant’s agent to build the wall, so that the breach was not flagrant, had no effect on the outcome. Astbury J in the course of his judgment went so far as to say: ‘In my opinion I have no jurisdiction or discretion to force the claimant Achilli against her will to accept damages in lieu of an injunction. On the authorities she is plainly entitled to a mandatory order, if she asks for it’. 13.89 However, Watkins LJ in Wakeham v Wood castigated this statement187 as one with which ‘… I profoundly disagree and would not in any circumstances consent to be guided by … The court in my opinion obviously has jurisdiction and undoubtedly has a discretion to award damages in lieu of an injunction …’. Nevertheless, the Court of Appeal in that case was unanimous in granting a mandatory injunction. In so doing the Court of Appeal reversed the decision of the county court judge who had awarded damages in lieu of a mandatory injunction, Waller LJ saying:188 ‘The authorities show that in the case of express negative covenants, that is where an agreement has been made that a particular thing is not to be done, an injunction will be granted to restrain a breach. And where a defendant commits a breach of a negative covenant with his eyes open and after notice the court will grant a mandatory order, although there is and must be some limitation to this practice: see per Astbury J in Sharp v Harrison189 and in that case the judge found reasons for awarding damages.’ Examples of cases concerning equitable claims190 where a special case was made out for damages being awarded instead an injunction are Baxter v Four Oaks Properties Ltd,191 Wrotham Park Estate Co v Parkside Homes Ltd192 and Jaggard v Sawyer.193 13.90 In Baxter, an injunction was sought to restrain the defendants from using a newly-constructed three-storey block of nine self-contained flats in breach of a covenant that no dwelling house or other building should be used otherwise than as a private residence. The defendants had mistakenly thought (as they had been advised) that so long as each flat was occupied as a private residence (as was intended) there would be no breach of covenant. The writ was issued in March 1964 and a motion for an interlocutory injunction was heard in April. By that time work had progressed above the first floor. No order was made on the motion194 and the building was completed in the autumn. The hearing of the action took place in December, at which only a prohibitory injunction was sought that the defendants do not use the building as flats. In refusing an

187 (1981) 43 P&CR 40, 45–46. 188 Ibid, at p 43. Watkins LJ and Eastham J (who also delivered their own judgments) expressed themselves as being in agreement with Waller LJ’s judgment. 189 [1922] 1 Ch 502. 190 Sharp v Harrison, above, was concerned with a claimant whose claim was legal and it has already been considered under that heading above. 191 [1965] Ch 816. 192 [1974] 1 WLR 798. 193 [1995] 1 WLR 269. 194 Although the interim proceedings are not reported, it seems clear from the decision of Cross J at the trial that the reason for no order being made was that there was no covenant against erecting a building other than a private residence but only a covenant against using any building otherwise than for such purpose.

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13.91  Remedies for breach of a restrictive covenant injunction and granting damages in lieu Cross J took into account that (a) if an injunction were granted the claimants would almost certainly sell a release of it to the defendants so that in the end the claimants would only get damages, although no doubt more than they would get if no injunction were granted;195 (b) the claimant most closely affected had sold her house;196 (c) the other claimants would be far less affected by the user of the block of flats; and (d) the defendants did not deliberately act in a way which they knew would involve a breach of covenant.197 13.91 In Wrotham Park Estate Co v Parkside Homes Ltd,198 14 houses had been built in breach of a covenant restricting building except in accordance with a layout plan approved by the claimants.199 The writ claiming a mandatory injunction was served before any substantial construction had taken place but no application was made for interlocutory relief and the defendants completed the construction before the date of the hearing. At that date, all 14 houses had been purchased by the individual defendants, all but two of whom had ‘aided and abetted the breach’ and each of whom had the benefit of an indemnity insurance policy insuring against the risk of the covenant being enforceable by mandatory injunction. Any hardship resulting from the grant of a mandatory injunction was therefore greatly mitigated. Whilst holding that ‘it is no answer to a claim for a mandatory injunction that the claimants, having issued proceedings, deliberately held their hand and did not seek the assistance of the court for the purpose of preserving the status quo’, Brightman J nevertheless refused a mandatory injunction and awarded damages in lieu. The grounds for doing so were as follows: (a) ‘a claimant is not entitled “as of course” to have everything pulled down that was built after the issue of the writ’; (b) ‘It would … be an unpardonable waste of much needed houses to direct that they now be pulled down’;200 (c) ‘No damage of a financial nature has been done to the claimants by the breach of the layout stipulation’; (d) ‘It is totally unnecessary to demolish the houses in order to preserve the integrity of the restrictive covenants imposed on the rest of [the burdened land]’. It may be observed that grounds (a), (b) and (d) are by their nature relevant only in the context of mandatory injunctions, and ground (c) is not a reason for withholding a prohibitory injunction.201

195 This was the position in Achilli v Tovell, above, where an injunction was granted, and this factor is clearly not sufficient by itself. 196 As to the effect of which on the cause of action, see Powell v Hemsley [1909] 2 Ch 252. 197 As to the measure of damages awarded, see below, para 13.110. 198 [1974] 1 WLR 798. 199 The fact that it was the claimants’ approval which was relevant (although they were not the original vendors) was conceded. In relation to this, see above, para 11.81 et seq. 200 At this point, Brightman J added ‘… and I have never had a moment’s doubt during the hearing of this case that such an order ought to be refused’—thus suggesting that this was the overriding factor. See also on this point the easement case of Bracewell v Appleby [1975] 1 All ER 993 (Graham J). 201 Richards v Revitt (1877) 7 ChD 224; Elliston v Reacher [1908] 2 Ch 374, per Parker J at p 395, cited above at para 13.50.

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Damages in addition to or in lieu of an injunction 13.93 13.92 In Federated Homes Ltd v Mill Lodge Properties Ltd202 the court declined to award damages in lieu of an injunction restraining the building of 32 more dwellings than a restrictive covenant allowed. The short ground of this decision was that three out of the four conditions referred to by A L Smith LJ in Shelfer v City of London Electric Lighting Co203 had not been shown to be satisfied. These conditions were expressed by A L Smith LJ in that case in the following words:204 ‘In my opinion, it may be stated as a good working rule that— (1) if the injury to the [claimant’s] rights is small, (2) and is one which is capable of being estimated in money, (3) and is one which can be adequately compensated by a small money payment, (4) and the case is one in which it would be oppressive to the defendant to grant an injunction, then damages in substitution for an injunction may be given.’ These words were, of course, spoken in the context of an action for an injunction to restrain a common law nuisance and, until the Federated Homes case, had not featured in the context of the consideration of the question of damages in lieu of an injunction to restrain a breach of a restrictive covenant.205 13.93 In Jaggard v Sawyer,206 the facts lent themselves to the award of a small sum in lieu of a prohibitory injunction. The county court judge below had awarded the sum of £694.44 in lieu of granting a prohibitory injunction to restrain the defendants from a continuing breach of a restrictive covenant restricting the use of land to that of a private garden (the breach consisting of use of a driveway across the garden as a means of access to a house built on other land), and trespass over a strip of private roadway belonging to the claimant. In upholding the order of the county court judge both Sir Thomas Bingham MR and Millett LJ207 referred in their judgments to the four elements of A L Smith LJ’s ‘guidance’ or ‘checklist’ and applied those elements to the facts of the case. However, Millett LJ added: ‘Laid down just 100 years ago, AL Smith LJ’s checklist has stood the test of time; but it needs to be remembered that it is only a working rule and does not purport to be an exhaustive statement of the circumstances in which damages may be awarded instead of an injunction.’ Millett LJ went on: ‘Reported cases are merely illustrations of circumstances in which particular judges have exercised their discretion, in some cases by granting an injunction, and in others by awarding damages instead. Since they are all cases on the exercise of a discretion, none of them is binding authority on how the discretion should be exercised. The most that any of them can demonstrate is

202 203 204 205

[1980] 1 WLR 594. [1895] 1 Ch 287. Ibid, at p 322. It was not referred to in Wrotham Park Estates Co v Parkside Homes Ltd [1974] 1 WLR 798 or in Baxter v Fair Oak Properties Ltd [1965] Ch 816. 206 [1995] 1 WLR 269, CA. 207 At 197c and 208b respectively. Kennedy LJ agreed that the appeal should be dismissed.

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13.94  Remedies for breach of a restrictive covenant that in similar circumstances it would not be wrong to exercise the discretion in the same way. But it does not follow that it would be wrong to exercise it differently.’ 13.94 This paragraph was adopted by Lord Neuberger in Lawrence v Fen Tigers Ltd.208 He stated that where the defendant is committing a wrong the prima facie position is that an injunction should be granted, so that the burden is on the defendant to show why it should not. However, he emphasised that whilst that represents the burden of proof the court should approach the question of whether or not it is right to grant an injunction or damages in lieu neutrally with the result depending on all the evidence and arguments in each particular case,209 and that, ‘as a matter of practical fairness, each case is likely to be so fact-sensitive that any firm guidance is likely to do more harm than good’.210 13.95 said:

In relation to AL Smith LJ’s ‘working rule’ in Shelfer, Lord Neuberger

‘Where does that leave AL Smith LJ’s four tests? While the application of any such series of tests cannot be mechanical, I would adopt a modified version of the view expressed by Romer LJ in Fishenden 153 LT 128, 141. First, the application of the four tests must not be such as to be a fetter on the exercise of the court’s discretion. Secondly, it would, in the absence of additional relevant circumstances pointing the other way, normally be right to refuse an injunction if those four tests were satisfied. Thirdly, the fact that those tests are not all satisfied does not mean that an injunction should be granted.’ 13.96 Lord Sumption, in Lawrence, indicated the decision in Shelfer was in his view out of date ‘and it is unfortunate that it has been followed so recently and so slavishly’.211 Lord Clarke of Stone-cum-Ebony agreed, though he said he would not lay down precise principles which should be followed in the future, and no other member of the court attempted to do so. Unhelpful though that is, it should be borne in mind that all the remarks in relation to this aspect of the case in Lawrence were obiter and the court had not had full submissions on the matter, which had not been considered by the courts below.212 Lord Mance agreed with Lord Neuberger’s general approach, and Lord Carnwath limited himself to saying that he agreed with Lord Neuberger and the rest of the court that ‘the opportunity should be taken to signal a move away from the strict criteria in Shelfer’. It follows that what AL Smith LJ in Shelfer described as a ‘good working rule’ cannot be regarded as doing more than setting out some relevant considerations – or, as was recently said in Humphrey v Rogers [2017] 23 November, unreported, a starting point (Slade J). 13.97 Other considerations not listed by AL Smith LJ in Shelfer may include not just where the injury cannot fairly be compensated by money, but where the defendant has acted in a high-handed manner or has endeavoured to steal a march on the claimant or to evade the jurisdiction of the court (see Lord Neuberger at 208 [2014] AC 822, at para 120. It was a case where the claim made was one in tort for nuisance, but where the principles in relation to an award of damages in lieu of an injunction were, in the relevant parts, considered generally. The case is also known (in other reports) as Coventry v Lawrence. 209 Paragraphs 121–122. 210 Paragraph 120. 211 Paragraph 161. 212 See, eg Lord Mance’s comments at para 171, and Lord Carnwath at para 238.

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Damages in addition to or in lieu of an injunction 13.98 para 121 of Lawrence, quoting from Lord Macnaghten in Colls v Home and Colonial Stores Ltd213). Accordingly, there is no requirement in all cases for the injury to the claimant’s rights to be small in order for an injunction to be awarded in lieu of damages. It is simply one of the factors to be considered. Equally, though the damages may be large, it may be inappropriate to grant an injunction, and considered right to award damages in lieu instead – for example, where the claimant has stood by and allowed a prohibited building to be erected in full knowledge of his ability to seek an interim injunction but has not done so, and has suggested monetary compensation in correspondence. 13.98 In Gafford v Graham and Another,214 a conveyance provided that, ‘1. … at no time shall the premises hereby conveyed or any part thereof be used or permitted to be used other than as a livery yard and stabling for horses and one residential bungalow … 3. No building of any description shall be allowed on the land hereby conveyed or any part thereof until detailed plans thereof have been submitted to and approved in writing by the Vendors …’. The claimant was the successor in title to the vendor. Although the benefit of the covenants had already been annexed to the relevant land, the conveyance to the claimant also contained an express assignment to him of the benefit of the covenants. One of the matters complained of in the action was that the defendant had constructed an indoor riding school building and used the land for such a business. In relation to this aspect of the matter, the claimant had written to the defendant through solicitors in March 1989, before the construction works began, requesting that the building works (for which planning permission had been granted despite the claimant’s objection, and for which materials had been brought to site) should stop or that he might seek an injunction. Work had continued. Had the claimant then sought an interim injunction to stop the works proceeding further, it would have been granted.215 However, he failed to seek such an injunction. As indicated above, the Court of Appeal (through Nourse LJ) held at p 84 that: ‘As a general rule, someone who, with the knowledge that he has clearly enforceable rights and the ability to enforce them, stands by whilst a permanent and substantial structure is unlawfully erected, ought not to be granted an injunction to have it pulled down.’ However, following Lawrence (above), it may be better to describe this as a powerful factor pointing in favour of the exercise of the discretion rather than a general rule. It is clearly something which generally results in an injunction being refused in favour of an award of damages in lieu thereof in the absence of factors pointing the other way. The Court of Appeal made clear it was a matter for the exercise of discretion by the trial judge, and a further factor which the court said ‘[tipped] the balance in favour of an award of damages’ in the Gafford case was that the claimant had offered to allow the building to remain in return for a cash sum, albeit an excessive one.216

213 [1904] AC 179, at p 193. 214 (1999) 77 P&CR 73. 215 See p 83 of the judgment. 216 ibid.

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13.99  Remedies for breach of a restrictive covenant The Court referred to AL Smith LJ’s ‘good working rule’ in Shelfer but also to the comments of Millett LJ in Jaggard v Sawyer, above, (subsequently approved by Lord Neuberger in Lawrence). It pointed out217 that both those cases were ones where the suggestion that the claimant’s rights should be bought out for a cash sum was strongly resisted. However, in Gafford the claimant had been willing to settle the matter on payment of a cash sum, which could properly be reflected in an award of damages. That being so, what was then described (prior to Lawrence) as the Shelfer ‘good working rule’ had to be adapted accordingly. 13.99 Even in advance of Lawrence,218 the court also made clear that the size of the award was just one factor for consideration. The way the Court of Appeal put it was as follows (at p 86): ‘The essential prerequisite of an award of damages is that it should be oppressive to the defendant to grant an injunction. Here that prerequisite is satisfied. It would be oppressive and therefore unfair to the defendant to allow the judge’s injunctions to stand. The plaintiff should receive an award of damages instead.’ However, they might be large, as ‘It would be unfair to him for them not adequately to compensate him for the injury to his legal rights’. Accordingly, given that the claimant had failed to seek an interim injunction to prevent continuation of the work, and that he had been willing to accept a cash sum to allow the building and its uses to remain, damages in lieu of an injunction were awarded.

The measure of damages under Lord Cairns’ Act in the context of restrictive covenants 13.100 As pointed out above, the provisions of section 50 of the Senior Courts Act 1981 appear wide enough to continue the pre-1982 breadth of discretion as to the method of assessment which obtained under Lord Cairns’ Act.219 13.101 Soon after that Act was passed in 1858, it was established that damages might be awarded under the Act in cases even though no damages could be claimed at common law.220 These cases now include damages for infringement of an equitable right, such as a breach of a restrictive covenant where the claimant’s right to enforce the covenant is an equitable right only,221 damages for loss suffered after the commencement of the proceedings222 and damages to compensate for a wrongful

217 218 219 220

Ibid, at p 85. In which Gafford was not cited. Now s 50 of the Senior Court Act 1981. Eastwood v Lever (1863) 4 De GJ&Sm 114, per Turner LJ at p 128; Alexander v Mansions Pty Ltd (1900) 16 TLR 431. 221 See para 13.78 et seq and the cases there referred to. 222 Jaggard v Sawyer [1995] 2 All ER 189; Wroth v Tyler [1974] Ch 30 (damages in lieu of specific performance).

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Damages in addition to or in lieu of an injunction 13.104 act which is threatened but not yet committed.223 In Johnson v Agnew,224 Lord Wilberforce (with whose speech the other four Law Lords agreed), said: ‘… it is clear that the jurisdiction to award damages in accordance with section 2 of Lord Cairns’s Act (accepted by the House as surviving the repeal of the Act) may arise in some cases in which damages could not be recovered at common law; examples of this would be damages in lieu of a quia timet injunction and damages for breach of a restrictive covenant to which the defendant was not a party. To this extent the Act created a power to award damages which did not exist before at common law. But apart from these, and similar cases where damages could not be claimed at all at common law, there is sound authority for the proposition that the Act does not provide for the assessment of damages on any new basis. The wording of section 2 that damages “may be assessed in such manner as the court shall direct” does not so suggest, but clearly refers only to procedure.’ 13.102 In cases where the claimant is entitled to enforce a restrictive covenant at law,225 then he would be entitled to claim damages at common law, or, alternatively, could seek damages in lieu of an injunction under Lord Cairns’ Act. The basis of compensation is not limited to the loss suffered by the claimant in the sense of the injury to his land in terms of effects on it of the restrictive covenant being broken, but extends to the loss the claimant as owner of the land has suffered by the defendant not having observed the need to obtain the claimant’s consent to a release of the covenant for the required purposes. 13.103 Obviously, in determining what figure might reasonably have been demanded for such a release, the benefit the defendant has obtained, or will obtain, from doing the acts the covenant provided should not be done, will be relevant. The object is not to strip the defendant of his unjust gains,226 but the amount of such gains to the defendant falls to be taken into account in assessing the sum the defendant would reasonably have been willing to pay to secure release from the covenant: see Jaggard v Sawyer.227 13.104 As Sir Thomas Bingham MR explained in Jaggard, this is the true explanation of the damages awarded in lieu of an injunction in Wrotham Park Estate Co v Parkside Homes Ltd. There, the claimants’ estate was ‘not diminished by one farthing’ in consequence of the construction of an additional 14 houses on the restricted land. Brightman J said: ‘If the claimants are merely given a nominal sum, or no sum, in substitution for injunctions, it seems to me that justice will manifestly not have been done … In my judgment a just substitute for a mandatory injunction would be such a sum of money as might reasonably have been demanded by the claimants from Parkside as a quid pro quo for relaxing the covenant.’ 223 Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 851. 224 [1980] AC 367, at p 400B–D. This was also a case of damages in lieu of specific performance. 225 As to when the claimant has a common law claim to damages, see above, para 13.30, and below, para 13.184. 226 Contrary to what was said on this point by Steyn LJ in Surrey County Council v Bredero Homes Limited [1993] 1 WLR 1361 at p 1369. 227 [1995] 1 WLR 269, at pp 281H–282D (Sir Thomas Bingham MR, with whom Kennedy LJ agreed) and at p 291D-H (Millet LJ). The land itself is effectively diminished in value by reason of the reasonable sum for release that could otherwise be expected to be paid for relase of the covenant: see p 291F.

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13.105  Remedies for breach of a restrictive covenant In arriving at such sum in the Wrotham Park case, Brightman J then considered the profit which Parkside had made from the development (about £50,000). However, he did that in order to assess what, in all the circumstances, would have been a ‘fair’ price for Parkside to have required for the relaxation of the covenant. He decided on the facts that there it would have been five per cent of that sum, ie £2,500. 13.105 A percentage figure of five per cent may be regarded as the low-water mark of value for such a relaxation. One of the factors which appears to have led to it being so low in Wrotham Park was that the assessment was made by reference to the figure which might have been negotiated before the development took place on the footing that this would accord with the principle of measuring damages by reference to the sum which would place the claimants in the same position as if the covenant had not been broken. However, bearing in mind that the damages were being awarded in lieu of an injunction and that the time when the injunction would be granted is the time of the hearing, an assessment in the light of the events as they appeared at the time of the hearing might in other cases be considered more appropriate. In open market negotiations, a more usual percentage figure required for the removal of an impediment to development (by the release of restrictive covenants or the grant or facilitation of rights of access) is 33 per cent (in accordance with the principle commonly known as the ‘Stokes’ principle228) with figures going up to 50 per cent. 13.106 However, each case will obviously depend on its own facts.229 In Timares (Vincent Square) Ltd v Fairpoint Properties (Vincent Square) Ltd (No 2)230 (an infringement of a right to light case), the following principles were said from the cases to apply to the assessment of damages in lieu of an injunction (by Mr Gabriel Moss QC sitting as a deputy High Court judge): ‘(1) The overall principle is that the court must attempt to find what would be a fair result of a hypothetical negotiation between the parties. (2) The context, including the nature and seriousness of the breach, must be kept in mind. (3) The right to prevent a development (or part) gives the owner of the right a significant bargaining position. (4) The owner of the right with such a bargaining position will normally be expected to receive some part of the likely profit from the development (or relevant part). (5) If there is no evidence of the likely size of the profit the court can do its best by awarding a suitable multiple of the damages for loss of amenity. (6) If there is evidence of the likely size of the profit, the court should normally award a sum which takes into account a fair percentage of the profit. (7) The size of the award should not in any event be so large that the development (or relevant part) would not have taken place had such a sum been payable. 228 From the case of Stokes v Cambridge Corporation (1981) 13 P&CR 77. 229 In Jaggard v Sawyer one-ninth of the development value was awarded. 230 [2007] 1 WLR 2167.

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Damages in addition to or in lieu of an injunction 13.109 (8) After arriving at a figure which takes into consideration all the above and any other relevant factors, the court needs to consider whether the deal feels right.’231 On the facts, just under one-third of the development profit was taken. 13.107 Where there are a number of pieces of land with the benefit of the covenant, the percentage amount of the relevant profit that is decided on will be divided between the number of them to determine the amount payable to the actual claimant(s) in the action: see Small v Oliver & Saunders (Developments) Ltd.232 If damage, however assessed, will only be nominal, then just nominal damages may be awarded233 or the claim may be dismissed altogether.234 However, the fact that damages may be difficult to assess, and may have to be the subject of a detailed inquiry, is no barrier. 13.108 In Shaw v Applegate,235 no evidence was adduced before the trial judge on which any quantification of damages could be reached and he dismissed the claim for an injunction or damages in lieu on two grounds, of which one was that damages, if awarded, would be incapable of assessment. However, on appeal judgment was given for the claimants for damages in lieu of an injunction, the case being remitted for an inquiry as to damages. In the course of his judgment, Goff LJ said:236 ‘In my judgment, therefore, we should refuse an injunction and grant damages under Lord Cairns’ Act. There are, or may be, cases where it is clear that damage can only be nominal and in such cases it may be right, as Blackett-Ord V-C did in this case, to dismiss the action altogether. But, in my judgment, it was not right to apply that principle to this case. It is impossible without an inquiry to say whether or not the damage can be quantified and whether or not it will prove to be substantial. I agree, therefore, that the right course in this case is to withhold an injunction and to direct an inquiry as to damages.’ 13.109 The date at which damages in lieu of an injunction under the Act are to be assessed is the date by reference to which the court is awarding damages in lieu of an injunction. This will normally be the date of delivery of judgment by the court237 but may be earlier where, for example, during or before the hearing

231 This last point echoes the comments of Mr Anthony Mann QC, sitting at the time as a deputy High Court judge, in Amec Developments Ltd v Jury’s Hotel Management (UK) Ltd (2001) 82 P&CR 22, who said in his conclusion at para 36, ‘As was pointed out by Nourse LJ in Gafford v Graham [1993] 3 EGLR 75 at p 80L, the sort of damages questions involved in cases like the present are matters of judgment which are incapable of strict rational and logical exposition from beginning to end’ (a figure of £375,000 amounting to around 20 per cent being taken there). 232 [2006] EWHC 1293 (Ch). 233 As in Surrey County Council v Bredero [1993] 1 WLR 1361. 234 Though in the old cases it may have made a difference to costs which course was adopted, as technically the claimant would have succeeded in the action even where damages awarded were merely nominal, it is unlikely to make any real difference under the Civil Procedure Rules, as the court will look at the substance of who has succeeded rather than the technical result. 235 [1977] 1 WLR 970. 236 Ibid, at p 981B. 237 Wroth v Tyler [1974] Ch 30.

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13.110  Remedies for breach of a restrictive covenant the claimant indicates his willingness to accept damages in lieu of an injunction and signifies his intention no longer to seek an injunction,238 or where other circumstances suggest an earlier date.239 See also below, para 30.20 et seq. 13.110 The damages ‘must necessarily cover not only injury already sustained but also injury that would be inflicted in the future’.240 This principle was applied in the restrictive covenant case of Baxter v Four Oaks Properties Ltd,241 where Cross J stated that, ‘Counsel on both sides proceeded on the footing that the proper measure to apply in the circumstances was what the various claimants had suffered, and would suffer, as owners of their several properties, by reason not only of the prospective user of the building as flats but also of its erection and existence as a building’, and Cross J proceeded to deal with the problem on that footing. Similarly, in Jaggard v Sawyer,242 the damages awarded by the county court judge below and upheld by the Court of Appeal were based on an assessment to compensate the claimant for the continuing invasion by the defendants of her rights.243 Damages are awarded once and for all.

DEFENCES TO REMEDIES GENERALLY OR ALTERNATIVELY TO THE EQUITABLE REMEDY OF AN INJUNCTION (OR POTENTIALLY A DECLARATION) 13.111 The need for a defendant to establish a defence presupposes that the claimant has succeeded in establishing a prima facie case to enforce the covenant and in the first instance a defendant should, of course, be concerned to level an attack on any weak areas of the claimant’s claim of a right to enforce the covenant. If a claim is made beyond the statutory limitation period, all remedies will be barred (so long as the defence is raised in the action). One aspect of the remedy of injunction being equitable is that its availability is conditioned by the need for the claimant to comply with a number of equitable requirements which find no place in the context of common law remedies. Many of these derive from such general equitable maxims as ‘Delay defeats Equity’, ‘He who comes to Equity must do Equity’, ‘He who comes to Equity must come with clean hands’, ‘Equity will not act in vain’ and (not least) ‘Equitable remedies are discretionary’. Accordingly, defences may be available 238 See Osborne v Bradley [1903] 2 Ch 446, considered above at para 13.87; Johnson v Agnew [1980] AC 367. 239 As in Wrotham Park Estate Co v Parkside Homes Ltd [1974] 1 WLR 798, referred to above at para 13.105. 240 Per Viscount Finlay in Leeds Industrial Co-operative Society Ltd v Slack [1924] AC 851, at p 857. In Fritz v Hobson (1880) 14 ChD 542, at p 557, Fry J said: ‘Now it is manifest that damages cannot be an adequate substitute for an injunction unless they cover the whole area which would have been covered by the injunction …’. An injunction, however, only looks to the future but it is clear that damages awarded in lieu reflect both future and past injury. Common law damages for a past breach only may, of course, be awarded but only where the claimant’s claim to enforce the covenant is based on a legal right. As to common law damages, see para 13.184 et seq. 241 [1965] Ch 816, at p 830B. 242 [1995] 1 WLR 269. 243 Ibid, at 202c–d and j and 212j.

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Defences to remedies generally or to the equitable remedy etc 13.117 to defeat a claim for an injunction which would not defeat a claim for damages at common law. 13.112 In Knight v Simmonds,244 Lindley LJ said: ‘When a Court of Equity is asked to enforce a covenant by decreeing specific performance or granting an injunction, in other words when equitable as distinguished from legal relief is sought, equitable as distinguished from legal defences have to be considered.’ Similar principles may affect a claim for a declaration. 13.113 In the present context, the particular defences falling to be considered are: (1) limitation (a bar to all remedies; not just equitable remedies); (2) laches/acquiescence; (3) inequitable conduct (including estoppel, which is capable of operating as a bar to all remedies); (4) changes in the character of the neighbourhood per se.

Limitation The Limitation Act 1980 13.114 Where the restriction sought to be enforced is contained in a deed, the period of limitation will generally be 12 years from the date of the breach, or last breach (section 8 of the Limitation Act 1980) and in other cases it is six years (section 5).245 These periods are absolute, whether or not the claimant had knowledge of the breach, subject to the provisions of section 28 (extension of period in case of disability), and section 32 (postponement of period in the case of fraud, concealment or mistake). 13.115 Section 36 additionally provides that the time limits under sections 8 and 5 (amongst others), ‘shall not apply to any claim for specific performance of a contract or for an injunction or for other equitable relief, except in so far as any such time limit may be applied by the court by analogy in like manner as the corresponding time limit under any enactment repealed by the Limitation Act 1939 was applied before 1 July 1940’. 13.116 The ‘exception’ renders the provision of very little, if any, effect, however, in the current context. Prior to 1939 the courts had developed a general principle of applying limitation periods to claims for equitable remedies, save where by reason of the fraud of the defendant the claimant was not aware of his right of action. 13.117 In Gibbs v Guild,246 Lord Coleridge CJ said: ‘I understand the Courts of Equity to deal with the Statute of Limitations as they deal with every other legal right, whether existing by statute or common 244 [1896] 2 Ch 294, at p 297. 245 Limitation Act 1980, ss 9 and 5. 246 [1882] 9 QB 59.

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13.118  Remedies for breach of a restrictive covenant law, not by abrogating it, but by saying, on principles well understood in those Courts, that in some particular cases it is unjust that the party should be allowed to exercise those rights. They say that where the cause of action and the knowledge of the cause of action are contemporaneous, there the statute runs in Courts of Equity as it runs at common law, but that where the existence of the cause of action is concealed from the person who ought to take advantage of it by the fraud of the person who creates it, such person shall not take advantage of the wrong which he himself has done, and that a fresh cause of action accrues from the moment that the fraud is discovered, and that to that fresh cause of action the Statute of Limitations will be applied by the Courts of Equity’. 13.118 Fraud in this sense probably also included a failure to disclose events the defendant was under a duty to disclose or which the defendant acted unconscionably in not disclosing. However, where in the absence of a special duty of disclosure for some reason, there is simply a breach of covenant (ie contract) of which the claimant is unaware, the special equitable doctrine does not apply. Given the provisions of section 28 (extension of period in case of disability) and section 32 (postponement of period in the case of fraud, concealment or mistake) of the 1980 Act, it will be appreciated the provisions of section 36 are not likely to be of real significance in the context of restrictive covenants.

Laches (or ‘acquiescence’) Nature 13.119 Section 36(2) of the Limitation Act 1980 provides that: ‘Nothing in this Act shall affect any equitable jurisdiction to refuse relief on the grounds of acquiescence or otherwise’. Accordingly, notwithstanding the claimant may be within any applicable limitation period he may be barred from gaining equitable relief by reason of laches or acquiescence.247 13.120 Laches and acquiescence effectively mean the same thing. Laches is a well-established equitable doctrine. To be guilty of laches (or acquiescence) the claimant must have failed to raise or enforce his right for so long a time after having knowledge of the breach that he will be barred from obtaining relief.248 It could arise through delay after, as well as before, proceedings.249 247 See Re Pauling’s Settlement Trusts [1964] Ch 303, as affirmed more recently by Chadwick LJ for the Court of Appeal in Re Loftus Dec’d [2007] 1 WLR 591, at para 37. 248 See Achilli v Tovell [1927] 2 Ch 243 where although the first claimant’s rent collector knew of the proposal to raise the height of the wall, he misidentified the wall in question and did not inform the first claimant of the breach until after the wall was completed. A mandatory injunction was granted. In connection with acquiescence, Lord Cottenham, in Duke of Leeds v Earl of Amherst (1846) 2 Ph 117, at p 123, referred to ‘knowledge or means of knowledge’ as being relevant, but this is inconsistent with Tubbs v Esser (1909) 26 TLR 145 to the effect that a claimant is not prejudiced by omitting to take steps to discover breaches. There is certainly no judicial warrant for such an extension in relation to pure laches: see London, Chatham, and Dover Rly Co v Bull (1882) 47 LT 413. 249 There seems no reason in principle why not, and see per Upjohn J in Re Jarvis [1958] 1 WLR 815, at p 819.

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Defences to remedies generally or to the equitable remedy etc 13.124 13.121 Mere delay in itself, without considering the surrounding circumstances, is not sufficient. The classic statement of the doctrine of laches comes from the judgment of Lord Selborne LC in Lindsay Petroleum Co v Hurd.250 At pp 239–40, he said as follows: ‘Now the doctrine of laches in Courts of, Equity is not an arbitrary or a technical doctrine. Where it would be practically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equivalent to a waiver of it, or where by his conduct and neglect he has, though perhaps not waiving that remedy, yet put the other party in a situation in which it would not be reasonable to place him if the remedy were afterwards to be asserted, in either of these cases, lapse of time and delay are most material. But in every case, if an argument against relief, which otherwise would be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that defence must be tried upon principles substantially equitable. Two circumstances, always important in such cases, are, the length of the delay and the nature of the acts done during the interval, which might affect either party and cause a balance of justice or injustice in taking the one course or the other, so far as relates to the remedy.’ 13.122 This was recently affirmed to set out the appropriate principles in relation to acquiescence by Lord Neuberger (with whom the other Supreme Court justices agreed) in Fisher v Broker.251 Lord Neuberger said, ‘Although I would not suggest it is an immutable requirement, some sort of detrimental reliance is usually an essential ingredient of laches, in my opinion’. In other words, in an ordinary case – that is to say, in the absence of some special additional factor – some sort of detrimental reliance by the party against whom the right is sought to be enforced would ordinarily be required in order for justice to require the claimant to be barred from enforcing it. 13.123 This is in line with remarks made by Farell J in Chatsworth Estates Co v Fewell,252 where he said of acquiescence: ‘The principle is in many ways analogous to the doctrine of estoppel’.253 13.124 Similarly, in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd254 Oliver J referred to the plea of acquiescence in Shaw v Applegate255 as ‘the plea of estoppel by acquiescence’. In Shaw v Applegate, Buckley LJ (with whom Goff and Shaw LJJ agreed) said256 of acquiescence that: ‘The real test, I think, must be whether upon the facts of the particular case the situation has become such that it would be dishonest or unconscionable for the plaintiff, or the person having the right sought to be enforced, to continue to seek to enforce it.’ 250 (1873–74) LR 5 PC 221. 251 [2009] 1 WLR 1764, at para 64. A copyright case. 252 [1931] 1 Ch 224, at p 231. 253 Estoppel may be either legal estoppel or equitable estoppel. For the significance of the distinction and its relation to waiver and acquiescence, see Roebuck v Mungovin [1994] 2 AC 224, per Lord Browne-Wilkinson at 234–5. See also Fisher v Brooker [2009] 1 WLR 1764. 254 [1982] QB 133. 255 [1977] 1 WLR 970, at 153H. 256 Ibid, at p 978D.

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13.125  Remedies for breach of a restrictive covenant Goff LJ added in his judgment:257 ‘For my part, I think it is easier to establish a case of acquiescence where the right is equitable only …’ and cited a passage to the like effect from the judgment of Farwell J in Osborne v Bradley.258 13.125 However, in Gafford v Graham and Another,259 Nourse LJ, giving the judgment of the Court of Appeal, stated, ‘I doubt whether a distinction ought any longer to be made between a legal and equitable right when considering a defence of acquiescence in a case of this kind’, but agreed with the test for acquiescence as formulated in Shaw v Applegate. 13.126 In Fisher v Brooker,260 Lord Neuberger indicated that the doctrine of laches related to the barring of equitable remedies, and said in relation to the instant case that, ‘in order to defeat [the claimant’s] claims on the grounds of laches the [defendants] must demonstrate some acts during the course of the delay period which result in a balance of justice justifying the refusal of the relief to which [the claimant] would otherwise be entitled’ (which they were unable to do). This goes back to Lord Selborne’s words in Lindsay Petroleum v Hurd quoted above, that what is required is conduct that has ‘put the other party in a position in which it would not be reasonable to place him if the remedy were afterwards to be asserted’ (or in the words of Buckley LJ in Shaw v Applegate, to render enforcement of the covenant ‘unconscionable’), which is invariably likely in practice to mean that some sort of detrimental reliance on the previous nonenforcement of the covenant will need to be shown.

Effects of delay 13.127 The effects of delay may be divided into three categories: (1) where the claimant’s right to enforce the covenant is by reason of laches defeated in its entirety or only nominal damages result; (2) where the delay fails to defeat the claimant’s right but where the degree of delay is sufficient to persuade the court not to grant an injunction but to exercise its discretion to award damages in lieu of an injunction instead; and (3) where the delay does not affect the grant of an injunction. It is sometimes difficult, from a comparison of the cases, to determine precisely where the dividing line between them lies, and the case summaries set out below can provide no more than a general guide.

(1) Laches/acquiescence barring the claimant’s right in its entirety or confining the award to nominal damages 13.128 These are cases of acquiescence where it was held to be a complete defence to the action.

257 258 259 260

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lbid, at p 979H. [1903] 2 Ch 446, at p 451. (1999) 77 P&CR 73. [2009] 1 WLR 1764, at para 79.

Defences to remedies generally or to the equitable remedy etc 13.129 In Kelsey v Dodd261 the owners of the unsold part of the Calverley Estate sought an injunction against the purchaser of a lot on the estate which was subject to a covenant against keeping a beer shop. Over a period of years, the claimants and their predecessors in title stood by whilst the defendant who was the original covenantor opened a beer shop and built up a valuable connection. It was held that the claimants had lost their right both at law and in equity to bring an action by long-continued acquiescence in breaches of the covenant both by the defendant and other lot owners on the estate and consequently were not entitled either to an injunction or to sue on the covenant at law, even for nominal damages. 13.129 In Gafford v Graham and Another,262 as referred to above in another context,263 a conveyance provided that: ‘1. … at no time shall the premises hereby conveyed or any part thereof be used or permitted to be used other than as a livery yard and stabling for horses and one residential bungalow … … 3. No building of any description shall be allowed on the land hereby conveyed or any part thereof until detailed plans thereof have been submitted to and approved in writing by the Vendors ….’ The first thing complained of in the action brought by the claimant in 1989 was as follows:264 The defendant obtained planning permission in 1985 for the conversion of the bungalow into a two-story building. The claimant entered an objection with the local planning authority to the planning permission to convert the bungalow but did not write to the defendant. In 1986 the defendant carried out works to convert the bungalow into such a building and in addition carried out works to extend a barn. Only in March 1989 did the defendant first complain about this (in the context of a complaint about a second matter which had by then arisen, namely imminent, and separate, breaches of the covenants by the construction and use of an indoor riding school). Accordingly, there was a delay of about three years after the acts complained of in relation to the bungalow and barn extension, when the claimant’s complaint was prompted by the more serious threat posed by the matters that had then arisen relating to the riding school. Before then, he had effectively treated the conversion of the bungalow and extension to the barn as matters that were closed. Having referred to the test for acquiescence set out in Shaw v Applegate (above), of unconscionability, the Court of Appeal held that the claimant had acquiesced in the conversion of the bungalow and the extension to the barn, and that his acquiescence was ‘a bar to all relief in respect of those matters’.265 Accordingly, the trial judge’s award of damages for breach of covenant by the conversion of the bungalow and extension to the barn was discharged. 261 262 263 264 265

(1881) 52 LJ Ch 34. (1999) 77 P&CR 73. See para 13.98. As to the second thing, see below and para 13.136. See p 81.

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13.130  Remedies for breach of a restrictive covenant However, it is important to bear in mind that the award for damages made at first instance appears to have been damages in lieu of an injunction in relation to the breach by non-submission and approval of plans, and that as an injunction could not properly be granted by reason of acquiescence there were no damages properly to be awarded in lieu of something (an injunction) which was not awardable. 13.130 In Fisher v Brooker,266 Lord Neuberger said ‘laches is an equitable doctrine, under which delay can bar a claim to equitable relief’267 and ‘laches can only bar equitable relief’.268 He further said that, ‘a declaration as to the existence of a long-term property right,269 recognised as such by statute,270 is not equitable relief’.271 He did not regard a declaration as equitable relief as such, but did rule out the possibility that a declaration should be refused on the grounds of laches if it was sought solely for the purpose of seeking equitable relief, however, which he described as ‘arguable’. 13.131 It appears unlikely on the basis of these comments that laches, or acquiescence, would now be regarded as a bar to all remedies – although in relation to something like non-submission of plans, damages may be nominal in the absence of damages in lieu of an injunction (which would be based on loss of bargaining power for release) which would not be available if the ability to obtain an injunction has been lost by reason of laches/acquiescence. In the case of an application for an interim injunction, decisions will be made on the basis of the ‘balance of convenience’ considerations set out by the House of Lords in American Cyanamid v Ethicon272 (above), but the court is likely to be unimpressed by any delay by the claimant in the seeking of it, which may affect its assessment of the need for it pending trial.

(2) Delay persuading the court to grant damages in lieu of an injunction 13.132 In Sayers v Collyer,273 Fry LJ said: ‘I am clearly of opinion that acquiescence is one of those circumstances which the Court may take into consideration in deciding whether it should give damages or an injunction; and that an amount of acquiescence less than what would be a bar to all remedy, may operate on the discretion of the Court, and induce it to give damages instead of an injunction.’ 13.133 The cases within this group have already been considered above in considering when the court will exercise its discretion to award damages in lieu of an injunction.274 Shaw v Applegate275 is representative where the Court of Appeal held that although the conduct of the claimant did not establish the 266 267 268 269 270 271 272 273 274 275

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[2009] 1 WLR 1764. Paragraph 64. Paragraph 79 (and see above, para 13.126). There, copyright. The Copyright, Designs and Patents Act 1988. Paragraph 79. [1975] AC 396. (1884) 28 ChD 103, at p 110. Above, para 13.81 et seq. [1977] 1 WLR 970.

Defences to remedies generally or to the equitable remedy etc 13.136 defence of acquiescence so as to totally destroy the claimant’s rights, it did amount to the lesser degree of ‘acquiescence’ which was sufficient to lead the court to exercise its jurisdiction to refuse an injunction and grant damages under Lord Cairns’ Act in lieu. To like effect is the decision in Baxter v Four Oaks Properties Ltd.276 13.134 More recently, in Jaggard v Sawyer [1995] 1 WLR 269 the Court of Appeal upheld the decision of the trial judge that it would in all the circumstances be oppressive to grant an injunction and that damages should be awarded in lieu of an injunction. There, the claimant had bought a house which was part of a long-standing development of ten houses, with gardens, served by a private road which was a cul de sac. Each of the plots included the area of roadway in front of it up to the centre of the roadway. Each of the houses was subject to covenants, binding on successors in title, not to use any part of the unbuilt on (garden) land of the house other than as garden and to maintain their portion of the roadway. The defendants bought one of the other houses. They, like the claimant in relation to her house, were successors in title of the original covenantor. The defendants obtained planning permission for a house on separate land adjoining their garden and not part of the development of ten houses or covered by the covenants. However, access was to be by way of a driveway constructed over part of the garden of their house, which was so covered. The claimant’s solicitors wrote stating that an interim injunction would be sought if work was not stopped pending an application to the court for a declaration. However, no such application was then made. The defendants reasonably believed they were acting lawfully, and the work to build the house continued. After the house had been largely completed, proceedings were issued by the claimant seeking an injunction to restrain the defendants from using their garden land as driveway and from using the roadway as access to the driveway built in breach of covenant. 13.135 In all the circumstances, and in particular in view of the failure to seek an interim injunction at an early stage, and bearing in mind that section 84 of the Law of Property Act 1925 (which allows the Upper Tribunal to discharge or modify a covenant) shows that covenants cannot be regarded as absolute and inviolable for all time, the Court of Appeal upheld the judge’s decision that it would be oppressive to grant an injunction and that damages should be awarded in lieu, which were there assessed by him as amounting to one-ninth of the development value involved. 13.136 Another recent example relates to the second matter complained of in Gafford v Graham and Another (above). As well as his complaints about the conversion of the bungalow to a two-storey building and the extension to the barn (referred to above), the claimant complained about the construction of a riding school building and the use of the land for a riding school business in breach of the restrictive covenants.277 The Court of Appeal said in relation to this aspect of the matter278 that, ‘Here there can be no question of acquiescence being an entire bar to all relief’ 276 [1965] Ch 816. 277 The covenants are set out at para 13.98 above. 278 In contrast to the first matter, relating to the conversion of the bungalow and extension to the barn, where it held the degree of acquiescence meant there was a bar to the right and all relief (see above).

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13.137  Remedies for breach of a restrictive covenant (in the context of that case, ie an injunction and damages in lieu). The Court pointed out the claimant had acted promptly in getting solicitors to write to the defendant once he knew something was afoot. However, the criticism that could be made of him, it said, was that he could then have obtained an interim injunction to stop the works proceeding, which would have been granted, but failed to do so. As indicated above,279 the Court held that: ‘As a general rule, someone who, with the knowledge that he has clearly enforceable rights and the ability to enforce them, stands by whilst a permanent and substantial structure is unlawfully erected, ought not to be granted an injunction to have it pulled down.’280 Though it was a matter of discretion for the trial judge, a further factor which the Court of Appeal said ‘[tipped] the balance in favour of an award of damages’ was that the claimant had offered to allow the building to remain in return for a cash sum, albeit an excessive one.281 The position was summarised by the Court as follows (at p 86): ‘The essential prerequisite of an award of damages [in lieu of an injunction] is that it should be oppressive to the defendant to grant an injunction. Here that prerequisite is satisfied. It would be oppressive and therefore unfair to the defendant to allow the judge’s injunctions to stand. The plaintiff should receive an award of damages instead’. Accordingly, given that the claimant had failed to seek an interim injunction to prevent continuation of the work (and had been willing to accept a cash sum to allow the building and its uses to remain), damages in lieu of an injunction were awarded.

(3) Where the delay does not affect the grant of an injunction 13.137 In the following cases the fact there had been a delay did not affect the remedy granted. 13.138 In Mitchell v Steward,282 the claimant and the defendant were owners of lots which were subject to a building scheme. The covenants prohibited the use of any house on the estate as a public house or beer shop. The first defendant built a shop at the back of his premises and opened it as a beer shop. Four months later he let the beer shop to the second defendant and within two months the claimants commenced proceedings for an injunction. It appeared that the claimants were aware of the activities of the first defendant but raised no objection until shortly after the second defendant took possession of the shop. It was held that the claimants’ conduct did not amount to such a degree of acquiescence as to preclude them from the right to enforce the covenant.

279 280 281 282

402

See para 13.59. At p 84. Ibid. (1866) LR 1 Eq 541.

Defences to remedies generally or to the equitable remedy etc 13.144 13.139 Kekewich J came to a similar conclusion, on basically similar facts, in Duke of Northumberland v Bowman.283 13.140 In London, Chatham and Dover Rly Co v Bull,284 the fact that the claimants had raised no objection, over a period of 13 years, to the construction of a tavern which had been built in front of the building line, and that during that period the tavern had changed hands, did not preclude them from being entitled to a mandatory injunction for the removal of another building constructed in line with the tavern of which the claimants complained only when that building was nearly completed. 13.141 In Chitty v Bray,285 the fact that the claimant had raised no objection to the owner of a plot on a building estate infringing a covenant relating to the distance to which buildings might be carried to the rear did not preclude him from claiming an injunction to restrain the owner of another plot from infringing a separate covenant relating to the front building line.286 13.142 In Richards v Revitt,287 it was held that the claimant who had not objected to the sale of British wines in breach of a covenant prohibiting the sale of any liquor was not barred from enforcing the covenant in relation to other liquor. Similarly, Meredith v Wilson,288 shows that acquiescence by a covenantee in a minor breach will not prevent him from obtaining an injunction in respect of a greater and more serious breach.289 13.143 In Elliston v Reacher,290 the owner of a plot which was subject to a building scheme one of whose covenants was that no ‘hotel, tavern, publichouse or beer-house’ should be built or any house used as such, commenced building a house with the intention of using it as a boarding house. One of the claimants saw copies of the plans at the local authority which contained the words ‘private hotel’ but there was no evidence that the claimants’ attention had been called to those words. When completed, the building began to be used as a hotel whereupon the claimants sought an injunction. It was not suggested that a boarding house (which was the purpose to which the building was originally intended to be put) could be a hotel within the meaning of the covenant. On this evidence, Parker J held that there was no such acquiescence as would defeat either the first claimant’s right or his entitlement to the remedy of injunction. 13.144 In Turner v Pryce,291 a building scheme contained restrictive covenants preventing the defendants from developing the rear gardens of their properties. There had been major breaches of the covenants by infill development affecting a number of plots on the estate subject to the building scheme. However, treating acquiescence as being ‘in many ways analogous to the doctrine of estoppel’, as

283 284 285 286 287 288 289 290 291

(1887) 56 LT 773. (1882) 47 LT 413. (1883) 48 LT 860. But it is otherwise if, on a building estate, the claimant has taken no steps to prevent the commission of material breaches of a covenant by some of the plot owners and then seeks to enforce the same covenant against another plot owner: Peek v Matthews (1867) LR 3 Eq 515. (1877) 7 ChD 224. (1893) 69 LT 336. See also Turner v Pryce [2008] 1 P&CR DG 20. [1908] 2 Ch 374. [2008] 1 P&CR DG 20.

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13.145  Remedies for breach of a restrictive covenant it was put in Chatsworth Estates Co v Fewell,292 Mr Stephen Smith QC sitting as a deputy High Court Judge recited the words of Farwell J in Chatsworth that: ‘… the principle upon which this equitable doctrine rests is that the plaintiffs are not entitled to relief if it would be inequitable to the defendant to grant it. In some of the 20 cases it is said that the plaintiffs by their acts and omissions have impliedly waived performance of the covenants. In other cases it is said that the plaintiffs, having acquiesced in past breaches, cannot now enforce the covenants. It is in all cases a question of degree. It is in many ways analogous to the doctrine of estoppel, and I think it is a fair test to treat it in that way and ask, “Have the plaintiffs by their acts and omissions represented to the defendant that the covenants are no longer enforceable and that he is therefore entitled to use his house as a guest house?”.’ 13.145 In answer to the same question in relation to the use of the garden land, the judge said any acquiescence could not have amounted to any representation to the defendants that the covenants were no longer enforceable as the defendants had denied all knowledge of the covenants until alerted to them by the claimants. From the time they first became aware of the covenants they were aware the claimants considered the covenants to be enforceable and were determined to enforce them, and, in the words of the Court of Appeal in Shaw v Applegate, it was not dishonest or unconscionable for the claimants to seek to enforce the covenants as they had no reason to do anything in relation to the defendants’ gardens after they had bought their property whereas the defendants had bought with the restrictions clearly shown on their registered title. 13.146 In Fisher v Brooker,293 the House of Lords had before it a music copyright claim with no applicable limitation period. An injunction was not sought, merely a declaration as to the claimant’s right to the song which was subject to the property right. The House held that in a case where the claimant had a long-term property right recognised by statute, and there was no estoppel preventing him from asserting it (because the defendants had not relied on the claimant’s failure to raise or enforce his entitlement earlier to their detriment), there would be no basis for preventing him from seeking any equitable relief.

Acquiescence by a minor 13.147 Acquiescence by a minor or those acting on his behalf will not bind him (unless adopted by him when he comes of age) in the absence at least of a fraudulent representation.294 The same principles would be likely to apply to a person otherwise under a disability.

Acquiescence by predecessors in title 13.148 There is no clear authority on whether acquiescence by a predecessor can be relied on against a successor in title. 292 [1931] 1 Ch 224. 293 [2009] 1 WLR 1764. 294 See Duke of Leeds v Earl of Amherst (1846) 2 Ph 117, at p 123, Somerset Coal Canal Company Ltd v Harcourt (1858) 2 De G and I 596, and Savage v Foster (1723) 9 Mod. 35, at p 37.

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Defences to remedies generally or to the equitable remedy etc 13.151 On the basis of principle, the position is considered to be as follows. 13.149 As Lord Selborne said, acquiescence is ‘not an arbitrary or technical doctrine’. It is essentially based on it not being reasonable to allow the right to be asserted by reason of delay having regard in particular to the length of the delay and what has been done in the meantime (to summarise Lord Selborne in Lindsay Petroleum v Hurd) or ‘unconscionability’ (Shaw v Applegate), and ‘detrimental reliance’ (Lord Neuberger in Fisher v Booker). Where land has been transferred to a successor, the principles ought to remain essentially the same - though the question becomes whether, due to the conduct of the predecessor in allowing time to elapse, and having regard to the defendant’s detrimental reliance on it, it is unreasonable or unconscionable, to allow the right to be enforced by the successor. 13.150 It may be thought that in most cases this will be so given that the defendant will still suffer the same prejudice by reason of enforcement, and the purchaser could protect his position by appropriate enquiry of the vendor.295 However, the behaviour of the defendant would also be relevant. If, for example, he had led the purchaser to believe he was not acting in a way that broke the covenant, that should surely affect the position. 13.151 This approach to the matter appears to fit the comments of Lord Radcliffe giving the judgment of the Privy Council in Nwakobi v Nzekwu.296 At page 1024, he said as follows: ‘Laches involves essentially a personal disqualification on the part of a particular plaintiff: it cannot be treated as a stigma on the title to land which, once impressed, necessarily descends with the title and affects all succeeding owners. In this it is to be distinguished from a defence such as estoppel in pais297 which, given the words or acts upon which a defendant has relied and altered his position, bars the remedy from that time on, both in the hands of the original actor and in the hands of those who claim title through him. Laches is not like this. It does not bite at an identifiable moment of time and it can be relied on only when account has been taken of all the circumstances that affect both the immediate plaintiff and the immediate defendant. Lapse of time is always one of these circumstances, and the inaction of a predecessor is not a matter to be ignored, for such inaction may itself lend some support to the defendant’s equity.’

295 And in Osborne v Bradley [1903] 2 Ch 446 at 451 Farwell J said, in the context of the principle set out at para 13.36 above, that ‘where there are negative covenants which are binding on the defendant the Court has, speaking generally, no discretion to consider the balance of convenience or matters of that nature, but is bound to give effect to the contract between the parties, unless the plaintiff seeking to enforce the covenant has by his own conduct, or by that of the persons through whom he claims, become disentitled to sue’. Emphasis added. See also Signature of St Albans (Property) Guernsey Ltd v Wragg [2017] EWHC 2352 (Ch) at paras 69 and 71 (above, para 13.161). 296 [1964] 1 WLR 1019. 297 That is, by act of notoriety recognised as having the same solemnity and formality such as the acceptance of an estate: see Lyon v Reed (1844) 1 M & W 285.

405

13.152  Remedies for breach of a restrictive covenant

Estoppel 13.152 Estoppel may prevent a restrictive covenant being relied on: see, eg Blackburn v David Alston (Suffolk) Ltd,298 where the legal position was summarised as follows: ‘Essentially the Defendants must satisfy the court on three matters. First there must be encouragement or acquiescence on the part of the Claimants. That encouragement may be passive provided that it encouraged the Defendants to act as they did. Inaction by a party cannot amount to acquiescence unless it induces the other one to act. Secondly the Defendants must act in reliance upon the encouragement. That encouragement is not enough if the Defendants are aware that the permission may be withdrawn or is otherwise subject to uncertainty. Thirdly the Defendants must also prove that it would be unconscionable for the Claimants to take advantage of them by denying them the right or benefit they expected to receive.’ 13.153 Guidance about the application of these broad principles was given in a number of cases cited by the parties. Crucially there is the judgment of Oliver J as he then was in Taylors Fashions Ltd v Liverpool Victoria Trustees Co Ltd299 commending: ‘… a very much broader approach which is directed rather at ascertaining whether, in particular individual circumstances, it would be unconscionable for a party to be permitted to deny that which, knowingly or unknowingly, he has allowed or encouraged another to assume to his detriment than enquiring whether the circumstances can be fitted within the confines of some preconceived formula serving as a universal yardstick for every form of unconscionable behaviour.’ The claim of estoppel failed on the facts there, as the court did not consider the claimant’s predecessor in title had known about or approved the relevant development. It is clear that had the relevant facts been found in the defendants’ favour the claimants, who were the executors of the person who was alleged to have so acted, would have been estopped, as well as him personally. 13.154 In Fisher v Brooker (a copyright case, involving in fact a claim to declarations), Lord Neuberger300 described estoppel as a well-established equitable doctrine, and said: ‘The classic example of proprietary estoppel, standing by whilst one’s neighbour builds on one’s land believing it to be his property, can be characterised as acquiescence: see per Oliver J in Taylor Fashions Ltd v Liverpool Victoria Trustees Co Ltd (Note) [1982] QB 133, 151’. In Fisher v Brooker itself, the estoppel argument relied on had not been pleaded before the trial judge, had not been investigated factually there, as well as appearing to be unfounded, and did not prevent the claims made from succeeding. Laches (or acquiescence) was pleaded, however.

298 [2001] All ER (D) 138 (Dec), [2001] WL 1676961. 299 [1982] QB 133, at pp 143H–155C. 300 [2009] 1 WLR 1764, at para 62.

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Defences to remedies generally or to the equitable remedy etc 13.159 Clearly there is a closeness between the concepts of estoppel and of acquiescence, as Lord Neuberger’s judgment in Fisher v Brooker makes clear. 13.155 Proprietary estoppel (as distinct from promissory estoppel, which can apply to prevent a person from enforcing any sort of right, whether over property or otherwise where the person has effectively, expressly or impliedly, promised the defendant he will not act to enforce it and the defendant has acted on that promise to his detriment) precludes a landowner from denying the existence of a property right in another and effectively allows the defendant to act as though he has the property right that was ‘promised’ to him. So, for example, if a person says to another that building a house on his land will not be a breach of a restrictive covenant in his favour, and the other in reliance thereon builds it, or if to the same effect the person stands by and allows the house to be built, and it is unconscionable for him then to deny the other person’s right to do so, proprietary estoppel will arise. Proprietary estoppel will generally prevent action being taken by both the person himself and by his successors in title. In relation to registered land, see section 116 of the Land Registration Act 2002. 13.156 Estoppel is unlikely to arise by reason of the conduct of a minor, however, any more than with acquiescence (as to which, see above).

General inequitable conduct 13.157 Estoppel is one example of unconscionable conduct preventing reliance on rights, it being unconscionable for the claimant to assert a claim inconsistent with encouragement of the defendant to do that which, in reliance on that encouragement, he then does. More generally, in the context of the enforcement of restrictive covenants, the maxim that ‘He who comes to Equity must come with clean hands’ may disentitle a claimant to relief where his earlier conduct in regard to the covenants shows a personal disregard for their enforcement. 13.158 This may be manifested in one of three ways: (1) by showing that the claimant himself (or, possibly, someone through whom he claims) has committed a substantial breach of the covenant he is seeking to enforce or some other closely related covenant; (2) by showing that the claimant has disregarded significant breaches by others of the same covenant; or (3) by showing that the acts (of the claimant) have been responsible for a significant change in the character of the neighbourhood and that the defendant’s breach is consistent with that change. Each of these will be considered in turn.

(1) Breach by the claimant (or by someone through whom he claims) 13.159 In Goddard v Midland Rly Co,301 the claimant and the defendant were purchasers of different plots which were subject to a common scheme of 301 (1891) 8 TLR 126.

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13.160  Remedies for breach of a restrictive covenant covenants one of which the claimant had himself broken and for breach of which by the defendant the claimant was now seeking a mandatory injunction. It was held that the claimant’s breach disentitled him to complain of the defendant’s breach and an injunction was refused. But if the claimant’s breach is trivial or has not resulted in any injury to others then he will not be barred from enforcing the same302 or a related303 covenant, at any rate where he has not been requested to remedy his breach. 13.160 In Hooper v Bromet,304 the claimant and the defendant were owners of different lots on land which was subject to a building scheme. The claimant had erected a lavatory and a sloping roof between his house and the boundary wall in breach of a covenant not to erect any building within four feet of any lot. The defendant began building four houses which infringed a stipulation against building within 40 feet from the roadways. Farwell J (whose decision on this point was not disturbed by the Court of Appeal) whilst expressing himself as inclined to refuse an injunction on the ground of the claimant’s own breach, considered himself bound by the decision in Western v MacDermott305 to hold that, the claimant’s breach being ‘a trivial breach of a trivial covenant’, there had been no such breach as to disentitle the claimant from succeeding. However, it seems clear from the judgment of Lord Chelmsford in Western v MacDermott306 that if a request had been made to the claimant to remedy his breach and he had refused, then this might have affected his entitlement to an injunction. All these cases involved building schemes involving reciprocity of interest in and enforceability of the covenants as between the claimant and the defendant, but the principle underlying the decisions would appear to apply equally in any other case where both the claimant and the defendant are entitled to and bound by the restrictions in question. 13.161 In Osborne v Bradley307 Farwell J said (in the context of the principle set out at para 13.36 above), that: ‘where there are negative covenants which are binding on the defendant the Court has, speaking generally, no discretion to consider the balance of convenience or matters of that nature, but is bound to give effect to the contract between the parties, unless the plaintiff seeking to enforce the covenant has by his own conduct, or by that of the persons through whom he claims, become disentitled to sue.’ [Emphasis added] In Signature of St Albans (Property) Guernsey Ltd v Wragg,308 a recent building scheme case, the parties accepted, and the court did not challenge, that based on this a party not himself in breach could be disentitled from obtaining an

302 Western v MacDermott (1866) 2 Ch App 72; Jackson v Winnifrith (1882) 47 LT 243 (claimants house built two feet in front of the building line; defendant commencing to build more houses than were permitted and at variance with the building line). 303 Hooper v Bromet (1903) 89 LT 37 (Farwell J); on appeal (1904) 90 LT 234. 304 Above. 305 Above. In that case both the lots of the claimant and the defendant were subject to a covenant against permitting trees or buildings above a height of eight feet. The Chancery Appeal Court held that the fact that the claimant’s garden had a tall tree which constituted a breach of the covenant did not preclude him from restraining his neighbour from erecting a building in his garden in excess of eight feet. 306 (1866) 2 Ch App 72. 307 [1903] 2 Ch 446, at 451. 308 [2017] EWHC 2352 (Ch), at paras 69 and 71.

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Defences to remedies generally or to the equitable remedy etc 13.164 injunction because of the conduct of a party through whom he claims. However, the court did not acept the claimant’s contention that a breach of a density covenant by a ‘collateral successor in title’, that is to say, by a successor in title to land X of the original vendor under the scheme prevented the successors in title to land Y of the original vendor from enforcing the covenant even though none of them claimed through the successor in title to land X who had committed the breach.309 13.162 In Turner v Pryce310 (above) the claimants had broken a covenant in the same building scheme relating to a building line, but the breach was in all the circumstances held to be de minimis when compared with the proposed breach of covenants by the defendants in constructing three new and additional dwelling houses and not something which would have inclined the court against the grant of equitable relief.

(2)  Claimant’s disregard of breaches by others 13.163 It would appear that the disregard by the claimant of significant breaches by other covenantors (or their successors) may, in itself, have an adverse effect on the right of the claimant to an injunction in respect of the defendant’s breach only in cases where there is a building scheme which contains no power to modify or release the restrictions.311 Thus, in Peek v Matthews,312 the estate vendor, having taken from each purchaser of a building plot a covenant to build only in a specified manner, took no action when several of the purchasers committed material breaches but sought to enforce the same covenant against another purchaser. Wood V-C (afterwards Lord Hatherley) held that the estate vendor had precluded himself from enforcing the covenant. But if the earlier breaches were minor313 or different314 or related to another part of the estate,315 they will not prevent enforcement against another plot owner. 13.164 But where there is no building scheme, the fact that an owner of the benefited land has not enforced covenants affecting the plots of some owners will not (on that ground) prevent him from enforcing them against another owner. Thus, in Chatsworth Estates Co v Fewell,316 the claimants’ predecessors in title had imposed covenants on various purchasers restricting the use of any house otherwise than as a private dwelling house. The claimants or their predecessors had nevertheless expressly authorised the use of various houses for the purposes of several different schools, several blocks of flats, a hotel and three boarding houses and had taken no action in respect of some half a dozen other boarding houses. Farwell J held that these acts and omissions did not prevent the claimants from restraining the defendant from using his house as a guest house.

309 310 311 312 313 314 315 316

See, ibid, para 71. [2008] 1 P&CR DG 20. Earl of Zetland v Hislop (1882) 7 App Cas 427, at p 460. (1867) LR 3 Eq 515. Meredith v Wìlson (1893) 69 LT 336. Osborne v Bradley [1903] 2 Ch 446, at p 457; Chitty v Bray (1883) 48 LT 860. German v Chapman (1877) 7 ChD 271. [1931] 1 Ch 224.

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13.165  Remedies for breach of a restrictive covenant Further, even where there is a building scheme, see Turner v Pryce at para 13.144 above.317

(3) Acts of the claimant causing a change in the character of the area 13.165 Where, as a matter of construction of the covenant, it appears that the object sought to be attained is dependent upon the maintenance of a given character attaching to the area surrounding the benefited land, if the character of the area is altered by the acts of the claimant or of his predecessors in title then ‘The question is whether from the altered state of the property, altered by the acts of the party himself, he has not thereby voluntarily waived and abandoned all control which was applicable to the property in its former state.’318 13.166 In Duke of Bedford v British Museum Trustees,319 by a conveyance executed in 1675, an ancestor of the Duke of Bedford conveyed land consisting of open fields in Bloomsbury (on which the British Museum now stands) to a Mr Montagu who covenanted with the vendor not to erect any buildings on it except a mansion house. At the time of the conveyance, the vendor owned a mansion house called Southampton House but this was pulled down in 1800 to make way for the construction of new streets and buildings in the whole of the surrounding area. In 1822 the trustees of the British Museum who had acquired the mansion house built by Mr Montagu proposed to erect certain additional buildings in the gardens and the Duke then issued proceedings for an injunction. Lord Eldon and Sir T Plummer MR refused the injunction. The decision was based on two grounds of which one was that the covenant entered into by Mr Montagu was based on the assumption that all the property between Gower Street and Brunswick Square would remain open fields and when this area was built up the covenant ceased to be enforceable. However, since this defence320 is based on the principle of implied waiver or abandonment or inequitable conduct,321 it must be shown that the change in the character of the neighbourhood was caused322 or personally acquiesced in323 by the claimant or his predecessors.

Changes in the character of the neighbourhood per se 13.167 There appears to be no reported case where an action to enforce a restrictive covenant has been defeated solely on the basis of changes in the

317 [2008] 1 P&CR DG 20. 318 Per Sir T Plumer MR in Duke of Bedford v British Museum Trustees (1822) 2 My & K 552, at p 572. 319 Above. 320 As opposed to the more fundamental defence of change in the character of the neighbourhood considered below. 321 (1822) 2 My & K 552, p 576. 322 Sayers v Collyer (1884) 28 ChD 103. 323 Pulleyne v France (1912) 57 Sol Jo 173, CA; Peek v Matthews (1867) LR 3 Eq 515. See also Turner v Pryce [2008] 1 P&CR DG 20, where, despite inaction by predecessors in title, the claimants personally had not had cause to take any action following the purchase of their property.

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Defences to remedies generally or to the equitable remedy etc 13.170 character of the neighbourhood not brought about or acquiesced in by the claimant.324 13.168 In Sobey v Sainsbury325 Sargant J, whilst deciding that the acts and omissions of the claimant were amply sufficient to prevent the court granting an injunction, took the view that if they were not enough, then the court was entitled to take a general change in the character of the neighbourhood into account irrespective of whether it was attributable to any acts or omissions on the part of the claimant or his predecessors in title. This was a case of the claimant and the defendant owning plots which were subject to a building scheme and, in reviewing the extent of the change in the character of the neighbourhood, Sargant J treated as relevant the changes which had taken place not only on the scheme land but also on other land in the area.326 13.169 In Chatsworth Estates Co v Fewell,327 the defendant sought to rely on the defence of a general change in the character of the neighbourhood apart from the claimants’ acts or omissions, and alternatively on an allegation that such a change had been brought about as a result of permissions given by the claimant, but the defence failed on both scores. In regard to the former, Farwell J said in the course of his judgment:328 ‘But to succeed on that ground the defendant must show that there has been so complete a change in the character of the neighbourhood that there is no longer any value left in the covenants at all. A man who covenants for the protection of his property cannot be deprived of his rights thereunder merely by the acts or omissions of other persons unless those acts or omissions bring about such a state of affairs as to render the covenants valueless, so that an action to enforce them would be unmeritorious, not bona fide at all, and merely brought for some ulterior purposes.’ 13.170 This statement of the law encapsulates the views expressed by the members of the Court of Appeal in Knight v Simmonds329 that for the defence to succeed the character of the neighbourhood must be so altered that ‘the object to be attained by the covenant cannot be attained’,330 or that ‘the object with which the covenant was originally entered into was to be considered at an end’,331 and that ‘the alteration of the estate must be a very considerable one indeed’,332 However, in Hunt v Molnar,333 Roxburgh J said that he proposed to

324 For changes which were so brought about, see above, para 13.165. 325 [1913] 2 Ch 513, at p 529. 326 In Chatsworth Estates Co v Fewell [1931] 1 Ch 224, Farwell J, arguendo, at p 227, doubted whether that was right and in Bell v Norman C Ashton Ltd (1956) 7 P&CR 359, at p 370, Harman J expressed similar doubts. 327 [1931] 1 Ch 224. 328 Ibid, at pp 229–230. 329 [1896] 2 Ch 294. 330 Per Lindley LJ, ibid, at p 298. 331 Per Lopes LJ, ibid, at p 300. 332 Per Kay LJ, ibid, at p 302. In Sobey v Sainsbury, above, the change in the character of the neighbourhood consisted of a part of Christchurch Road, near Bournemouth, being transformed from being, in 1888, a quiet country lane with a few houses on either side, to one continuous line of shops (with the exception of one small pair of semi-detached villas) with electric trams running at frequent intervals along the road making it ‘an extremely busy shopping and commercial thoroughfare’. Sargant J refused an injunction, although primarily on the ground of acquiescence, to restrain the defendant from building a shop on his plot fronting onto Christchurch Road in breach of a covenant restricting buildings to private dwelling houses. 333 (1956) 7 P&CR 224.

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13.171  Remedies for breach of a restrictive covenant rest on the test suggested by James LJ in German v Chapman334 which reads as follows: ‘If there is a general scheme for the benefit of a great number of persons, and, either by permission or acquiescence, or by a long chain of things, the property has been either entirely or so substantially changed as that the whole character of the place or neighbourhood has been altered so that the whole object for which the covenant was originally entered into must be considered to be at an end, then the covenantee is not allowed to come into the court for the purpose merely of harassing and annoying some particular man, where the court could see he was not doing it bona fide for the purpose of effecting the object for which the covenant was originally entered into.’ 13.171 In practical terms, a party affected could always, of course seek the discharge of the covenant by the Upper Tribunal under section 84(1)(a) of the Law of Property Act 1925 (see below in relation to a stay for this purpose). The court may generally expect this to be done rather than determining the matter itself (particularly given the Tribunal’s specialist expertise in relation to such matters, which it frequently has to determine). However, this would involve inconvenience and expense and if the case was clear the court could simply in the exercise of its discretion refuse to grant an injunction and award merely nominal damages (with costs under the CPR to the defendant).

STAY OF PROCEEDINGS UNDER SECTION 84(9) OF THE LAW OF PROPERTY ACT 1925 13.172 Whilst not providing a defence, this subsection enables a defendant to seek leave to apply to the Upper Tribunal for the modification or discharge of a restrictive covenant whose enforcement is being sought and for a stay of the enforcement proceedings pending the determination of such application. The subsection provides as follows: ‘Where any proceedings by action or otherwise are taken to enforce a restrictive covenant, any person against whom the proceedings are taken, may in such proceedings apply to the court for an order giving leave to apply to the Upper Tribunal under this section, and staying the proceedings in the meantime.’

Extent of the subsection 13.173 The subsection does not only apply where proceedings are taken to enforce the restrictive covenant followed by a proposed application to the Upper 334 (1877) 7 ChD 271, 279. Roxburgh J concluded his judgment by remarking that it was consoling that, in granting the application for an interim injunction, he was reaching the same decision as the Lands Tribunal had reached (in Re M Howard (Mitcham) Ltd’s Application (1956) 7 P&CR 219) relating to another plot on the same estate (the Wimbledon House Estate) when the Lands Tribunal decided that there was no such change in the character of the neighbourhood as rendered the covenant ‘obsolete’ within the meaning of section 84(1)(a) of the Law of Property Act 1925. Conversely, it would appear that where the Lands Tribunal has found a sufficient change in the character of the neighbourhood to declare a restriction obsolete, then this would support a defence in respect of other covenants relating to properties in the same neighbourhood.

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Stay of proceedings under LPA 1925, s 84(9) 13.176 Tribunal, as might appear at first blush. It applies whether an application to the Upper Tribunal for modification or discharge has been made at the time an action is commenced, or where it is proposed after the commencement of the action to apply to the Upper Tribunal for such release or modification. No permission as such has ever been needed to apply to the Tribunal. Therefore, what the intention of the statutory provision is, and what it means, is that the court has power to grant a stay, on terms as to expeditious prosecution of the application to the Upper Tribunal, and the order in time of that application and of the commencement of the action makes no difference to the existence of the power in section 84(9), which covers the position whichever of them comes first: see Luckies v Simons.335 13.174 If the claimant was to seek an interim injunction, then if the circumstances are such that the court would, apart from the Upper Tribunal proceedings, be likely to grant an interim injunction, it seems probable that the court would likewise do so pending the determination of the application to the Tribunal, or require an undertaking to like effect as a condition of the stay, as Ungoed-Thomas J did in Hanning v Gable-Jeffreys Properties Ltd336 (and requiring the defendant to prosecute that application to the Upper Tribunal with all due diligence).337 13.175 In Holdom v Kidd,338 the Court of Appeal upheld the grant by the county court of an interim injunction restraining the defendants from using land restricted to agricultural purposes only for the purpose of accommodating gipsy caravans. The defendants argued, unsuccessfully, that the injunction should not have been granted since they had applied for planning permission to permit the use in question and that should they be successful, they intended to apply for a stay of the injunction proceedings under section 84(9) pending the result of an application they would then make to the Lands Tribunal to have the restrictive covenant modified or discharged. The Court of Appeal held that it was within the ambit of the judge’s discretion to refuse the injunction on the basis the covenant remained in force until discharged or modified (if that was ultimately the result), and the use of the site should be discontinued in the meantime. 13.176 In Iveagh v Harris,339 Eve J held that forfeiture proceedings brought by a landlord on the ground that the defendant tenant had committed a breach of a restrictive covenant in a lease were not proceedings ‘taken to enforce a restrictive covenant’ within the meaning of the subsection. Similarly, it would seem that if in the case of a restrictive covenant between freeholders a right of re-entry were made exercisable on breach, an action for the enforcement of such right of re-entry would not amount to such proceedings.340 In these cases also, therefore, there would be no jurisdiction under section 84(9) to order a stay.

335 [2003] 2 P&CR 30. 336 [1965] 1 WLR 1390. 337 In the case of the breach consisting of a change of user which had already been implemented, then whether the court would impose a term requiring the discontinuance of the use pending the outcome of the Upper Tribunal proceedings would probably depend upon whether it would, apart from the application, have granted an interim injunction restraining such use. 338 (1990) 61 P&CR 456. 339 [1929] 2 Ch 142. 340 As to rights of re-entry in the context of covenants, see paras 13.5–13.6 above and para 29.3 et seq below.

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13.177  Remedies for breach of a restrictive covenant

The position where section 84(9) does not apply 13.177 However, following the introduction of the Civil Procedure Rules the court could in an appropriate case, even where that is so, exercise its general discretion under CPR, rule 3.1(2)(f) to order a stay pending a determination. By CPR, rule 3.1(2) ‘the court may … (f) stay the whole or any part of the proceedings or judgment either generally or until a specified date or event’. Similar principles for the grant of a stay as under section 84(9) would be likely to be applied on such an application, although the authorities in relation to that, which will now be referred to, would be of persuasive rather than binding effect as such.341

Grounds for granting leave and ordering a stay under section 84(9) 13.178 As Eve J pointed out in Feilden v Byrne,342 there is nothing in the subsection to guide the court in the exercise of the power conferred by the subsection and his lordship found himself in ‘some difficulty in determining the principles on which this jurisdiction ought to be exercised.’ In that case, in an action by a freeholder to enforce a restrictive covenant, Eve J granted leave where the defendants claimed that by reason of changes in the character of the neighbourhood, they would be likely to succeed in obtaining a modification of the restriction. The ground of the decision was that since the court itself could not modify the covenant, the defendant ought not to be denied the opportunity of having the matter dealt with by the body which did have that power. 13.179 In Richardson v Jackson,343 Danckwerts J also expressed himself as feeling ‘some difficulty in deciding exactly the grounds on which the order should be made’ but went on to state that except where it is plain to the court, on the evidence, that an application to the Tribunal would have no real chance of succeeding, or where the defendant has failed to apply to the court promptly, the application for a stay should normally be acceded to. It does not appear precisely what evidence was placed before Danckwerts J or the standard of proof which was expected, but clearly some evidence of the existence of a case to put to the Tribunal is required. In that case a stay was granted notwithstanding a delay of more than six months after delivery of the statement of claim in June, but Danckwerts J, whilst recognising that the defendants’ advisers were entitled to some time in which to examine the circumstances and to obtain evidence, voiced some criticism that the application had not been made at least during October rather than in December.344 Danckwerts J also expressed the view that it is not

341 See the approach of the Master in Luckies v Simons as set out on appeal at [2003] 2 P&CR 30 (though the Master was found to have been wrong in concluding that s 84(9) did not apply in the instant case, and in the conclusion he reached in the exercise of his discretion, though he applied the same considerations as if the matter had fallen within s 84(9)). 342 [1926] Ch 620, at p 624. 343 [1954] 1 WLR 447. 344 And it must be borne in mind that in the context of the case the overall delay was more excusable than it would today be because two of the six-and-a-half months’ delay were in the ‘the silent’ Long Vacation whereas today activity is expected during such a period in summer as at other times: see Luckie v Simons [2003] 2 P&CR 30, at para 20.

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Stay of proceedings under LPA 1925, s 84(9) 13.181 necessary for an application to the Tribunal to be have been made before the issue of proceedings because until the claimant has proceeded with his action the defendant may well think that the claimant does not propose really to attempt to enforce the covenants.345 Nevertheless, the failure of the defendant to have made an application to the Tribunal before the action was commenced, while not excluding the jurisdiction, may be a ground for the court refusing to exercise it. 13.180 In Chatsworth Estates Co v Fewell,346 the claimants first complained of the breach of covenant in June, and in October the defendant suggested that the covenants could be modified under section 84(1) of the Law of Property Act 1925. In the same month the claimants replied that they were instructed to issue a writ but would hold their hands ‘for a few days’ so that the defendant could let them know whether he proposed to apply for a modification under the section. Nothing further was done until the claimants commenced an action for an injunction and damages in the following June. In the following January, the defendant asked the claimants to allow the matter to be determined under section 84(1) but the claimants said that the action must go on. The defendant made no interlocutory application but at the trial of the action in November asked that if an injunction were to be made, it should be suspended pending the outcome of an application under section 84(1). In refusing the request Farwell J said:347 ‘As the defendant elected not to make an application before action, but to wait and see whether the [claimants] would really bring an action, I ought not to deprive the claimants of the fruits of their victory by postponing the operation of the injunction for possibly a considerable period.’ 13.181 In Shepherd Homes Ltd v Sandham,348 the application was made by cross-motion in response to the claimant company’s application by motion for an interlocutory injunction. The application for an injunction was refused on its merits and in dealing with the cross-motion Megarry J said:349 ‘The principle is that an application for a stay on this ground, if made with sufficient promptitude, should always be granted unless it is clear that the application to the Lands Tribunal for a discharge or modification has no real chance of success: Richardson v Jackson350’. Despite the fact that the defendant was the original covenantor who had entered into the covenant only 18 months before the hearing of the application,351 Megarry J formed the view that ‘it seems impossible to regard the proposed application to the Lands Tribunal as having no real chance of succeeding’ and granted leave to apply and a stay pending the determination of the application on terms that (a) ‘the defendant make … and prosecute his application to the Lands Tribunal with all due diligence and … notify the [claimant] company promptly of the making and progress of the application’ and (b) ‘the defendant 345 In this respect, Danckwerts J must have had in mind the general power of the court to order an adjournment pending the outcome of a hearing by the Tribunal since the power conferred by section 84(9) only arises where no proceedings before the Tribunal are on foot when the action is commenced. 346 [1931] 1 Ch 224 (Farwell J). This case does not appear to have been cited in the case before Danckwerts J. 347 Ibid, at p 234. 348 [1971] Ch 340. 349 Ibid, at p 352E. 350 [1954] 1 WLR 447. 351 See further, as to this aspect, paras 16.83 et seq and 16.92 et seq below.

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13.182  Remedies for breach of a restrictive covenant will not oppose any application that may be made to the Lands Tribunal for an early hearing.’352 13.182 A similar application came before Ungoed-Thomas J in Hanning v Gable-Jeffreys Properties Ltd353 but here the merits of the application would have justified the granting of an interim injunction. However, the cross-application for leave and a stay was also meritorious and was granted (ultimately by consent) on the terms just referred to.354 Where the application for leave and a stay succeeds, the costs of the application will usually be costs in the action.355 13.183 At the front of the court’s mind will inevitably be that only the Upper Tribunal can grant release or modification of the covenant, which is not something the courts can do, and that if a stay is not granted the enforcement of the covenant is being made in circumstances where it may turn out not really appropriate because discharge or modification should be made. This was clearly the most important influence on the court in the relatively recent case of Luckies v Simons,356 where a stay was granted after a delay of four and a half months after the issue of proceedings.357

(5)  DAMAGES AT COMMON LAW 13.184 A claim for damages for breach of covenant at common law will only be possible where the claimant’s right to enforce the covenant is a legal right.358 13.185 In the case of such a claimant, damages at common law should always be claimed since the claimant will be entitled to them (in addition to any other remedy) as of right and not merely as a matter of discretion under section 50 of the Senior Courts Act 1981. 13.186 In general, the measure of damages at common law is determined by reference to the two rules in Hadley v Baxendale.359 Under the first rule the damages are measured by reference to the difference between the financial position of the claimant on the footing that the covenant had been complied with and his financial position having regard to the breach. Under the second rule (where applicable) damages are assessed on the basis of the evidence as to the type of loss which the parties contemplated, at the time they entered into the covenant, would result from a breach. 13.187 In the case of breaches of a restrictive covenant, the primary remedy is, of course, an injunction, and the question of the measure of common law damages has not featured significantly in the reports. Such damages are compensatory, however (as indeed they are under Lord Cairns’ Act: Jaggard v Sawyer360). See para 13.80 above. 352 In Shepherd Homes Ltd v Sandham (No 2) [1971] 1 WLR 1062, Megarry J refused an application made by summons for the removal of the stay. 353 [1965] 1 WLR 1390. 354 At the end of para 13.181. 355 As in Feilden v Byrne, above and Richardson v Jackson, above. 356 [2004] 2 P&CR 30. 357 See, especially, para 20. 358 As to this, see above, para 13.30. 359 (1854) 9 Exch 341. 360 [1995] 1 WLR 269.

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Damages at common law 13.191 Where the claimant has put it out of his power to obtain an injunction against the building of more than a certain number of houses permitted by a covenant, for example, by not bringing proceedings until after the defendant has sold the houses, so that the claimant is unable to obtain an injunction by reason of the sale, no more than nominal damages will be able to be recovered at common law: see Surrey County Council v Bredero Homes Ltd.361 13.188 In these circumstances, the only possibility for the claimant would lie in seeking a restitutionary award by reference to the defendant’s gain, but in Surrey County Council v Bredero Homes Ltd362 the Court of Appeal declined to extend the category of cases in which a restitutionary award is available to cover such cases. The Bredero Homes case related to breaches of a positive covenant (though the positive covenants concerned, to develop a housing estate in accordance with the terms of a specified planning permission and approved scheme, implicitly meant there was a restriction not to develop in any other way) but had the breach involved a pure restrictive covenant, then on corresponding facts as to the absence of any loss and the defendant no longer owning any of the land affected, there is no doubt the result of an award of purely nominal damages would have been the same. 13.189 The limitation period for a claim in damages by the original covenantee against the original covenantor where the covenant is a specialty is 12 years (section 8 of the Limitation Act 1980). A ‘specialty’ has always had a somewhat imprecise meaning but has traditionally been said to include a document ‘under seal’.363 Following the revised requirements for deeds in section 1 of the Law of Property (Miscellaneous Provisions) Act 1989, a deed in accordance therewith is likely to be sufficient. Accordingly, any covenant contained in a conveyance is likely to be within this. Otherwise, the action will be one for simple breach of contract, where the limitation period is one of six years (section 5 of the 1980 Act). 13.190 The cause of action accrues at the date of breach. The breach may be a one-off breach (eg constructing a building in breach of covenant), when time will run from the time when the covenant is broken, or a continuing breach (eg using land in a way that is not permitted, for example where there is a restriction against causing a nuisance), in which case the cause of action is continually recurring each day it continues and can be sued on accordingly. A claim by a successor to the original covenantee can be made only in equity, but the same limitation periods are likely in effect to apply as set out at para 13.114 above. 13.191 In cases of disability, concealment or mistake, or of fraud, sections 28 and 32 of the 1980 Act, and in equity, equitable principles, extend the time limit by providing that time does not begin to run until the disability ends or the fraud, concealment or mistake has been discovered or could reasonably have been discovered. A claim to damages may in appropriate circumstances be barred by proprietary estoppel (as to which, see para 13.155 above). 361 [1993] 1 WLR 1361. 362 [1993] 1 WLR 1361. 363 See, eg Aiken v Stewart Wrightson Members Agency Limited [1995] 1 WLR 1281, at pp 1291–1293.

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14 Freeing the title from unenforceable restrictive covenants

INTRODUCTION 14.1 Having regard to the highly detailed and technical rules relating to the running of the benefit and burden of restrictive covenants considered in Chapters 1–9, it is not surprising that, when once the benefited and the burdened land have changed hands, it has often been found that the covenants have ceased to be enforceable. This is particularly so in the case of pre-1925 covenants where no building scheme was created. Where there is a building scheme, or the covenants were entered into after 1925, then given the enhanced chances of the passing of the benefit by this automatically occurring,1 there is correspondingly less likelihood that the covenants have ceased to be enforceable.2 14.2 Assuming, however, that the indications are that the benefited land has changed hands in circumstances in which the rules relating to the passing of the benefit of restrictive covenants have not been complied with or the burdened land has changed hands in circumstances in which, by reason of the absence of notice or registration, the burden has not passed, then the question arises as to how the title can be shown to be free from the covenants with a sufficient degree of certainty to satisfy a prospective purchaser.

INSURANCE AGAINST ENFORCEMENT 14.3 Where the factual and legal position supports a conclusion of nonenforceability and no claim to enforce the covenants has been made, then it may well be relatively easy to obtain a policy of insurance providing an indemnity up to an agreed amount in the event of loss being suffered as a result of the subsequent enforcement of the covenants.3 This is commonly done. 1

As to building schemes, see Chapter 8 and, as to post-1925 covenants, see the discussion on s 78(1) of the Law of Property Act 1925 in Chapter 6. 2 Although in one respect post-1925 restrictive covenants are more vulnerable by reason of their dependence on registration under the Land Charges Acts 1925 and 1972 or Land Registration Act 2002, as the case may be: see Chapter 9. 3 In Wrotham Park Estate Co v Parkside Homes Ltd [1974] 1 WLR 798, for a total premium of £700, Eagle Star Insurance Co Ltd issued a policy indemnifying each of the 14 purchasers of individual houses against loss up to £20,000 each even after the proceedings in the case had been commenced although subject to a counter-indemnity from Parkside Homes Ltd.

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14.4  Freeing the title from unenforceable restrictive covenants However, a limited indemnity is not the same as permanent freedom from liability for breach of covenant and in cases where it is not acceptable or insurance is not available, then an effective, albeit more cumbersome, time-consuming and expensive, procedure is available under section 84(2) of the Law of Property Act 1925, for clearing the title of restrictive covenants which can be shown to have become unenforceable.

PROCEEDINGS FOR A DECLARATION UNDER SECTION 84(2) OF THE LAW OF PROPERTY ACT 1925 The court’s powers 14.4

Section 84(2) of the Law of Property Act 1925 provides as follows:

‘(2) The court shall have power on the application of any person interested— (a) to declare whether or not in any particular case any freehold land is, or would in any given event be, affected by a restriction imposed by any instrument; or (b) to declare what, upon the true construction of any instrument purporting to impose a restriction, is the nature and extent of the restriction thereby imposed and whether the same is, or would in any given event be, enforceable and if so by whom. Neither subsections (7) and (11) of this section nor, unless the contrary is expressed, any later enactment providing for this section not to apply to any restrictions shall affect the operation of this subsection or the operation for the purposes of this subsection of any other provisions of this section.’ 14.5 In cases to which the subsection applies, it enhances the ability to obtain declarations from the court in two important respects. 14.6 First, the words ‘or would in any given event be’ in both paragraphs (a) and (b) above expressly enables the court to deal with questions affecting the enforceability of restrictive covenants which are based upon either future events or hypothetical facts. Thus, a declaration may clearly be sought as to what the position would be in the event of the land being sold to a future purchaser4 or whether a proposed use of land would constitute a breach of covenant.5 14.7 Second, whereas an ordinary declaratory judgment binds only the parties to the proceedings and their privies (though persuasive in relation to others), a declaration under the subsection is ‘binding on all persons, whether ascertained or of full age or capacity or not, then entitled or thereafter capable of becoming entitled to the benefit of any restriction, which is thereby … dealt with, and whether such persons are parties to the proceedings or have been served

4 Contrast Re Gadd’s Land Transfer [1966] Ch 56 which was decided before the introduction of these words into the subsection by the Law of Property Act 1969. In that case, however, Buckley J made a declaration under the general jursidiction conferred on the court under what was then RSC Order 5, rule 4 which he considered to be wide enough to cover the situation before him. 5 National Schizophrenia Fellowship v Ribble Estates SA (1993) 25 HLR 476 (Mr Jules Sher QC sitting as a deputy High Court judge). This avoids any doubt as to whether the court should determine such questions under its ordinary jurisdiction: see, para 13.12 above.

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Proceedings for declaration under the LPA 1925, s 84(2) 14.10 with notice or not’.6 A declaratory judgment under the subsection thus operates in rem and completely clears the title from all claims inconsistent therewith.7

Scope of section 84(2) 14.8

Section 84(2) of the 1925 Act authorises declarations to be made as to:

(1) whether any given freehold (or, where the term granted was for more than 40 years of which at least 25 years have already expired, leasehold8) land is, or would, in any given event be, ‘affected’ by ‘a restriction imposed by any instrument’9 (paragraph (a)); (2) what, upon the true construction of the instrument, is the ‘nature and extent’ of the restriction (paragraph (b)); (3) whether the restriction is, or would in any given event be, ‘enforceable’ and if so by whom10 (paragraph (b)). 14.9 The effect of the final part of section 84(2), as set out above (which was added by the Law of Property Act 1969), is that although the restrictive covenants referred to in subsections 84(7) and (11)11 are, in those subsections, stated to be covenants to which the section does not apply, this is not the case for the purposes of applications to the court under section 84(2) (although it remains so for the purposes of applications to the Upper Tribunal under section 84(1)12). 14.10 In Re 6, 8, 10 and 12 Elm Avenue, New Milton,13 declarations were sought in relation to all three of the matters just set out. On the claim under (1), above, it was unsuccessfully argued that the effect of the acquisition of the burdened land by Lymington Borough Council (whose functions and assets were subsequently taken over by New Forest District Council) for statutory purposes was to extinguish the covenant in question, but Scott J held that whilst such an acquisition extinguished the right to an injunction as against the council, the land was still ‘affected’ by the covenant to the extent that the covenant could be the subject of a claim for compensation for injurious affection.14

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Law of Property Act 1925, s 84(5). As to the effect of this where the covenant is registered as a land charge under the Land Charges Act 1972 or protected by an entry on the charges register of a title registered under the Land Registration Act 2002, see below, para 14.31. 8 Section 84(12). There are no reported cases of applications under sub-s (2) relating to leaseholds. 9 By s 205(1)(viii), ‘instrument’ does not include a statute, unless the statute creates a settlement. 10 This declaration is potentially much wider than that under (1), since it will enure for the benefit of all the land originally burdened by the covenant. It will accordingly only be granted where the claimant owns all of such land: see Re Jeffkin’s Indentures [1965] 1 WLR 375. 11 Restrictions imposed as part of a dispositions made gratuitously or for nominal consideration for public purposes (s 84(7)) or certain restrictions imposed by the Crown (s 84(11)). Section 84 is set out in full in Appendix 1 in the appendices below. 12 As to which, see Chapter 16. 13 [1984] 1 WLR 1398. 14 See, further, on this point, above, para 10.75. It may be questioned whether the court had jurisdiction, under s 84(2), to declare that the remedy of injunction was not available to prevent the council from proceeding to construct the car park whilst (for good legal reasons)

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14.11  Freeing the title from unenforceable restrictive covenants On the claim under (2), it was held that use of the land as a public car park would constitute non-compliance with the terms of the covenant that ‘no trade or business’ should be carried on thereon. On the claim under (3), Scott J was not prepared to find, on the basis of affidavit evidence in an unopposed application under the subsection, that there was no building scheme (this being the only basis on which the covenants might be enforceable) and so was not prepared to make a declaration that there was no person able to enforce the covenant. 14.11 Declarations of all three kinds were also sought in Shropshire County Council v Edwards,15 where Judge Rubin sitting as a High Court judge, declared that the benefit the covenant in question had been annexed to land belonging to certain of the defendants and that it was accordingly enforceable by them and also made a declaration as to the true construction of the covenant. A declaration of type (2) was more recently granted by the Court of Appeal in Coventry School Foundation Trustees v Whitehouse (see 11.130 above).16 14.12 Section 84(2) is able to be used by landowners to determine whether they are entitled to proceed with particular works or new uses on their land, notwithstanding the existence of a restrictive covenant in particular terms, prior to commencing those works or new uses, and entering into arrangements in relation to something that when commenced may otherwise be the subject of an injunction application.

Procedure Forum for, and form of, proceedings 14.13 A claim for a declaration under section 84(2) brought in the High Court must, by section 203(4) of the Law of Property Act 1925, be brought in the Chancery Division. 14.14 Prior to the Civil Procedure Rules (CPR), such a claim had to be brought by originating summons. It can now be brought under Part 8 of the CPR (which has no requirement for pleadings and is generally quicker than using Part 7) if there is unlikely to be a substantial dispute of fact.17

not being prepared to hold that the land was no longer ‘affected’ by the covenant. If a covenant legally ‘affects’ land, the subsection would not appear to be appropriate for determining the question of the remedy which is available to enforce it. Similarly, in regard to the third type of declaration, a covenant would remain ‘enforceable’ even though the circumstances merely entitled some person to claim damages either at common law or damages in lieu of any injunction under s 50 of the Supreme Court Act 1981. These issues properly fall to be considered under the general jursidiction of the court. It seems, however, from this case and also from Re Gadd’s Land Transfer [1966] Ch 56, that the court will readily invoke its general jurisdiction to decide any questions which fall outside the scope of the subsection. 15 (1982) 46 P&CR 270. A declaration of kind (2) only was sought (and granted) in Elliott v Safeway Stores plc [1995] 1 WLR 1396. 16 [2014] 1 P&CR 4. The court finding it unnecessary to decide whether the judge had been right to refuse a declaration under (1) that the benefited land had not been sufficiently identifiable for there to have been annexation. A declaration of kind (2) was sought by counterclaim in Elliott v Safeway Stores plc [1995] 1 WLR 1396 and granted. 17 See CPR, rule 8.1(2)(a).

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Proceedings for declaration under the LPA 1925, s 84(2) 14.17 There is no reason why Part 7 (the Part of the CPR applicable for the determination of factual disputes) could not be used if there is a substantial dispute of fact that needs to be determined in order to decide the matter, however (or a claim started under Part 8 transferred to Part 7, once this becomes clear18). 14.15 Part 8 is nonetheless the usual mode of proceeding. The Part 8 claim form must state that the claim is being made under section 84(2) of the Law of Property Act 1925,19 and the question the claimant wants to decide or the remedy the claimant is seeking and the legal basis for the claim to that remedy.20 It is prudent for the court to be asked to grant in addition to the declaration sought, an order for the vacation of the registration of the restrictive covenant under the Land Charges Act 1972 pursuant to section 1(6) of the Land Charges Act 1972 or, in the case of registered land, for the removal of the relevant entries from the charges register of the registered title, pursuant to section 65 and Schedule 4, para 2(1)(b) to the Land Registration Act 2002 or, if and in so far as may be necessary, under the inherent jurisdiction of the court.21 14.16 The Part 8 claim form, must be filed and served together with all necessary witness statements, exhibiting the necessary documentation, to make good the claim (or which will be relied upon to argue it): see CPR, rule 8.5(1) and (2). Following service, the defendant has 14 days in which to file and serve an acknowledgment of service and any evidence in response (see CPR, rule 8.5(3) and (4)). The claimant may then within 14 days of service of that evidence upon him, file and serve further written evidence in reply (CPR, rule 8.5(5) and (6)). An extension of time for any of these steps may be sought from the court under Practice Direction 8A, para 7.4. 14.17 The county court appears no longer to have jurisdiction to make an order under section 84(2). The jurisdiction of the county court is wholly statutory. Section 22 of the County Courts Act 1984 gave the county court jurisdiction to grant declarations relating to ‘the possession, occupation, use or enjoyment of land’. However, the Courts and Legal Services Act 1990 repealed section 22. Section 21 gives jurisdiction to determine any action for the recovery of land, but that obviously does not include making declarations in relation to covenants

18 Under CPR, rule 8.1(3). The court has the ability under CPR, rule 8.6(2) and (3) to order oral evidence and cross-examination in relation to a claim proceeding under Part 8 without transferring the claim to Part 7, but this would be unusual and will not be done where there is a substantial dispute of fact. Part 7 is appropriate in such a case, with attendant pleadings, disclosure, listing, and trial procedures. 19 CPR, rule 8.2(c). 20 CPR, rule 8.2(b). In practice, both will be expected to be stated. 21 See para 14.31 below. There seems no reason why entries relating to charges should not be ordered to be removed from the register in order to bring it ‘up to date’. Cf Stein v Stein [2004] EWHC 3212 where Patten J, in a different context, said at para 26 that ‘the court does not have under the LRA 2002 the power which used to exist in relation to cautions, simply to order the vacation of the caution when it is satisfied that it is inappropriate for it to remain registered. But only to order an alteration of the register for the purpose of correcting a mistake, bringing the register up to date, or giving effect to an estate of right or interest excepted from the effect of registration’. However, he said that ‘although further intervention of the court may ultimately be necessary if the Land Registry feels unable itself to remove the restriction’ (suggesting it does have such a power if necessary), ‘the overwhelming likelihood, and I am going to assume that this will be done, is that when presented with a copy of this judgment and the order which I am about to make, the Land Registry will exercise the power vested in the registrar under paragraph 2(2) of Schedule 4 to remove what amounts to a superfluous entry’.

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14.18  Freeing the title from unenforceable restrictive covenants under section 84(2) of the 1925 Act. Section 203 of the Law of Property Act 1925 itself simply says that reference to ‘the court’ in the Act, including therefore in section 84(2), ‘means the High Court, or the county court, where those courts respectively have jurisdiction’, and there appears, following the repeal of section 22 of the County Courts Act 1984, no provision giving it jurisdiction. This may appear surprising, particularly when the general trend over recent years has been to increase the jurisdiction of the county court, but in reality most cases would in any event be likely to be most suitable for determination in the Chancery Division. That includes, of course, the District Registries, and there are trial centres in major cities outside London.

Parties 14.18 The court’s powers may be exercised on the application of ‘any person interested’, that is to say, any person having a legal or equitable interest in the benefited or the burdened land.22 The type of conditional contract which established the locus standi of the claimant company to seek a declaration in J Sainsbury plc v Enfield London Borough Council23 is not untypical of background events giving rise to an application under the subsection. However, a mere intending purchaser, such as the applicant in Re Gadd’s Land Transfer,24 would still25 not qualify as a competent claimant under the subsection. 14.19 The question of who, if anyone, should be joined as a defendant will receive a different answer according to the circumstances. In the case of the claimant being a person interested in the burdened land (with whom this chapter is primarily concerned), the steps to be taken in resolving this question are as follows: (1) there should first be ascertained the full extent of the land of the original covenantee which may have been capable of benefiting from the covenant;26 (2) every reasonable endeavour should then be made to ascertain the identity of the present owners and occupiers of such land or any individual part or parts thereof; (3) steps should then be taken to ascertain the existence and identity of any persons having derivative interests in any of such land, such as mortgagees. 14.20 Before joining those identified by these means as defendants to the intended claim, a circular letter should be sent to each of them informing them of the existence and terms of the covenant, of the claimant’s desire to develop the land in a particular way which would or might be inconsistent with the terms of the covenant, of the claimant’s belief, based upon legal advice, that the covenant is no longer enforceable and of the claimant’s intention to apply to the court under section 84(2) of the Law of Property Act 1925 for a

22 See Stevens v Hutchinson [1953] Ch 299, a decision on the use of the phrase in s 30 of the Law of Property Act 1925. 23 [1989] 1 WLR 590. 24 [1966] Ch 56. 25 After the amendments to the subsection made by the Law of Property Act 1969. 26 As to the potential extent of such land, see above, para 1.19 et seq.

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Proceedings for declaration under the LPA 1925, s 84(2) 14.21 declaration to that effect and inviting them to indicate whether it is their wish to be joined as a defendant to the proceedings or whether they are prepared to consent to an order in the terms of the intended declaration.27 A suggestion they may wish to seek legal advice would clearly be desirable. It should also request that particulars of the name and address of any mortgagee or other person or body having an interest in the land should be supplied with their reply. The letter might also enclose a form of consent to the declaration sought, for signature and return. After the expiration of a reasonable period, perhaps, depending on the circumstances, three or four weeks (plus any extended period necessary to write a similar letter to any mortgagees or others and to deal with any reasonable requests for further particulars), the claim form should then be issued joining as defendants those persons who have not signed and returned the form of consent. If all the addressees consent or if it is initially impossible to ascertain the existence or identity of any potential claimant of the benefit of the covenant, then the claim form may be issued without naming anyone as a defendant.28 This is envisaged by CPR, rule 8.2A to be the subject of a Practice Direction, though in fact none has been made. The pre-CPR practice of issuing the claim without naming an interested party continues to be followed in such a case, however, with the consent of the Master being obtained on a without notice application to issue the claim if the court office will not issue the claim without a defendant being identified. Once the claim form has been issued, any defendants (or additional defendants) that emerge may obviously then be joined at a later stage.29 14.21 The need to follow a procedure along the foregoing lines emerged from the judgment of Maugham J in Re Sunnyfield30 where it was said: ‘When such an order as this is asked for, the Court ought to make every effort to see that all persons who may wish to oppose the making of the order have the opportunity of being heard, stating their objections in argument before the Court, and inviting the Court to refuse to exercise its powers. In the present case, it seems that every effort has been made to give notice to all persons having a probable interest in the property, and accordingly I ought not to refuse to proceed to the hearing of the matter.’ However, when once a person has been joined as a defendant and it is shown that he may be entitled to the benefit of the covenant, the court cannot treat the omission by such defendant to take any active part in the proceedings as an

27 The nature of the appliction should be made known, ideally by a copy of the proposed claim being enclosed so as to leave no doubt as to the precise terms and nature of the declaration sought. In Re 6, 8, 10 and 12 Elm Avenue, New Milton [1984] 1 WLR 1398, Scott J, after observing that a list of all the persons in the area who might conceivably be interested in claiming the benefit of the restrictions had been circulated with notice of the claimant council’s intention to apply for a declaration, observed that this had been done ‘in the context of the wish of the council to construct its car park and it is entirely possible that the overwhelming consents to the construction of the car park that have been received from persons living in the neighbourhood may be simply a reflection on the need of a car park in the area. I think I would be wrong in assuming that by giving those consents the persons giving them were acknowledging that they were not entitled to the benefit of the restrictions’. 28 As with the previous originating application procedure pre-CPR: see, eg in Re 6, 8, 10 and 12 Elm Avenue, New Milton [1984] 1 WLR 1398 where this was done. Although in that case the claimant council was subsequently unable, on the facts, to establish that the land was not affected by the restrictions despite the absence of any opposition. 29 As in Re Ecclesiastical Comrs for England’s Conveyance [1936] Ch 430. 30 [1932] 1 Ch 79, at p 83.

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14.22  Freeing the title from unenforceable restrictive covenants implied consent to an order being made since, unlike section 84(1)(b), there is no mention in section 84(2) of consent by implication from acts or omissions.31

Evidence 14.22 As indicated above, the evidence in support32 must, under Part 8, be served with the claim form. The claimant’s evidence will usually seek to prove both affirmative and negative matters. In practice, on the affirmative side, the evidence should: (1) give full particulars of the instrument imposing the covenant. Ideally that instrument, or a copy, should be exhibited although by section 84(6) it is provided that, ‘An order may be made under the section notwithstanding that any instrument which is alleged to impose the restriction intended to be … dealt with, may not have been produced to the court … and the court … may act on such evidence of that instrument as it may think sufficient.’; (2) identify by reference to a large-scale plan both the burdened land and any land (‘the potentially benefited land’) which may, at the date of the covenant, have been capable of benefiting from the covenant; (3) give full particulars of the subsequent devolution of the ownership of the potentially benefited land. The requisite information may not, in the first instance, be readily available since, of course, it relates to the title of third parties but so far as concerns parties to the proceedings, although automatic discovery is limited to actions with pleadings, a party to a Part 8 claim may apply for a direction for disclosure of documents; (4) provide full particulars of the persons to whom notice of the proceedings was circulated, exhibiting a bundle containing a true copy of the form of circular letter and of the enclosures sent therewith together with photostat copies of all replies and signed forms of consent; (5) where no answer, or an inconclusive answer, is received from addressees of the circular letter, and they are joined as defendants, a witness statement confirming service should be made in respect of any such defendant who does not respond in the proceedings;33 (6) where the relief sought includes a declaration as to the nature and extent of any restriction, give full particulars of the use to which the claimant proposes to put the land.34 14.23 On the negative side, it is necessary, in most cases, for the claimant to prove three negatives, namely, that there was: (a) no building scheme; (b) no annexation of the benefit of the covenant; and 31 See Griffiths v Band (1974) 29 P&CR 243 (Goulding J), where the defendant in question was in fact shown not to be entitled to the benefit. 32 In the form of witness statements and exhibits. 33 See the concern of Foster J on the question of notice of the proceedings in Re Tiltwood, Sussex [1978] Ch 269. 34 In Shropshire County Council v Edwards (1982) 46 P&CR 270, Judge Rubin, sitting as a High Court judge (and exercising his general Chancery jurisdiction) declined, on the basis of insufficiency of evidence, to decide whether ‘one of the less mobile or immobile caravans’ would, if brought onto an intended gipsy site, amount to the erection of a dwelling house within the meaning of a covenant not to erect any dwelling house on the land in question.

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Proceedings for declaration under the LPA 1925, s 84(2) 14.27 (c) no chain of express assignments of the benefit of the covenant connecting the original covenantee with the present owners of the potentially benefited land. 14.24 The contents of the instrument imposing the covenant will usually determine whether there was annexation. The contents of the title deeds of the present owners of the potentially benefited land will disclose whether there are any continuous chains of express assignments.35 The greatest difficulty may often be in negating the creation of a building scheme. The need to do so will, of course, only arise where there is evidence that the original covenantee was the owner of an estate which he was selling off piecemeal. 14.25 In Re Sunnyfield,36 an affidavit37 was sworn on behalf of the Ecclesiastical Commissioners who disposed of an estate of which the subjective land formed part in the second half of the last century, stating that: ‘So far as can be ascertained the said land was never offered for sale by public auction and never laid out as a building estate’. Of this, Maugham J said that it was not conclusive but tended to show that there was no building scheme; but a supporting statement in another affidavit that neither the applicant nor his solicitors had been able to find any suggestion of a building scheme in the ‘extensive inquiries’ which they had made or in the ‘numerous documents’ which they had examined was, together with the statement in the other affidavit, held sufficient to show that there was ‘a very great improbability of there ever having been a building scheme’. 14.26 Similarly, in Re Wembley Park Estate Co Ltd’s Transfer,38 the sole issue upon which the prima facie entitlement to a declaration depended was whether, when a plot of land on the Wembley Park Estate was sold and transferred in 1929 subject to a restrictive covenant, there was a building scheme. This question in turn depended upon whether the common vendor, the Wembley Park Estate Co Ltd, had the requisite intention to create a scheme. The only positive evidence of such an intention was ‘the shadowy point’ (so described by Goff J) consisting of the fact that the ‘considerable number of transfers’ of the plots produced by the 50 defendants who were represented by counsel all contained similar covenants. The negative evidence consisted of enquiries made by the claimant in an endeavour to discover the old papers of the company vendor all of which enquiries had produced negative results. This was held by Goff J to be sufficient to counter the defendants’ argument that further evidence might come to light if the company’s old papers were discovered. 14.27 The need for the claimant to show that positive steps have been taken to ascertain whether a building scheme existed is emphasised by the decision in Re 6, 8, 10 and 12 Elm Avenue, New Milton,39 where Scott J held that it was not

35 In Griffiths v Band (1974) 29 P&CR 243, Goulding J held that since the existence or otherwise of such assignments was a matter which was peculiarly within the knowledge of the present owners of the potentially benefited land, the failure of a defendant to come forward and point out their existence was a circumstance which entitled him on the balance of probabilities to infer that no sufficient assignment had been made in favour of such defendant. 36 [1932] 1 Ch 79. 37 Pre-CPR, affidavits were required rather than witness statements. 38 [1968] Ch 491 (Goff J). 39 [1984] 1 WLR 1398.

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14.28  Freeing the title from unenforceable restrictive covenants sufficient, on an application under section 84(2), to show that, on the balance of probabilities, a party who wished to establish the existence of a building scheme would fail; the evidence must demonstrate the absence of any, or any sufficient,40 signs of a building scheme.

The court’s discretion 14.28 The jurisdiction conferred by section 84(2) is enabling and not mandatory and the court accordingly has a discretion as to its exercise.41 14.29 This has two consequences. First, a case must always be made out for the exercise of the discretion; it is not sufficient that the application has prima facie validity and that no one opposes it.42 14.30 Second, extra-legal arguments having a moral or ethical thrust may be taken into consideration.43 In Re Sunnyfield,44 two respondents who consented to the order sought were nevertheless represented by counsel but it is not a third consequence of the jurisdiction being discretionary that it is necessary for the court to be addressed on behalf of a respondent. In Re Tiltwood, Sussex,45 however, there were 11 defendants of whom five were represented by counsel to oppose the application, the remaining six not appearing or being represented. Before proceeding to hear the application and the opposition thereto on behalf of the five, Foster J required to be satisfied that the other six defendants had been given an adequate chance of appearing before him. For the purpose of satisfying himself on this issue, his Lordship invited counsel for the five to act as amicus curiae and to address him on the question of whether the six had received adequate notice. Care should accordingly be taken to ensure that an affidavit of service is prepared in respect of all defendants who do not lodge an acknowledgment of service and that there is sufficient evidence of notification of the date of the hearing in the case of defendants who acknowledge service but as to whom there is no indication that they will attend the hearing.

Consequential relief where the covenant is registered or protected 14.31

Consequential relief is as follows:

(a) Where the claimant is successful in obtaining a declaration of type (1) at para 14.8 above, namely that the land is no longer affected by the restrictive covenant in question, and the covenant is registered as a land charge under the Land Charges Act 1972 or protected by an entry on the charges register of a registered title, then the position concerning such registration or protection appears to be as follows:

40 See Re Wembley Park Estate Co Ltd’s Transfer [1968] Ch 491. 41 See the judgment of Harman J in Re Freeman-Thomas Indenture [1957] 1 WLR 560. 42 See Re 6, 8, 10 and 12 Elm Avenue, New Milton [1984] 1 WLR 1398. 43 See the judgment of Harman J in Re Freeman-Thomas Indenture, above. 44 [1932] 1 Ch 79. 45 [1978] Ch 269.

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Proceedings for declaration under the LPA 1925, s 84(2) 14.31 ●●

Unregistered Land: Where the covenant is registered as a land charge under the Land Charges Act 1972, then: (i) if it is proved to the satisfaction of the court that the only land burdened by the covenant is the land referred to in the declaration, the court has a discretion to order the vacation of the land charge under section 1(6) of the 1972 Act and since the declaratory order operates in rem under section 84(5) of the Law of Property Act 1925, there would appear to be no reason for the court not making an order for the vacation of the land charge so as completely to clear the title; (ii) if it appears that the covenant originally bound, or may have bound, other land, then since the declaratory order will relate only to the land which is the subject of the proceedings,46 the covenant will still potentially bind the remaining burdened land with the result that there would be no case for the vacation of the covenant from the register. ●● Registered Land: Where the covenant is protected by an entry in the charges register of the registered title, then the court has a discretion under section 65 and Schedule 4, para 2(1)(b) to the Land Registration Act 2002 (in accordance with section 84(2) and (8) of the Law of Property Act 1925) to order the alteration of the charges register by the deletion of the entry relating to the restrictive covenant. Since such deletion would not affect the operation of the covenant on any other land originally burdened by the covenant, then in view of section 84(5) of the Law of Property Act 1925, there would appear to be no reason for the court not exercising its discretion, and so fully implement the declaratory judgment, in every case.47 (b) Where the claimant is successful in obtaining a declaration of type (3), above, to the effect that there are no persons able to enforce the covenant, then this strikes at the root of the covenant itself (and accordingly will only be made where the land in question comprises all the originally burdened land).48 It follows that where such a declaration is made, there would prima facie be no reason for the court not to make an order for the vacation of a land charge registered under the Land Charges Act 1972 or for the alteration of the charges register of the registered title under the Land Registration Act 2002. Where an order for alteration is made then the Land Registrar is bound to give effect to its terms.49 If no order for rectification is made then it appears that the Registrar has a discretion under Schedule 4, para 5 to the Land Registration Act 2002 either to cancel the entry of the restrictive covenant or to refer to the court’s declaratory order and, in the latter case, a copy of the order will be filed at the registry.

46 See Re Jeffkin’s Indentures [1965] 1 WLR 375. 47 But see footnote 21 above. 48 Re Jeffkin’s Indentures [1965] 1 WLR 375. 49 Land Registration Act 2002, Sch 4, para 2(2).

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14.32  Freeing the title from unenforceable restrictive covenants

Costs 14.32 In the case of applications under section 84(2), the discretion as to costs which is vested in the court by section 51 of the Senior Courts Act 1981 is reinforced by section 203(5) of the Law of Property Act 1925 which provides that: ‘The court shall have full power and discretion to make such order as it thinks fit respecting the costs, charges and expenses of all or any of the parties to any application’. 14.33 However: (1) where the application fails, the claimant will usually be ordered to pay the defendants’ costs for the obvious reason that he has brought the case and failed;50 (2) where the application succeeds, the position (including the pre-CPR cases) was reviewed post-CPR by Lightman J in University of East London Higher Education Corporation v Barking & Dagenham LBC (No 2),51 where he said: ‘An immediate reaction to such a judgment is to say that as a practical matter the claimant has succeeded in this litigation so giving rise to an order for costs against the defendant, but that is too simplistic an approach.’ Where the claimant has commenced proceedings under section 84(2) to clear its title of restrictive covenants by seeking declarations of freedom from them which under section 84(5) will be binding on everyone interested (ie effectively be ‘in rem’) the rationale for the ‘rule of practice’ laid down in Re Jeffkins Indentures52 prior to the introduction of the CPR continues to apply, as therefore does the spirit of the rule, namely that: ‘… a [claimant] seeking a declaration that restrictive covenants do not affect his property is expected to pay his own costs. He is also expected to pay the costs of any defendants who enter an appearance down to the point in proceedings at which they have had a full opportunity of considering the matter and deciding whether or not to oppose the application. Any defendant who then decides to continue, and appears unsuccessfully before the judge, does so at his own risk as to his own costs at that stage. Such defendant should not however be ordered to pay the claimant’s costs.’ However, whilst post-CPR this continues as a guideline in ordinary section 84(2) cases, it is subject to three ‘glosses’, namely that: (i) this is only a guideline as to the exercise of the discretionary jurisdiction as to costs and not a rule – it has less rigour than a rule and is more flexible; (ii) there is a need to reflect the emphasis placed by the CPR on voluntary pre-action disclosure which means that post-CPR the defendant may be able to take an informed decision whether to oppose the 50 Pre-CPR, this was often done on an common fund (ie indemnity) basis to the end of the last hearing before the master and on the party and party (ie standard) basis thereafter, as in Re Dolphin’s Conveyance [1970] Ch 654. 51 [2005] Costs LR 287. 52 [1965] 1 WLR 375.

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Proceedings for declaration under the LPA 1925, s 84(2) 14.33 application before the proceedings commenced. If so, the claimant should be obliged to pay the costs of that exercise, but it may be completed before the proceedings commenced, which may affect the award of costs; (iii) whilst pre-CPR, the entitlement of the defendant was to costs on a common fund or solicitor and client basis, and the equivalent basis now is indemnity costs. (3) Where, however, the application is made on the initiative of the claimant and succeeds because of the resolution of a previously unresolved point of law, then the claimant may be ordered to pay the defendants’ costs of the entire proceedings.53 (4) Where the occasion for making the application under section 84(2) is in order to determine whether an objector to an application to the Upper Tribunal under section 84(1) is entitled to the benefit of the covenant, and the application succeeds, where the defendant has taken the initiative in asserting his right to object, apart from which the claimant would not have made an application to the court under section 84(2) the defendant is likely not only to have to bear his own costs but to be ordered to pay the successful claimant’s costs.54

53 As in Re Tiltwood, Sussex [1978] Ch 269. In J Sainsbury plc v Enfield London Borough Council [1989] 2 All ER 817, the claimants might have been expected on the face of it to have been ordered to pay all the costs of the defendant, but the defendant was ordered to pay the claimants’ costs. Lightman J considered this decision in the University of East London Higher Education Corporation case, and said at para 7 of the judgment that it was not clear whether the defendant sought to rely on the rule of practice then pertaining or whether there was some reason which meant it was not applicable. He made clear that it did not negate or qualify the general rule of practice referred to by him. 54 Re Jeff’s Transfer [1965] 1 WLR 972 (Buckley J) and Re Jeffs Transfer (No 2) [1966] 1 WLR 841 (Stamp J). Such applications will now be made pursuant to the provisions of s 84(3A), and rule 10(6) of Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010, SI 2010/2600 (reproduced as Appendix 4 below).

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15 Extinguishment, discharge and modification of restrictive covenants

15.1 A restrictive covenant may come to an end or be varied in each of the following ways: by ceasing to be enforceable at law or in equity;1 by express release; by operation of law; by an order of the county court under section 610 of the Housing Act 1985 (relating to the sub-division of houses); (5) by an order of the Upper Tribunal (Lands Chamber)2 in exercise of its jurisdiction under section 84(1) of the Law of Property Act 1925. (1) (2) (3) (4)

In this chapter, the first four methods will be considered. The fifth will be dealt with in Chapters 16 to 24.

THE COVENANT CEASING TO BE ENFORCEABLE AT LAW OR IN EQUITY 15.2 In the case of restrictive covenants entered into before 1926 where no building scheme was created, this has been by far the most common way in which such covenants have effectively come to an end. In the absence of a building scheme, a pre-1926 restrictive covenant will only remain enforceable if there is a ‘competent claimant’ in the sense discussed at length in Chapters 2 to 7 and a ‘viable defendant’ in the sense discussed in Chapter 9. 15.3 Where there is no building scheme, in general terms,3 once the benefited land has changed hands on sale, a pre-1925 covenant will only remain enforceable against a successor in title of the burdened land if either the benefit of the covenant was annexed to the benefited land by express words in the

1 2 3

Below, para 15.2 et seq. Referred to in this chapter, as throughout the rest of this book, simply as the Upper Tribunal. It replaced (on 1 June 2009) the Lands Tribunal, which until then had the same jurisdiction. For qualifications and refinements, see Chapters 6 and 7.

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15.4  Extinguishment, discharge and modification of restrictive covenants instrument imposing the covenant4 or the present owner can show an unbroken chain of express assignments made simultaneously with each disposal of the benefited land, starting with an express assignment by the original covenantee and ending with an express assignment to the present owner. 15.4 Further, a subsequent purchaser of land burdened by a pre-1926 restrictive covenant will in any case only be bound if at the time of the purchase he had actual or constructive notice of the covenant.5 On the other hand, where at the time the restrictive covenant was entered into a building scheme existed, or where the covenant was entered into after 1925, then it will be much more likely that the covenant will be enforceable since the benefit of building scheme covenants automatically passes to subsequent owners of the benefited land6 and the benefit of other post-1925 covenants will often be automatically annexed to adjoining or neighbouring land of the covenantee by virtue of section 78(1) of the Law of Property Act 1925 as interpreted by the Court of Appeal in Federated Homes Ltd v Mill Lodge Properties Ltd.7 15.5 In the case of post-1925 restrictive covenants affecting unregistered land, however, it may none the less be found that the need for registration under the Land Charges Acts of 1925 or 1972 has been overlooked with the result that following a sale of a legal estate in the burdened land the covenant will have become unenforceable.8 Where in proceedings to enforce a restrictive covenant the court refuses to grant an injunction, the significance of this on the continued existence of the covenant depends upon the circumstances. If the ground of the refusal is the lack of any title in the claimant to enforce the covenant and the claimant was the only potential ‘competent claimant’,9 then, although the decision operates only in personam and not in rem, it nevertheless effectively disposes of any possible right to enforce the covenant.

Clearing the title of unenforceable restrictive covenants 15.6 Whilst the owner of land to which an unenforceable restrictive covenant relates has nothing to fear except the threat of proceedings being taken which cannot succeed, nevertheless the covenant remains an apparent blot on the title and, as a practical matter, it may be difficult to persuade a future purchaser to accept such a state of affairs. In such a case, the technical blot may be alleviated by obtaining a suitable policy of indemnity insurance, or be totally eliminated by obtaining a declaratory order

4 5 6 7 8

9

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See Chapter 6. As to which, see Chapter 9. See Chapter 8. [1980] 1 WLR 594. See para 6.31 et seq above. See s 13(2) of the Land Charges Act 1925 (which operated on conveyances of land executed before 29 January 1973) and s 4(6) of the Land Charges Act 1972 (which applies to conveyances executed on or after that date): ‘… a land charge of Class D created or entered into on or after 1st January 1926 shall be void as against a purchaser for money or money’s worth … of a legal estate in the land charged with it, unless the land charge is registered in the appropriate register before the completion of the purchase’. See, further, Chapter 9. Using this expression in the sense referred to in Chapter 2.

Express release 15.10 of the court under section 84(2) of the Law of Property Act 1925 together with any appropriate ancillary relief under the Land Charges Act 1972 or the Land Registration Act 2002. Applications under section 84(2) of the Law of Property Act 1925 are fully covered in Chapter 14 and call for no further comment here. 15.7 Where in proceedings to enforce a restrictive covenant an injunction is refused but no application has been made for vacating the registration of the covenant it would seem that if the claimant was the only potential ‘competent claimant’ and the ground of the refusal is the lack of any title in the claimant to enforce the covenant, where the successful defendant’s land is registered land, it should be possible to persuade the Registrar to exercise his discretion under Schedule 4, para 5 to the Land Registration Act 2002 to cancel the entry relating to the restrictive covenant. 15.8 Whilst, in theory, the same should also hold good on an application to the registrar of general land charges to vacate the entry of a restrictive covenant as a land charge under the Land Charges Act 1972, the essentially administrative character of the function of the registrar in respect of general land charges makes it less likely that he will consider that he may properly vacate the registration of the land charge. Clearly, even in the case of registered land, the best course would be to ask the court in the action for an order to remove the registration of the covenant from the register.

EXPRESS RELEASE The person or persons having power to release 15.9 Unless an express power of release is, by the terms of the instrument creating the restrictive covenant, declared to be vested in a particular individual10 (in which case a release from that individual is all that is required) the title to release the covenant will be vested in the person or persons entitled to the benefit of the covenant.11 In the first instance, it will thus be necessary to ascertain the extent of the land originally benefited by the covenant and then to identify the present owners of such land and any persons claiming derivative interests from such owners. If all such persons join in the release then it will necessarily be completely effective.12 15.10 In the case of the benefited land the subject of a derivative interest such as a mortgage or lease, if the lessee or mortgagee does not join in the release, any right they (or those claiming through or under them) may have to enforce the covenant will be unaffected by the release. But this shortcoming will be

10 As in Mayner v Payne [1914] 2 Ch 555. See further, para 11.83 et seq above. 11 As to registered land, see s 40(2) of the Land Registration Act 1925. 12 It does not follow, however, that all such persons are entitled to the benefit of the covenant; whether they are so entitled or not depends upon whether they can establish a claim to be ‘competent claimants’ in accordance with the rules discussed in Chapters 2 to 8.

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15.11  Extinguishment, discharge and modification of restrictive covenants overcome by the doctrine of feeding the estoppel if and when the lease or the mortgage are extinguished unless simultaneously with such extinguishment a new lease or mortgage is created. In the latter case, to the extent of any overlap of interest between the new and the old lease or mortgage (but not in respect of any extended interest), the rights of enforcement will be preserved.13

Fiduciary owners 15.11 A tenant for life under the Settled Land Act 1925 may, with the consent in writing of the trustees of the settlement and either with or without consideration, compromise any claim relating to restrictive covenants, or by deed or writing release any covenant, agreement or restriction imposed on other land for the benefit of the settled land.14 In the case of land held upon trust for sale, the trustees for sale have similar powers,15 and personal representatives are in the same position in dealing with the estate of the deceased.16

Minors and persons subject to a legal disability 15.12 The position of such persons in the context of their ability to consent to the discharge or modification of a restrictive covenant under paragraph (b) of section 84(1) of the Law of Property Act 1925 is considered in Chapter 21 and similar considerations apply in the present context.

Form of release 15.13 Since the benefit of a restrictive covenant is an equitable interest in the burdened land,17 it can only be released in whole or in part ‘by writing’ signed by the releasor or by his agent who is duly authorised in writing.18 Ideally the release should be effected by deed,19 since this will avoid any question of the need for valuable consideration20 but if the covenant is enforceable only in equity21 it is considered that a release in writing but which was not a deed would be effective even in the absence of valuable consideration since it would take effect as a disposal under section 53(1)(a) of the Law of Property Act 1925 and not as a contract.

13 See Equity and Law Home Loans Ltd v Prestidge [1992] 1 WLR 137, CA; Walthamstow Building Society v Davies (1989) 60 P&CR 99, CA. The doctrine of feeding the estoppel applies to registered land: First National Bank plc v Thompson [1996] 1 All ER 140, CA. 14 Settled Land Act 1925, s 58(1) and (2). See also, s 59(2) of that Act relating to the giving of licences, consents and approvals required by a covenant. 15 Law of Property Act 1925, s 28(1). 16 Administration of Estates Act 1925, s 39(1). 17 See Davis v Leicester Corpn [1894] 2 Ch 208; Re Nisbet and Potts’ Contract [1905] 1 Ch 391, at p 398. 18 Law of Property Act 1925, s 53(1)(a). For an exception, see s 84(1)(b) of the same Act. This exception does not apply to proceedings under s 84(2) of that Act: see Griffiths v Band (1974) 29 P&CR 243, 245–246. 19 Executed in accordance with the requirements of the Law of Property (Miscellaneous Provisions) Act 1989, s 1(2) and (3). 20 See West v Blakeway (1841) 2 Man & G 729; Keates v Lyon (1869) 4 Ch App 218, at p 226. 21 As to which, see above, para 13.48.

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Extinguishment by operation of law 15.17 A release may either extend to the covenant at large or (more usually) be limited to permitting a specified departure from the terms of the covenant. In the latter case, the covenant will continue in operation except in respect of the matters specified. A distinction must be made, however, between a release (in whole or in part) and a variation of a covenant. It is considered that assuming the covenant itself was imposed by deed, then any variation would itself require to be by deed.22 15.14 If the covenant as modified is specifically re-affirmed by words of covenant between the parties to the release then this will create fresh personal obligations and will give rise to the question whether there is a novation or a duplication, either of which may need to be protected by the appropriate entry under the Land Charges Act 1972 or on the registered title.

Covenants registered as land charges under the Land Charges Act 1972 or protected on the charges register of a registered title 15.15 In the case of a restrictive covenant affecting unregistered land and registered as a land charge under the Land Charges Act 1972, whilst under Rules made under that Act the registration of a land charge may be cancelled without an order of the court or with the consent of the person entitled thereto, it will usually be very difficult to persuade the registrar, in the absence of an order of the court to that effect that a release does bind the interests of all persons who may be entitled to enforce the covenant so as to justify his cancelling the registration. 15.16 The same applies in the case of a covenant which is protected by an entry on the charges register of a registered title, but in this case, if the release contains an application by the parties thereto to enter a note thereof on the register, the Registrar will act accordingly and enter a note stating that, by the release, the covenant referred to was expressed to be released to the extent referred to therein.23 In the case of an agreed variation, the entry in the register must give details of the variation.24

EXTINGUISHMENT BY OPERATION OF LAW 15.17 (1) (2) (3) (4)

Four types of extinguishment by operation of law may be identified:

by unity of seisin; by intervening illegality; by intervening impossibility;25 by the provisions of a statute.

22 See Kaye v Waghorn (1809) 1 Taunt 428, although in equity a deed may be discharged by writing: Webb v Hewitt (1857) 3 Kay & J 438. See, however, as to the effect of a side letter relating to lease covenants, System Floors Ltd v Ruralpride Ltd [1995] 1 EGLR 48, CA. 23 Under the Land Registration Rules 2002, r 87. 24 Land Registration Rules 2002, r 84(4). 25 There is no fourth type consisting of the land being freed from former constraints under the planning laws: see R v Tunbridge Wells Borough Council (1989) 59 P&CR 315 (Popplewell J). The compulsory acquisition of the burdened land does not extinguish the covenant: see Chapter 10.

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15.18  Extinguishment, discharge and modification of restrictive covenants

Extinguishment by unity of seisin 15.18 In considering the effect on a restrictive covenant of land which is benefited by the covenant and land which is burdened by the covenant vesting in the same person, it is necessary to deal with four main situations.

Case 1 15.19 Where the whole of the benefited land and the whole of the burdened land become vested in one person for an estate in fee simple free from any derivative estates, interests or rights capable of enjoying the benefit or being subject to the burden of the covenant.26 In this clear-cut situation, Lord Cross said in Texaco Antilles Ltd v Kernochan:27 ‘It is no doubt true that if the restrictions in question exist simply for the mutual benefit of two adjoining properties and both those properties are bought by one man the restrictions will automatically come to an end and will not revive on a subsequent severance unless the common owner then recreates them.’

Case 2 15.20 Where the whole of the benefited land and part of the burdened land become vested in one person in fee simple free from any such derivative estates, interests and rights as are mentioned above. This situation arose for consideration in Re Tiltwood, Sussex.28 There, on an application by the claimant under section 84(2) of the Law of Property Act 1925 for a declaration that his land was no longer subject to a covenant imposed by a conveyance on sale executed in 1951 (‘the 1951 Conveyance’) the sequence of events was as follows: By the 1951 conveyance Mr Scaramanga, the then owner of the Tiltwood estate which included a mansion house and grounds and certain agricultural land, conveyed part of the agricultural land (‘the burdened land’) to Mr Longinotto taking from him a covenant (‘the restrictive covenant’) to use the land for agricultural purposes only and prohibiting the erection thereon of any building, structure or erection whatsoever. It was found as a fact that

26 27 28

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As to the position in the case of such derivative estates, interests or rights, see above, paras 9.7 and 9.36. [1973] AC 609, PC, at p 626Β. [1978] Ch 269. In fact, as will be seen from the statement of facts given in the text, the benefited land originally comprised other land but at the time when the unity of seisin took place, the only benefited land was that which became vested in the common owner. In Cryer v Scott Bros (Sunbury) Ltd (1986) 55 P&CR 183, the whole of the originally benefited land became vested, on 14 October 1958, in the owner of part of the burdened land and Slade LJ observed, at p 188: ‘As from 14 October 1958 the covenants were thus extinguished by unity of seisin in relation to any part of the originally transferred [burdened] land which the defendants had not sold by that date’. The case concerned the enforceability of the covenants as against the owner of a part of the originally burdened land which had been sold prior to 14 October 1958 and which, therefore, fell outside the effects of the unity of seisin.

Extinguishment by operation of law 15.21 the covenant was taken for the benefit of the mansion house and grounds (‘the benefited land’). In February 1952, Mr Scaramanga conveyed the benefited land to Mrs Spence together with the benefit of the restrictive covenant. In July 1952, Mrs Spence conveyed part of the benefited land to a purchaser but the conveyance contained no express assignment of the benefit of the restrictive covenant. In August 1952 Mr Longinotto conveyed part of the burdened land to Mrs Spence. Up to this point, Foster J’s conclusion was that since there had been no express assignment of the benefit of the covenant in the conveyance of July 1952,29 Mrs Spence was then the owner of the whole of the land which still benefited from the covenant and the owner of part of the burdened land. There was accordingly no complete unity of seisin and the covenant was still alive in the sense that Mrs Spence could at that stage still enforce the covenant against Mr Longinotto in respect of the remainder of the burdened land. Subsequently, Mrs Spence disposed of three different parts of the benefited land with, in each case, an express assignment of the benefit of the restrictive covenant, and those parts were now separately owned by the defendants. In December 1952 Mrs Spence conveyed (inter alia) the part of the burdened land which she had purchased from Mr Longinotto to the claimant ‘subject to … [the restrictive covenant] so far as the same relate to or affect the property hereby conveyed and are still subsisting and capable of taking effect’. The claimant claimed that by reason of the earlier unity of seisin of this land with the benefited land the restrictive covenant was, as to this land, extinguished and did not revive on the subsequent sales of the land now owned by the defendants. 15.21 The question for decision was stated by Foster J in the following terms:30 ‘The question of law is whether in those circumstances the restrictive covenants on the burdened land are forever extinguished unless a fresh express covenant is taken from the purchaser of the part of the benefited land or whether the restrictive covenants are thereby suspended and are revived when part of the benefited land is sold with an express assignment of the covenant.’ Foster J, after quoting the dictum of Lord Cross in Texaco Antilles Ltd v Kernochan cited above, held that: ‘where the fee simple of the benefited and the burdened land is vested in one person, the restrictive covenants are extinguished unless the common owner recreates them. In this case the common owner did not recreate them and they are therefore extinguished.’ 29 There were no words of annexation in the 1951 conveyance and it was not argued that annexation may have been effected by the operation of s 78(1) of the Law of Property Act 1925. See further, as to this last point, para 6.27 et seq above. 30 Re Tiltwood, Sussex [1978] Ch 269, at p 278D.

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15.22  Extinguishment, discharge and modification of restrictive covenants 15.22

From this decision, the following conclusions may be drawn:

(1) There will be partial extinguishment of the benefit of a covenant where part only of the burdened land is vested in the owner of the benefited land (the extinguishment of the benefit being confined to that part).31 (2) Where after unity of seisin has taken place the common owner disposes of the benefited land (which is still benefited in respect of the remainder of the burdened land) with an express assignment of the benefit of the covenant, and retains the former burdened land, the making of the express assignment will not be sufficient to ‘recreate’ the covenant so as to resurrect its enforceability against the retained land. In such a case, the express assignment of the benefit is consistent with an intention to pass the benefit in relation to the remainder of the burdened land.

The decision leaves open two questions: (a) Whether, in a situation falling within Case 1 above (ie where the whole of the burdened land became vested in the common owner), a disposal of the benefited land with an express assignment of the benefit of the covenant would, where at that time the whole (or some part) of the former burdened land is retained, be construed as sufficient to recreate the covenant in relation to the retained land? In such a case, the express assignment could not be explained on the basis that it would have effect in relation to other and which then continued to be burdened, since no such land exists, and the purported express assignment might therefore be construed as providing an indication of an intention to resurrect the enforceability of the covenant as against the retained land. The alternative would be to reject the express assignment as being of no effect, an alternative which is inconsistent with the rule of construction that the court will, so far as practicable, seek to give a meaning to all parts of a written instrument.32 However, the court will not, in order to save words from being otiose, read a meaning into them which they do not naturally bear, and the fact is that up to the point of the disposal of the benefited land, there was no live covenant in respect of which there could be any effective assignment of the (non-existent) benefit. In the words of Lord Cross in Texaco Antilles Ltd v Kernochan,33 ‘… it is not at all unusual for conveyances to contain provisions which are unnecessary and it would be wrong to construe these provisions in an unnatural sense because read in their natural sense they are both unnecessary and repetitious.’

31 In Cryer v Scott Bros (Sunbury) Ltd (1986) 55 P&CR 183, the Court of Appeal held that the owner of the benefited land (who also owned part of the burdened land) could enforce the covenants against an owner of part of the remainder of the burdened land. Moreover, this was so even though the owners of the benefited land were the original covenantors, Scott Bros (Sunbury) Ltd being the original covenantors who subsequently purchased the benefited land and who successfully claimed to be entitled to enforce their own covenants against an earlier purchaser from themselves of part of the burdened land. 32 See Re Strand Music Hall Co Ltd (1865) 35 Beav 153, per Romilly MR; affd 3 De GJ& Sm 147. 33 [1973] AC 609, PC, at p 626H.

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Extinguishment by operation of law 15.24

It is considered that the remarks of Foster J above would generally apply to this situation therefore; (b) Whether, if the former burdened land had been conveyed first expressly subject to the restrictive covenant, that would have been enough to revive its enforceability as against the purchaser? It is considered that the answer would still be in the negative for two reasons. First, in the context of other situations where an equitable interest had once bound land but had ceased to do so when the land was sold expressly subject to the defunct interest, it has been held that such express provision is not sufficient to resuscitate the interest.34 Second, it would be more than likely that any semblance of an intention  to revive the restrictive covenant which the words of subjection to the covenant might otherwise create would be negatived by the customary additional words ‘so far as the same is still subsisting and capable of being enforced’.

Case 3 15.23 Where part of the benefited land and the whole or part of the burdened land become vested in one person in fee simple free from any such derivative estates, interests and rights as are mentioned in Case 1 above. There is no reported case which considers the effect of this situation but since, in equity, the benefit of a restrictive covenant can be (and must necessarily, in the instant case, have been) severed,35 it would seem to follow that such severed part should also be capable of being extinguished separately from the remainder. On this basis, the covenant would be extinguished to the extent to which there was coalescence of ownership of the benefited and burdened land and would not revive on subsequent severance unless expressly recreated.

Case 4 15.24 Where, in any of the situations covered by the previous three cases, the covenants were originally entered into under a building scheme. This was the situation which fell to be considered by the Privy Council in Texaco Antilles Ltd v Kernochan.36 The Privy Council held that where there is unity of seisin in respect of different plots forming part of the building scheme land, then whether such unity arose at the inception of the scheme (by an original purchaser purchasing two or

34 See Hollington Bros Ltd v Rhodes [1951] 2 All ER 578. But see also, Lyus v Prowsa Developments Ltd [1982] 1 WLR 1044. 35 Above, para 7.3. 36 [1973] AC 609.

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15.25  Extinguishment, discharge and modification of restrictive covenants more plots37) or subsequently by two plots being acquired by the same person, on a subsequent severance of the plots the building scheme obligations will become or (as the case may be) again become enforceable as between the owners of the severed plots unless there are special circumstances. 15.25 Three sets of such special circumstances were referred to by Lord Cross on behalf of the Privy Council): (1) where all the land which was subject to the building scheme comes into the same ownership;38 (2) where on the subsequent severance, the parties to the transactions which put an end to the unity of seisin provide, either expressly or by necessary implication, that the building scheme restrictions shall no longer apply. Such necessary implication arises where, on the subsequent severance of the commonly owned plots, a fresh set of covenants is taken from the purchasers. Though the original covenants will no longer be enforceable as between the parties to this transaction, holders of other plots within the building scheme could still enforce them, however. In Knight v Simmonds,39 two joint purchasers of several lots of building scheme land covenanted not to carry on any trade or business on the lots. Shortly afterwards the purchasers resold the lots to different purchasers who entered into a deed of mutual covenants between themselves providing that no offensive trade should be carried on. One of the claimants (Williams) and the defendant were the owners of different parts of the land so resold and the defendant erected a large laundry on his land with the intention of carrying on the business of a laundryman. The other claimant (Knight) was the owner of a lot which the joint purchasers had not purchased and resold. It was held by Romer J that the original building scheme covenant did not apply as between the purchasers of the resold land since they had, as between themselves, replaced the building scheme covenants with their own sub-scheme covenants and that, as the business of a laundryman was not an offensive trade, Williams had no cause of action (but Knight was held to be entitled to enforce the building scheme covenant against carrying on any trade or business). To the same effect is the decision of Parker J in Elliston v Reacher40 so far as concerns the claimants other than Elliston. (3) Where the surrounding circumstances at the date of the severance transaction indicate that the restrictions are not intended to apply as between the parties thereto. Lord Cross gave the following example of such circumstances:41 ‘Suppose, for example, that the owner of two adjoining houses subject to a scheme of development which forbade user for professional purposes started to use one of the houses for professional purposes and shortly afterwards sold it to someone who to his knowledge proposed to continue such user. In such circumstances the purchaser would run the

37 38 39 40 41

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As in Brunner v Greenslade [1971] Ch 993, considered above at para 8.15 et seq. Per Lord Cross at p 626C. [1896] 1 Ch 653, per Romer J at pp 660–661 (affd [1896] 2 Ch 294). [1908] 2 Ch 374, at pp 393–395. [1973] AC 609, at p 625D. For example, see Re Austin’s Application (1980) 42 P&CR 102, LT.

Extinguishment by operation of law 15.27 risk of actions by other owners but any claim by the vendor as owner of the adjoining house to enforce the covenant would be a derogation from his grant even though the conveyance contained no express release of the purchaser from the restrictions in the scheme so far as concerned the vendor as owner of the adjoining house.’ In the circumstances of such a case, however, it would seem that the building scheme restrictions to the purchaser ought not to apply only in respect of the one restriction concerned.42 Further, so far as the vendor was concerned, the restrictions on him would, as between himself and the purchaser, still be enforceable in full.

Other Interests 15.25A The general principle in relation to unity of seisin is subject to the qualification that there must be unity not merely of ownership but also of possession. Extinguishment will not occur if there remains a person entitled to the benefit or subject to the burden of the restrictive covenant. Accordingly, where the benefited and burdened tenements come into the same ownership but one of the tenements is occupied by a third party, the covenant is not likely to be extinguished by unity of seisin because the third party occupier can enforce the covenant or have it enforced against him as the case may be: see University of East London Higher Education Corporation v Barking and Dagenham LBC [2005] Ch 354. Similarly where one owner holds both the benefited and burdened tenement but does so on different trusts or is a local authority and holds one of the tenements in one capacity and the other in another capacity: ibid.

Extinguishment by intervening illegality 15.26 Where the use of land for the only purpose for which it is permitted to be used by a restrictive covenant becomes unlawful, then although it would still be possible to comply with the terms of the covenant by putting it to no use at all, there is old authority to the effect that the land becomes altogether free from the covenant by compulsion of law.43 15.27 It would not seem that constraints upon the use of land imposed by, or arising out of powers exercised under, the Town and Country Planning Act 1990 ought to affect the position if the covenantor was aware those

42 The principle involved in Lord Cross’ illustration would appear to be based on the principle of non-derogation from grant. This was also the basis upon which Simonds J in Lawrence v South County Freeholds Ltd [1939] Ch 656 explained the decision in King v Dickeson (1889) 40 ChD 596. In the latter case it was held that the owner of part of a building scheme lot who had mortgaged the other part to a mortgagee who foreclosed and sold that part to a predecessor in title of the defendant could not enforce any of the building scheme covenants against the defendant where he had not created as against the mortgagee (and therefore anyone deriving title from him) any restriction in his favour, though other owners of building scheme lots could enforce the covenants still against all owners, or mortgagees, of the land. See further in relation to this case the observations of Megarry J in Brunner v Greenslade [1971] Ch 993, at p 1007A. 43 See Doe d Lord Anglesea v Rugeley (Churchwardens) (1844) 6 QB 107 (order of the poor law commissioners making it unlawful to use the premises for the maintenance of the poor as required by a covenant in a lease for 1000 years).

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15.28  Extinguishment, discharge and modification of restrictive covenants constraints were there, or might be there, at the time he entered into the covenant so that the covenantor took on himself the risk that the land could not be freed from them and used for the permitted purpose when he entered into it. Generally speaking, it would be up to the purchaser of the land to satisfy himself that the land could be lawfully used for the permitted purpose.44 Where, however, the law unexpectedly changes so that the permitted use becomes impossible, the position would appear to be covered by the authority just referred to.

Extinguishment by intervening impossibility 15.28 Where land which is burdened by a restrictive covenant is acquired by a statutory body for statutory purposes and the carrying out of those purposes is inconsistent with the terms of the covenant, then although the covenant is not thereby extinguished, no action either for an injunction or damages can be brought by the person entitled to the benefit of the covenant against the statutory body.45 15.29 The statutory umbrella which confers freedom from such an action on the statutory body provides no protection for the original covenantor, though, and if, according to the terms of the covenant, the original covenantor undertakes responsibility for the acts of himself and his successors,46 then he would, unless relieved, be liable for the actions of the statutory body which neither he nor anyone else could restrain. However, in Baily v De Crespigny,47 the view expressed by the court was that in such a case the law would relieve the covenantor from personal liability on the principle lex non cogit ad impossibilia (‘the law does not compel one to do the impossible’), although on the facts it was held that there was no breach on his part.

Extinguishment by statute 15.30 Section 12 of the Allotments Act 1950 contains the now anachronistic, but still extant, provision that: ‘(1) Notwithstanding any provision to the contrary in any lease of tenancy or in any covenant, contract or undertaking relating to the use to be made of any land, it shall be lawful for the occupier of any land to keep, otherwise than by way of trade or business, hens or rabbits in any place on the land and to erect or place and maintain such buildings or structures on the land as reasonably necessary for that purpose: Provided that nothing in this subsection shall authorise any hens or rabbits to be kept in such a place or in such a manner as to be prejudicial to health or a nuisance or affect the operation of any enactment.’

44

45 46 47

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A case for the discharge or modification of the covenant by the Upper Tribunal on the grounds specified in s 84(1)(a) or (aa) of the Law of Property Act 1925 could be considered, however: see, eg Re Hickman & Sons Ltd’s Application (1957) 7 P&CR 33 where a change to the development plan favoured light industry in an area and a covenant limiting use of land within it to residential use only was discharged by the Lands Tribunal as obsolete. See Chapter 10. As to which see Chapter 11. (1869) LR 4 QB 180.

Variation by order of county court under HA 1985, s 610 15.33 As will be appreciated, this unusual provision was introduced during the food shortages in the aftermath of the Second World War, but, as stated, it remains extant.

VARIATION BY ORDER OF THE COUNTY COURT UNDER SECTION 610 OF THE HOUSING ACT 1985 The power 15.31

Section 610 of the Housing Act 1985, as amended, provides as follows:

‘(1) The local housing authority or a person interested in any premises may apply to the county court where— (a) owing to changes in the character of the neighbourhood in which the premises are situated, they cannot readily be let as a single dwelling-house but could readily be let for occupation if converted into two or more dwelling-houses, or (b) planning permission has been granted under Part III of the Town and Country Planning Act 1990 (general planning control) for the use of the premises as converted into two or more separate dwelling-houses instead of as a single dwelling-house, and the conversion is prohibited or restricted by the provisions of the lease of the premises or by a restrictive covenant affecting the premises, or otherwise. (2) The court may, after giving any person interested an opportunity of being heard, vary the terms of the lease or other instrument imposing the prohibition or restriction, subject to such conditions and upon such terms as the court may think just.’ 15.32 The section derives from section 27 of the Housing, Town Planning, &c Act 1919, but the power was originally exercisable only if what is now section 610(1)(a) was satisfied. That was carried forward into section 163 of the Housing Act 1936. The court’s power was then enlarged, to include what is now section 610(1)(b), by section 11 of the Housing Act 1949. The provisions were subsequently brought together without any change of substance in section 165 of the Housing Act 1957. That was then carried forward into what is now section 610 of the 1985 Act. Subsections (1)(a) and 1(b) provide alternative bases for an application to the court.

Matters to be taken into account 15.33 In Sarum Trust Ltd v Duke of Westminster,48 section 163 of the 1936 Act and section 11 of the 1949 Act were considered by the Court of Appeal. There was an application by lessees for variation of the terms of their lease so as to permit further sub-division of the premises. It was submitted by them that, where planning permission had been granted, the court should vary the terms 48

[1953] CPL 86.

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15.34  Extinguishment, discharge and modification of restrictive covenants of the lease and that its discretion was limited to how, and on what terms and conditions the planning permission should be carried out. The Court of Appeal held that ‘may’ was not to be read as ‘shall’. It found that the judge below had, on this basis, been entitled to come to the conclusion that the application should be refused on the grounds that the landlord’s interests elsewhere might be affected if the application were granted, by leading to further applications of a similar kind; that the landlord’s objection to an increase of density was reasonable; and that there would be no advantage to the public in making the variation, and accordingly dismissed the appeal. 15.34 Consistently with the decision in Sarum, in Lawntown Ltd v Camenzuli49 it was held by the Court of Appeal that although triggered by a grant of planning permission, the court’s task on an application under section 610(1)(b) is separate from the planning process and requires the court to undertake an independent exercise of judgment. Although the underlying policy of section 610(1)(b) appears to be to facilitate the more intensive use of large dwelling houses, it was held the section does not create any presumption in favour of the variation of a restrictive covenant where planning permission has been granted. Rather, the court has to take account of all relevant factors (though including the fact the local planning authority had found that the development met the conditions for the grant of planning permission50) and carry out a balancing exercise, having regard both to the interests sought to be protected by the restrictive covenant and the extent to which they would be harmed by the proposed variation, and to the interests of those seeking the variation, and the advantages to both public and private interests which would accrue from it, taking into account as part of this policy considerations favouring the more intensive use of existing dwelling houses. Consideration of the public interest was said to include taking into account an urgent demand for more housing in London.51 15.35 It was further held that the court should not leave matters out of account or give them no weight merely because they had already been considered by the planning authority in granting planning permission. On the facts, however, the Court of Appeal (exercising afresh the discretion of the county court judge who had gone wrong in relation to this) decided that having regard to all relevant matters, the balance there came down in favour of granting the requested variation of the restrictive covenants.

Compensation 15.36 The power under section 610 of the Housing Act 1985 to vary the terms of the covenant ‘subject to such conditions and upon such terms as the court may think just’ enables the court to make provision for financial compensation in a suitable case: see para 58 of Lawntown.52

49 50 51 52

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[2008] 1 WLR 2656. Ibid, para 54. Ibid, para 55. Ibid. Although there was no evidence of any such loss there, so on the facts compensation was not ordered. The court said that if compensation was to be sought, it is incumbent on the party seeking it to make out its case in relation to it before the judge.

Variation by order of county court under HA 1985, s 610 15.40

Differences in use between the section and the Upper Tribunal’s general power in s 84(1) of the Law of Property Act 1925 15.37 Section 610 of the Housing Act 1985 is clearly distinct from the power of the Upper Tribunal to order the discharge or modification of a restrictive covenant under section 84(1) of the Law of Property Act 1925. That gives the Upper Tribunal53 such power ‘without prejudice to any concurrent jurisdiction of the court’.54 An application could therefore be made to the Tribunal for discharge or variation of a relevant covenant on the same section 84(1) grounds as in any other case, or an application could be made to the county court under section 610 of the 1985 Act on the specific grounds there set out. Tribunal decisions on changes in the character of the neighbourhood in the context of such a restriction for the purposes of section 84(1)(a) of the Law of Property Act 1925 would seem relevant to the ground set out in section 610(1)(a) and would be considered by the court to be strongly persuasive. 15.38 The Law Commission in its Report on ‘Codification of the Law of Landlord and Tenant Covenants Restricting Dispositions, Alterations and Change of User’ (1985: Law Com No 141) considered whether section 610 of the 1985 Act should be merged with section 84 of the 1925 Act, but concluded that it should not, as section 610 gave a clear remedy for a specific problem, and ‘the grounds for relief under section 165 are (understandably, in view of its purpose) less stringent than those imposed by section 84’. The grounds under section 84, contained in section 84(1), are set out in Chapter  18 below (and considered in succeeding chapters). By contrast, section  610 of the 1985 Act is a simple and specific provision for varying covenants preventing conversions of houses into flats. 15.39 Further, the county court’s jurisdiction under section 610 of the 1985 Act is wider than that given to the Upper Tribunal under section 84(1) of the 1925 Act in that it applies to all leases, as well as freehold covenants, unlike section 84(1) which, by section 84(12), applies only to leases of more than 40 years of which at least 25 years have expired. 15.40 In Lawntown55, the Court of Appeal quoted from the first edition of this book which said that the provisions of section 610 appear especially useful and straightforward in the circumstances to which they apply and expressed surprise that they were not more frequently used. The Court said the more limited use made of them may be because they are so little used there may be greater uncertainty as to the likely outcome of an application to the court under them compared to that of an application to the Upper Tribunal under section 84(1) of the 1925 Act. Practitioners may also be wary of the fact that the county court has little experience of dealing with such cases.

53 54 55

Previously the Lands Tribunal. See Chapter 16. [2008] 1 WLR 2656, at para 12.

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15.41  Extinguishment, discharge and modification of restrictive covenants A number of county court circuit judges also sit as members of the Upper Tribunal, however, and could bring the same expertise to bear.56 It is to be hoped, and might reasonably be expected, that the county court administration, if notified of the nature of the case, or the district judge at any initial hearing, would ensure the matter is dealt with by any such a judge who sits at the centre involved, although this could lead to delay. Even if impractical, the provisions of section 610 are relatively straightforward and it is suggested the principles laid down in Lawntown would be readily applied by any circuit judge.57 15.41 Further, following Lawntown, the position in relation to section 610 is now clearer than previously58, in particular, in relation to the potential for an award of compensation. It would seem appropriate for the court to apply similar principles to any award of compensation to those applied by the Upper Tribunal on an application under section 84(1). However, in the absence of cases dealing with compensation, some uncertainty in relation to that aspect may be considered to remain. 15.42 Where the court’s decision is sought in circumstances where there is no substantial dispute of fact and it is simply a matter of the exercise of judgment on the facts, the application could be brought by a Part 8 claim (pursuant to CPR rule 8.1(2)(a)), which offers a relatively speedy procedure.

56 Central London County Court has, for example, considerable expertise in property matters, and at least one judge who is also assigned to the Upper Tribunal (Lands Chamber) is currently based there. 57 And as set out above, in relation to the s 610(1)(a) ground, the cases dealing with that situation decided by the Upper Tribunal under s 84(1)(a) (and previously, the Lands Tribunal) would be likely to be strongly persuasive to the court, though it is appreciated the background knowledge from such cases would not necessarily be known to a county court judge who did not sit there. 58 See para 15.36 above.

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16 The modification and discharge of restrictive covenants and agreements by the Upper Tribunal (Lands Chamber) pursuant to section 84(1) of the Law of Property Act 1925

INTRODUCTION 16.1 Prior to 1926, if the technical requirements for the enforceability of a restrictive covenant were met,1 then regardless of whether the enforcement of the covenant would, having regard to changed circumstances, serve any useful purpose, its enforcement according to its terms was tempered only by the court’s inherent jurisdiction to treat those circumstances as amounting to an express or implied release of the covenant and the court’s discretion to refuse the remedy of injunction – either with or without an award of damages in lieu.2 However, by section 84(1) of the Law of Property Act 1925 a general jurisdiction to discharge or modify restrictive covenants was conferred on specified members of the body of Official Arbitrators appointed for the purposes of the Acquisition of Land (Assessment of Compensation) Act 1919.3 On 1 January 1950 that jurisdiction was transferred to the Lands Tribunal set up by the Lands Tribunal Act 1949. Section 84(1) was subsequently modified by amendments made by the Law of Property Act 19694 (which added subsections (1A) to (1C)). 16.2 The jurisdiction under section 84(1) was transferred to the Upper Tribunal (Lands Chamber) with effect from 1 June 2009, on which date it replaced the Lands Tribunal. The decisions made by the former Lands Tribunal are still taken into account to the same extent as previously, and to the same

1 2

3 4

As to which, see Chapters 1–9. See Chapter 13. Prior to 1926 the county court also had statutory power to modify specific types of restriction under s 8 of the Celluloid and Cinematograph Film Act 1922 and s 27 of the Housing, Town etc Planning Act 1919. There was also power in s 27 of the Housing, Town Planning &c Act 1919 for the county court to in certain circumstances vary a covenant prohibiting the conversion of a house into flats. The grounds for the exercise of the power were subsequently widened and are still extant, being now contained in s 610 of the Housing Act 1985, in relation to which, see para 15.31 et seq above. See s 84(10) of the Law of Property Act 1925 as originally enacted. Section 28(1) and Sch 3 to the 1969 Act.

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16.3  Modification and discharge pursuant to LPA 1925, s 84(1) extent as those that have made by the Upper Tribunal since then, though of course decisions of the Upper Tribunal are the most recent. For simplicity, the Upper Tribunal (Lands Chamber) will be referred to as the ‘Upper Tribunal’ (as it is throughout this book), and where ‘Tribunal’ appears, it is used to mean the Upper Tribunal or former Lands Tribunal as the case may be.

THE PROVISIONS OF SECTION 84(1)–(1C) 16.3

Section 84(1)–84(1C), as it now stands, reads as follows:

‘(1) The Upper Tribunal shall (without prejudice to any concurrent jurisdiction of the court) have power from time to time, on the application of any person interested in any freehold land affected by any restriction arising under covenant or otherwise as to the user thereof or the building thereon, by order wholly or partially to discharge or modify any such restriction on being satisfied— (a) that by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the Upper Tribunal may deem material, the restriction ought to be deemed obsolete; or (aa) that in a case falling within subsection (1A) below the continued existence thereof would impede [some reasonable user of the land for public or private purposes or, as the case may be, would unless modified so impede such user; or (b) that the persons of full age and capacity for the time being or from time to time entitled to the benefit of the restriction, whether in respect of estates in fee simple or any lesser estates or interests in the property to which the benefit of the restriction is annexed, have agreed, either expressly or by implication, by their acts or omissions, to the same being discharged or modified; or (c) that the proposed discharge or modification will not injure the persons entitled to the benefit of the restriction: and an order discharging or modifying a restriction under this subsection may direct the applicant to pay to any person entitled to the benefit of the restriction such sum by way of consideration as the Tribunal may think it just to award under one, but not both, of the following heads, that is to say, either— (i) a sum to make up for any loss or disadvantage suffered by that person in consequence of the discharge or modification; or (ii) a sum to make up for any effect which the restriction had, at the time when it was imposed, in reducing the consideration then received for the land affected by it. (1A) Subsection (1) (aa) above authorises the discharge or modification of a restriction by reference to its impeding some reasonable user of land in any case in which the [Upper Tribunal] is satisfied that the restriction, in impeding that user, either— (a) does not secure to persons entitled to the benefit of it any practical benefits of substantial value or advantage to them; or (b) is contrary to the public interest; 450

Who may apply 16.5 and that money will be an adequate compensation for the loss or disadvantage (if any) which any such person will suffer from the discharge or modification. (1B) In determining whether a case is one falling within subsection (1A) above, and in determining whether (in any such case or otherwise) a restriction ought to be discharged or modified, the Upper Tribunal shall take into account the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas, as well as the period at which and context in which the restriction was created or imposed and any other material circumstances. (1C) It is hereby declared that the power conferred by this section to modify a restriction includes power to add such further provisions restricting the user of or the building on the land affected as appear to the Upper Tribunal to be reasonable in view of the relaxation of the existing provisions, and as may be accepted by the applicant; and the Upper Tribunal may accordingly refuse to modify a restriction without some such addition.’

CONTRACTING OUT NOT POSSIBLE 16.4 Although section 84 is silent on the question of contracting out of the right to apply to the Tribunal, it seems clear that the right was conferred upon landowners not merely for their own personal benefit but also for the public good in ensuring that land was not frozen in a time warp. Accordingly, any covenant or agreement under which a landowner agreed not to make an application to the Tribunal will be void on the ground of public policy.5 In Hotchkin v Macdonald6 the Court of Appeal through Mummery LJ confirmed obiter at para 15 that the statutory jurisdiction under section 84 cannot be ousted by agreement between the parties.

WHO MAY APPLY 16.5 The answer to this question given in section 84(1) is: ‘any person interested in any freehold land affected by any restriction arising under covenant or otherwise as to the user thereof or the building thereon’. The words which follow the reference to ‘any person interested’ are considered in detail below and here simply the meaning of ‘person interested’ will be considered. This expression also appears in section 84(2) (without any following words) and it seems clear that the word ‘interest’ includes any legal or equitable interest in the burdened land. 5 In Johnson v Moreton [1980] AC 37 a provision in a lease of agricultural land prohibiting the tenant from serving a counter-notice under s 24(1) of the Agricultural Holdings Act 1948 was held by the House of Lords to be void. In the case of s 84(1), a prohibition on making an application would additionally seem to be void as an attempt to exclude the jursidiction of the Upper Tribunal as a statutorily created judicial body. 6 [2005] 1 P&CR 7.

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16.6  Modification and discharge pursuant to LPA 1925, s 84(1) Thus, in addition to the legal owner of a freehold or leasehold7 estate in the land (whether in possession or in reversion subject to a lease),8 a purchaser of freehold land under a contract which was conditional on an application being successful would qualify9 and so would a person entitled under an agreement for a lease,10 an occupier with an option to purchase11 and a mortgagee.12 It is considered, however, that the ‘interest’ referred to means a proprietary interest so that an intending purchaser or lessee who had not yet committed himself to a contract or been granted an enforceable option would not be a competent applicant, and that an occupational licensee would also not qualify.13 Section 84(1) applies to restrictions created both before and after the coming into operation of the section.14 However, by section 84(7)), it does not apply to restrictions ‘imposed on the occasion of a disposition made gratuitously or for a nominal consideration for public purposes’: see para 16.47 below. 16.6 An application may be made jointly by persons having separate interests in the same land,15 and combined applications may be made by two (or more) applicants each of whom owns a different property where each property is affected by the same restriction.16 Rule 17(1) of the previous Lands Tribunal Rules 1996 made specific provision for the President to dismiss the application if the applicant did not have a 7

A lease for any term will be sufficient – the requirements of s 84(12) are germane only to the identification of the leasehold restrictions which can be modified or discharged and not to the identification of the applicant seeking modification (whether of freehold or leasehold restrictions). Further, even if the lessor has issued a claim against the lessee claiming forfeiture of the lease (so that the lease is technically determined from the date of issue of the writ), nevertheless until the successful conclusion of the forfeiture proceedings without relief being granted to the lessee, the lessee still has a sufficient interest to qualify him as an applicant: see Driscoll v Church Comrs for England [1957] 1 QB 330, CA, applying Dendy v Evans [1910] 1 KB 263. As to the effect of judgment for forfeiture before the lessee applied for a new tenancy under the Landlord and Tenant Act 1954 but where at that time there was a pending application for relief from forfeiture, see Meadows v Clerical Medical and General Life Assurance Society [1981] Ch 70. 8 See, eg Re Vaizey’s Application (1974) 28 P&CR 517. 9 See Re Pioneer Properties Ltd’s Application (1956) 7 P&CR 264, 265 (Erskine Simes QC) and J Sainsbury plc v Enfield London Borough Council [1989] 1 WLR 590 (an application under s 84(2) by the first plaintiff as contracting purchaser under a conditional contract and the second plaintiff as vendor). See also Re Greaves’ Application (1965) 17 P&CR 57. 10 Re Independent Television Authority’s Application (1961) 13 P&CR 222, where the applicant television authority’s interest consisted of an agreement for a lease for a term of five years and an option for a further term of 16 years. It appears to be the case, however, that where the restriction affects the freehold (as it necessarily will do except in cases covered by s 84(12)), any discharge or modification will also affect the freehold, the Tribunal apparently having no power either to grant a modification limited in point of time (see ibid at 225 and Re Taroads Ltd’s Application (1951) 7 P&CR 42 at 45) or to grant a modification by way of a personal dispensation or licence to the applicant – see Re Ghey and Galton’s Application [1957] 2 QB 650, CA; but see, also, Re Ogle and Ministry of Health’s Application (1957) 9 P&CR 526, a decision of the Lands Tribunal made shortly after Re Ghey and Galton’s Application had been decided but before it had been reported. 11 Re Robinson’s and O’Connor’s Application (1964) 16 P&CR 106 (the second applicant). 12 Re Barclay’s Bank plc’s Application (1980) 60 P&CR 354. 13 Cf Re Da Costa’s Application (1986) 52 P&CR 99, LT. In Stevens v Hutchinson [1953] Ch 299, it was held that a ‘person interested’ in s 30(1) of the Law of Property Act 1925 means a person having a proprietary interest. An occupational licensee has no such interest: see National Provincial Bank Ltd v Ainsworth [1965] AC 1175. 14 Subsection (7). 15 See para 6.5 above. 16 Re Osborn’s and Easton’s Application (1978) 38 P&CR 251.

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What restrictions fall within scope of Tribunal’s jurisdiction? 16.10 sufficient interest in the land to make the application, and in that event will inform the applicant of his reasons for doing so. Under the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010,17 this would be covered by the general power in rule 8 to strike out a party’s case if he fails to comply with an order requiring him to show a valid interest, or if his case appears to have no reasonable prospect of it succeeding.

WHO MAY OPPOSE 16.7 The Upper Tribunal may direct appropriate advertisement and that notification be given regarding the application for discharge or modification.18 16.8 The application may be opposed by anyone ‘appearing to have the benefit of the restriction’: see section 84(3A). The burden is on those who seek to object to an application for discharge or modification of the covenant to show that they are such persons. The Upper Tribunal has power to require those who object to discharge or modification to file written evidence as to why they believe they are entitled to the benefit of the covenant and their entitlement to object. In the event that they fail to file a statement showing such entitlement on the balance of probabilities, the Tribunal will strike out their claims: see, eg James Hall v Maughan and Others.19

WHAT RESTRICTIONS FALL WITHIN THE SCOPE OF THE UPPER TRIBUNAL’S JURISDICTION? 16.9 By section 84(1) it is provided that the jurisdiction is exercisable in respect of: ‘any freehold land affected by any restriction arising under covenant or otherwise as to the user thereof or the building thereon’.

‘Freehold land’ 16.10 Whilst ‘land’ is defined in section 205(1)(ix) of the Law of Property Act 1925, the word ‘freehold’ and the expression ‘freehold land’, although frequently appearing in provisions in the Law of Property Act 1925, are not defined in the Act.20 Originally, ‘freehold land’ meant land held in free tenure as opposed to villeinage or copyhold tenure21 but subsequently it came also to signify an estate in land of uncertain duration as opposed to a fixed term of years.22 By 1925,

17 18 19 20 21 22

SI 2010/2600 (set out in Appendix 4 below). See r 33 of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010. [2016] UKUT 513 (LC). See, eg ss 5(1), 60(1), 85 (heading), 88 (heading), 117(1), 153(2) and 201(1). Pollock and Maitland, History of English Law, vol II, p 78. ‘Here it appeareth that tenant in fee, tenant in taile, and tenant for life, are said to have franktenement, a freehold, so called, because it doth distinguish it from termes of yeares,

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16.11  Modification and discharge pursuant to LPA 1925, s 84(1) it was the quality of uncertain duration which was the chief characteristic of a freehold, and freehold land signified land held for an estate of uncertain duration and accordingly excluded land held on lease, or leasehold land. By section 1(1)(a) of the Law of Property Act 1925, the only freehold estate which is now capable of subsisting or of being conveyed or created at law is the fee simple absolute in possession. Other former freehold estates, such as the fee tail, determinable fee and the life estate, can now subsist23 or be conveyed or created24 only as equitable interests in the land. 16.11 It is considered that the post-1925 meaning of the expression ‘freehold land’ in section 84(1)25 therefore is that ‘freehold land’ means land held for a freehold legal estate or a freehold equitable interest and that there is accordingly no reason why section 84(1) should not apply to a restriction which affects only an equitable life interest or a determinable fee simple interest in land to the exclusion of the legal freehold estate.26 However, notwithstanding that certain incorporeal hereditaments, such as easements, profits à prendre and rentcharges are ‘land’ within the meaning of the Law of Property Act 192527 and that they can exist at law for an interest equivalent to a fee simple absolute in possession, this is so only by analogy to corporeal hereditaments and the doctrine of tenure has never applied to incorporeal hereditaments.28 In this sense, therefore, the expression ‘freehold land’ is inappropriate to describe incorporeal hereditaments – and this was recognised by the provisions of section 201(1) of the Law of Property Act 1925.29

Restrictions affecting leasehold land 16.12

Section 84(12) of the Act provides as follows:

‘Where a term of more than forty years30 is created in land (whether before or after the commencement of this Act) this section shall, after the expiration of twenty-five31 years of the term, apply to restrictions affecting

chattels upon incertaine interests, lands in villenage, or customary or copyhold lands’ Coke upon Littleton, 43b. 23 Law of Property Act 1925, s 1(3). 24 Ibid, s 4(1). 25 Appearing as it does without the addition of any such words as ‘held for a legal estate’. 26 As, for example, might be the case where a tenant for life under the Settled Land Act 1925 entered into a restrictive covenant which bound his equitable beneficial interest but not the legal fee simple vested in him as tenant for life. As has been seen in Chapter 1, there is nothing to prevent the owner of a mere equitable interest in land from creating a restrictive covenant which will be binding on the land to the extent of the equitable interest. Under s 49(1) of the Settled Land Act 1925, the power of a tenant for life to impose a restrictive covenant binding on the settled land is limited to the occasion of a sale or other disposition or dealing with the settled land. 27 See s 205(1)(ix). 28 See Williams on Real Property (19th edn, 1901), pp 427–428. 29 This section, and its effect on bringing restrictions affecting incorporeal hereditaments within the scope of s 84(1), is considered below at para 16.19 et seq. 30 Calculated from the date of execution of the lease and not from any earlier date from which the term is expressed to be calculated: see Earl Cadogan v Guinness [1936] Ch 515, applied in Roberts v Church Comrs for England [1972] 1 QB 278. 31 Similarly calculated: Earl Cadogan v Guinness, above.

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What restrictions fall within scope of Tribunal’s jurisdiction? 16.16 such leasehold land in like manner as it would have applied had the land been freehold.32 Provided that this subsection shall not apply to mining leases.’33 16.13 Four distinct categories of restriction which may ‘affect’ leasehold land can be identified: (1) (2) (3) (4)

restrictions contained in the lease itself; restrictions subsequently entered into by the lessee with the lessor; restrictions entered into by the lessee with a third party; and restrictions affecting the freehold which run with the land and which existed at the date when the lease was granted.

(1)  Restrictions contained in the lease 16.14 It seems clear that it was this category which the legislature had in mind in enacting section 84(12). Almost all the reported cases which have been brought before the Tribunal by lessees have involved this category of restriction and, subject to the original term having been and remaining of sufficient length,34 have been dealt with accordingly.35

(2) Restrictions subsequently entered into by the lessee with the lessor 16.15 Subject to the length of term and vintage being sufficient, these restrictions have been accepted as falling within the jurisdiction, the only question being, in the context of the exercise of the Tribunal’s discretion, whether when the restrictions were subsequently entered into (or the covenants altered or reaffirmed), the Tribunal ought to act by analogy to the rule laid down in section 84(12) and dismiss the application unless a further 25-year period has elapsed from that date. It was held by the Court of Appeal in Ridley v Taylor that it ought to do.36

(3)  Restrictions entered into by the lessee with a third party 16.16 There is no doubt that a lessee can enter into a restrictive covenant with a neighbouring landowner so as to bind his leasehold interest.37 If he

32

In addition, jurisidiction to modify two particular types of covenant in leases of any duration is conferred upon the county court by s 3 of the Landlord and Tenant Act 1927 and s 610 of the Housing Act 1985. 33 For the definition of ‘mining lease’, see s 205(1)(xiv) of the Act. The Law Commission has recommended that leases of agricultural land should also be excluded from the jursidiction: see Codification of the Law of Landlord and Tenant (Law Com No 141) 1985. 34 See Earl Cadogan v Guinness [1936] Ch 515, applied in Roberts v Church Comrs for England [1972] 1 QB 278. 35 Specific cases are referred to under appropriate headings elsewhere in this volume. 36 [1965] 1 WLR 611. This is on the basis of the proper exercise by the Tribunal of its discretion, a matter which is considered separately below at para 16.56 et seq. 37 See also Abbey v Gutteres (1911) 55 Sol Jo 364.

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16.17  Modification and discharge pursuant to LPA 1925, s 84(1) does so, the question arises as to when he is competent to make a section 84(1) application. For example, suppose that in 1980 X, a lessee for a term of 999 years of a shop, covenanted with his freehold neighbour, Y, a chemist, that X would not carry on any business at the shop other than that of a retailer of long playing records. Such a covenant would prima facie not ‘affect’ the freehold.38 In such a case, notwithstanding that the restriction stands in no materially different position from one entered into by a freeholder with his neighbour, the wording of section 84(12) is apt to apply to such a case so as to impose a 25-year ban on X applying to the Upper Tribunal to modify the covenant so as to allow, for example, the sale of cassettes and compact discs. Moreover, if the lease to X had been for a term of 40 years or less, he would be barred from ever making an application.39

(4) Restrictions affecting the freehold which run with the land and which existed at the date when the lease was granted 16.17 Subject to the doctrines of notice and registration,40 such a restriction will ‘affect’ the leasehold land and therefore prima facie be subject to the section 84(12) constraints. However, unlike category (3) above, this category of restriction also affects the freehold. Accordingly, there is no section 84(12) constraint on an application being made by ‘any person interested’ in the freehold which is so affected. This gives rise to the question whether it can be said of the leaseholder (who, as a person interested in the leasehold is precluded from applying as such under section 84(12) constraints) that he is also a person ‘interested in any freehold land affected by any restriction’ within the meaning of section 84(1). 16.18 On this point, it is considered that there is no disqualification introduced by implication by section 84(12)41 since the provisions of that subsection appear to be germane only to the identification of the leasehold restrictions which can be modified or discharged and not to the identification of the applicant seeking modification (whether of freehold or leasehold restrictions). Accordingly, since a leaseholder can properly be said to have an ‘interest’ (in the proprietary sense) in the freehold reversion, he is a competent applicant for the modification or discharge of a restriction affecting the freehold.42

38 If the covenant were entered into with other lessees by way of building scheme, then if any particular lease came to a premature end, the burden of the covenants could bind the freehold reversion: Birmingham Joint Stock Co v Lea (1877) 36 LT 843. Further, independently of the existence of a building scheme, a covenant entered into by a lessee with a third party may continue as a covenant binding upon the freehold where the lease comes to a premature end: see Mayner v Payne [1914] 2 Ch 555. However, unless and until, in either case, the lease comes to an end, the freehold is presumably not affected. Quaere, whether the contingent liability of the freehold to be affected on the termination of the lease would make such a covenant one which, throughout, ‘affected’ the freehold. 39 As in the case of Dartstone Ltd v Cleveland Petroleum Co Ltd [1969] 1 WLR 1807 (considered above at para 9.26, footnote 42). This is almost certainly an unintended consequence of the legislation. 40 Discussed in relation to lessees, above at paras 9.22 et seq and 9.28 et seq. 41 Under, for example, the expressio unius est exclusio alterius rule of construction. 42 In Re Independent Television Authority’s Application (1961) 13 P&CR 222, the Independent Television Authority was held by the president of the Upper Tribunal (Erskine Simes QC) to

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What restrictions fall within scope of Tribunal’s jurisdiction? 16.20

Restrictions affecting incorporeal hereditaments 16.19 Section 201(1) of the Law of Property Act 1925 provides (so far as material) as follows: ‘(1) The provisions of this Act relating to freehold land apply to manors, reputed manors, lordships, advowsans, perpetual rentcharges, and other incorporeal hereditaments, subject only to the qualifications necessarily arising by reason of the inherent nature of the hereditament affected.’ Substituting the relevant words in section 84(1), it therefore appears that ‘any person interested in any incorporeal hereditament affected by any restriction’ may apply to the Upper Tribunal under the subsection. It is very doubtful, however, whether the ‘other incorporeal hereditaments’ referred to in section 201(1) should be taken to include appurtenant incorporeal hereditaments such as an easement. In this connection, textbook writers are unanimous in treating an easement as an example of an incorporeal hereditament notwithstanding that it cannot exist independently of the benefited land.43 However, both in the textbooks and in the Law of Property Act 1925, a distinction emerges between incorporeal hereditaments which can exist as separate entities44 (such as rentcharges and advowsans) on the one hand and appurtenant incorporeal hereditaments (such as easements) on the other.45 Given the use of the phrase ‘or other incorporeal hereditaments’ in section 201(1), read in conjunction with the words used prior to this in the sentence, the ejusdem generis rule of construction might lean in favour of this same distinction being applicable in section 201(1). 16.20 Further, and perhaps even more significantly, section 205(1)(ix) provides that ‘Land’ for the purposes of the Act includes ‘a manor, an advowsan, and a rent and other incorporeal hereditaments, and an easement, right, privilege, or benefit in, over, or derived from land …’.46 If, as appears to be the case from the reference to easements as a separate category from ‘other incorporeal hereditaments’, the latter words, where be a competent applicant for the modification of a restrictive covenant affecting the freehold although that Authority’s interest consisted only of an agreement for a lease of the application site for five years with an option for an extension for a further 16 years. The Tribunal also held that it had no power to grant a temporary modification (following Re Taroads Ltd’s Application (1951) 7 P&CR 42). The freeholder (the Croydon Corporation) did not join in the application, and would appear not to have been able to participate as an objector (since only persons entitled to the benefit of a restriction are competent objectors) but no doubt it had previously signified its approval thereof. 43 See, eg Williams on Real Property (19th edn, 1901), p 31; Megarry and Wade, The Law of Real Property (8th edn, 2012), para 27-001; Cheshire and Burn’s Modern Law of Real Property (18th edn, 2011), p 8; Gray, Elements of Land Law (5th edn, 2009) para 1.2.12. 44 Referred to in Williams on Real Property (19th edn, 1901), at p 409 as ‘incorporeal hereditaments in gross’, at p 427 as ‘self-existing incorporeal hereditaments’ and at p 429 as ‘separate’ incorporeal hereditaments. 45 At the time of publication of the 19th edition of Williams on Real Property in 1901, the editor (T Cyprian Williams, the illustrious son of the original author Joshua Williams) wrote at p 414: ‘Incorporeal hereditaments appurtenant to corporeal hereditaments are not very often met with.’ A right of way was given as an instance. In view of the large number of reported 19th century cases involving disputes relating to appurtenant rights of way, this statement is somewhat surprising. 46 By the same provision ‘hereditament’ means ‘any real property which on an intestacy occurring before the commencement of this Act might have devloved upon an heir’.

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16.21  Modification and discharge pursuant to LPA 1925, s 84(1) they appear in section 205(1)(ix) are confined to ‘self-existing’ incorporeal hereditaments, then the question is whether the like general words ‘and other incorporeal hereditaments’ in section 201(1) which similarly follow a specific enumeration of exclusively ‘self-existing’ incorporeal hereditaments would be likewise construed, on the basis of the rule of construction which generally requires the same words used in all parts of a statute to be given the same meaning,47 so that ‘incorporeal hereditaments’ in section 201(1) would also be construed as being meaning self-existing incorporeal hereditaments so as to exclude appurtenant incorporeal hereditaments such as easements. 16.21 In Re Brotherton,48 Joyce J said in relation to parts of the Settled Land Act 1882, similar to those in sections 201(1) and 205(1)(ix) of the Law of Property Act 1925, just referred to, that although ‘land’ in section 10(i) of the 1882 Act included ‘incorporeal hereditaments’, easements were not to be regarded as incorporeal hereditaments but ‘rights appurtenant to corporeal hereditaments’.49 Whether an easement falls within the words ‘and other incorporeal hereditaments’ in section 201(1) is important since restrictions on the enjoyment of an easement, such as a right of way have become increasingly common and may be highly relevant to the enjoyment of the dominant tenement. An example is the grant of a right of way over Greenacre ‘for all purposes connected with the use of Brownacre as a single private dwelling house’.50 16.22 If an easement is an incorporeal hereditament within the meaning of section 201(1), then there would appear to be no question but that such a restriction would be susceptible to an application under section 84(1). But if it is not, the restriction on the exercise of the easement of way is prima facie not a restriction affecting the dominant tenement as such but one affecting an easement, and the restriction would then appear to fall outside the scope of the subsection. On this latter basis, then the user restriction in a grant of a right of way over Greenacre ‘for all purposes connected with the use of Brownacre as a single private dwelling house’, would not be susceptible to discharge or modification under section 84(1) unless on the facts it could be shown that the restriction affected not only the exercise of the easement but also the use to which the dominant tenement could effectively be put – in which case the restriction on the easement might be said also to ‘affect’ freehold land.51 Thus, in the example cited, if Brownacre has no other means of access, the restriction might effectively prevent Brownacre from being used except as a single private dwelling house. It might therefore be argued that the restriction, whilst directly affecting the easement, also indirectly ‘affected’ Brownacre.52 An argument to

47 See Bennion on Statutory Construction, 6th edn, LNUK (2013), p 1034. 48 (1908) 77 LJ Ch 58. 49 Notwithstanding what was said in Jones v Watts (1890) 43 ChD 574, at p 585, which was not a decision under the 1882 Act and was said by Joyce J to involve ‘very special’ circumstances. 50 The grant of a general right of way without such words as those in italics will enure for the benefit of the dominant tenement for whatever purposes it is inherently capable of being put nothwithstanding that in the same instrument the dominant tenement is restricted to a particular use: see Re Gadd’s Land Transfer [1966] Ch 56 (Buckley J). 51 As to which, see below. 52 It would, of course, be otherwise if there was adequate alternative unrestricted access to Brownacre. As to the construction of ‘affect’ in the expression ‘so far as the same affect the property’ in a covenant to perform existing obligations under a positive covenant, see TRW Steering Systems Ltd v North Cape Properties Ltd (1993) 69 P&CR 265.

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What restrictions fall within scope of Tribunal’s jurisdiction? 16.26 the contrary might be that the easement (howsoever restricted) was, by definition, a benefit to Brownacre (ie the freehold land) rather than a restriction and that on this basis, since the easement itself was not freehold land53 there was no ‘freehold land’ affected by the restriction. 16.23 Re Brotherton appears to be the closest case there is. There appears to be no decided case on the point under section 84(1) of the Law of Property Act 1925. The absence of any reported Tribunal case relating to an application for discharge or modification of an incorporeal hereditament again suggests it is not generally regarded as including such things as easements. It seems unlikely given the various matters referred to above that restrictions contained within an easement would be held to be within the ambit of section 84(1).

‘Affected’ 16.24 Prima facie, freehold land will only be ‘affected’ by a restriction, if the restriction is either clearly or arguably enforceable by some person against a person in occupation of or having an interest in the land. If it clearly appears that no one is entitled to enforce it, then it would seem to follow that the land is not ‘affected’ by it – with the result that the subsection would not apply. 16.25 In Re Purkiss’ Application,54 the following observations were made: ‘If, therefore, the applicant’s land was held not to be affected by any restriction, or if, to take an extreme case as here suggested, it was the right answer to say that there was no building scheme and no other suggestion of restriction had been put forward, then the premise on which the tribunal’s jurisdiction rested had gone altogether.’55 ‘The truth of the matter is that all orders under sub-section (1) are made on the footing that the restrictions contained in the deed under review are enforceable by some one or more persons, for only in those circumstances is there anything to modify or any jurisdiction in the tribunal to modify.’56 ‘In this case either the land on which the applicant desires to build flats is affected by a restriction or it is not. If it is not affected by any restriction (as was either the determination or the provisional opinion of the member of the Lands Tribunal, it matters not which), the tribunal had no jurisdiction to make any order.’57

Determinations by the Upper Tribunal as to whether anyone is entitled to enforce the covenant 16.26 In the immediate aftermath of Re Purkiss’ Application, there were a few cases where the Tribunal insisted on standing over the application until it

53 54 55 56 57

See above, para 16.11. [1962] 1 WLR 902, CA. Per Lord Evershed MR, ibid, at 908. Per Upjohn LJ, ibid, at 911. Per Diplock LJ, ibid, at 914.

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16.27  Modification and discharge pursuant to LPA 1925, s 84(1) was established by separate court proceedings that there was someone entitled to enforce the restrictions.58 However, it is clear from later cases that the Tribunal will now readily assume, unless the contrary is clearly demonstrated, that there is someone who is entitled to enforce the restriction.59 There appears to be no reported decision where jurisdiction has been declined by the Tribunal on this ground.60 Strictly speaking, it is considered that the onus lies on the applicant to show, on the balance of probabilities, that the land was affected by the restriction, ie that there was someone entitled to enforce it, albeit that person may be unidentified.61 However, in the absence of anyone taking the point and suggesting there is not, the Tribunal will proceed on the footing that there is someone so entitled. If the issue is raised, the proceedings may be stayed for the court to determine by declaration (under section 84(2) of the 1925 Act) the question of whether anyone exists who has the benefit of the restriction and whether such persons include the objectors. However, in the absence of such proceedings being embarked upon, the Tribunal will need to decide whether the objectors are entitled to the benefit of it, and section 84(3A) makes clear that is entitled to give directions as to persons who may be admitted as objectors; that is to say, as to ‘those appearing to be entitled to the benefit of the restriction’. 16.27 However, as is clear from the decision of the High Court in Doberman v Watson,62 this is a purely procedural decision. The Tribunal has to decide for the purpose of its proceedings whether to admit objectors or not. This does not mean, though, that the decision is a binding decision (other than procedurally in its proceedings for the purpose of admitting the objectors or not) as to whether the objectors do have the benefit of the restriction or whether the land is ‘affected’ by the restriction because they have the benefit of the restriction and are entitled to enforce it. Accordingly, a decision by the Tribunal to admit the objectors, and to hear and determine an application on the basis of an assumption, or decision, they are 58 See, eg Re Lipton’s Application (1964) 16 P&CR 97. 59 See, for example, Re Coulsdon and Purley UDC’s Application (1951) 7 P&CR 16. The Tribunal held that there is an assumption, in the absence of the contrary being established, that a restriction remains operative. See also R v Westminster City Council, ex p Leicester Square Coventry Street Association Ltd (No 2) 87 LGR 675, (1990) 59 P&CR 51. 60 In two Lands Tribunal decisions delivered in 1961, the Tribunal had held that where it was satisfied that no one was entitled to the benefit of the restrictions, it automatically followed that it had jurisdiction to modify or discharge them under paragraph (c) of s 84(1): see Re Wrighton’s Application (1961) 13 P&CR 189 (Erskine Simes QC) and Re Wickens’s Application (1961) 13 P&CR 227 (HP Hobbs FRICS). But in the light of the above observations in Re Purkiss’ Application, these decisions must be regarded as erroneous. In the Lands Tribunal case of Re St Albans Investments Ltd’s Application (1956) 7 P&CR 260, the Tribunal assumed jurisdiction where there was no indication that the covenants had been imposed for the benefit of anyone other than the original covenantee and where none of the 14 objectors produced any evidence to show that they were entitled to the benefit. As to the position where it is positively established that the covenants are personal to the covenantee but where that covenantee is an objector, see below, para 23.2, footnote 4. 61 Compare R v Westminster City Council ex p Leicester Square Coventry Street Association Ltd (No 2) 87 LGR 675, (1990) 59 P&CR 51 where despite ‘strenuous efforts’, no-one was discovered who could enforce a restrictive covenant relating to a part of Leicester Square, but where the court (Simon Brown J) concluded, on the balance of probabilities, that the covenant remained enforceable (this conclusion being seminal to the jurisdiction of the court to entertain proceedings for judicial review). 62 [2017] EWHC 1708 (Ch).

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What restrictions fall within scope of Tribunal’s jurisdiction? 16.29 entitled to the benefit of the covenant will not create a cause of action or issue estoppel or be binding, and may subsequently be challenged in the courts, which have the sole jurisdiction to determine such questions.63

Where the covenant is purely personal 16.28 It is now firmly established that the jurisdiction of the Tribunal extends to the contractual as well as the proprietary element of a restriction the burden of which ‘affects’ the land in the sense that it is capable of running with the land.64 Furthermore, where the covenantor has an interest in land affected by it, he is able to seek modification or discharge even though the burden of the covenant will not run with the land. It might be thought that such a restriction – which, although binding on the current owner as covenantor, is purely contractual (in the sense that the burden is incapable of running with the land and so has no proprietary element) does not ‘affect’ the land. In Ridley v Taylor,65 where Russell LJ for the court said that he ‘must not be taken to suggest that the section confers jurisdiction to modify or discharge in favour of direct covenantors restrictions affecting land in cases where, having regard to the nature of the covenant, the burden of the restriction would not run with the land or the term’, and saying ‘Such a question is not before us’, and so expressly leaving the question open. 16.29 However, in Shepherd Homes Ltd v Sandham (No 2)66 Megarry J held that if67 the covenantee did not own neighbouring land at the date of the covenant (which remained to be investigated) so that the burden of the covenant could not run with the covenantor’s land, section 84(1) nevertheless applied as the covenantor held land to which the restriction applied at the at the time of the application which was ‘affected by’ the covenant.68 This effectively overruled the decision of the Lands Tribunal in Re Chatham Borough Council’s Application69 (which was not cited), where an application by the original covenantor who continued to hold the land to which the restriction applied was opposed by the original covenantees and it was held that as the covenant did not run with the land (not having been taken for the benefit of land held by the covenantees) the jurisdiction under section 84(1) did not arise.70

63 See also Re The Croft (Bickershaw) Ltd’s Application [2017] UKUT 339 (LC) at para 30 in relation to the effect in the Tribunal proceedings of an interlocutory decision to admit objectors. 64 See Ridley v Taylor [1965] 1 WLR 611, CA and the Lands Tribunal decisions in Re Brown’s Application (1977) 35 P&CR 254 and Re New Ideal Homes Ltd’s Application (1978) 36 P&CR 476. 65 [1965] 1 WLR 611, at 621. 66 [1971] 1 WLR 1062 (application to remove a stay which had been granted earlier by the High Court under s 84(9) to enable the defendant covenantor to apply to the Lands Tribunal). 67 Which had not been established pending an investigation as to whether the covenantee did or did not own neighbouring land at the date of the covenant. 68 [1971] 1 WLR 1062. See pp 1069–1070. This effectively overruled the decision of the Lands Tribunal in Re Chatham BC’s Application (1969) 21 P&CR 661 (not cited in the Shepherd Homes case). 69 (1969) 21 P&CR 661. 70 Though the same Tribunal Member (Sir Michael Rowe QC) had earlier said in Re Watson’s Application (1966) 17 P&CR 176, at 178, ‘The covenant is, and I think was conceded to be,

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16.30  Modification and discharge pursuant to LPA 1925, s 84(1) 16.30 By way of enlargement of the reasoning which found favour with Megarry J, however, it may be pointed out that a mere contractual restriction on user entered into by the present occupier of, or owner of an interest in, the land may generally be enforced by injunction and in this sense the land may well be said to be ‘affected’ by the restriction.71 Further, in another context, the Court of Appeal has held that a positive covenant (whose burden could not run) ‘affected’ the land to which it related.72 The principal arguments against the decision would appear to be twofold. First, that the very fact that the legislature saw fit to confine section 84(1) to the single category of restrictions whose burden was capable of running with the land (ie, restrictions on user) demonstrates that it was not concerned with the type of obligation which was incapable of running with the land.73 Secondly, that since a personal restriction would not bind a successor in title, its enforcement by injunction could be obviated by the covenantor by means of the simple expedient of disposing of the land to another and that it cannot have been the intention of the legislature to provide elaborate machinery for the purpose merely of relieving the original covenantor (assuming him to remain a ‘person interested’) from any personal liability in damages which the original covenantor might remain under74 in respect of the development of the land by his successor in title.75 16.31 Obviously, if the burden of the covenant does not run with the land and a successor in title now owns it, there could be no application for discharge or modification because the covenant no longer affects the land (and there would be no need for the landowner to seek any such discharge or modification of something not binding on him, though there could still be contractual liability in the original covenantor to the original covenantee by virtue of privity of contract).

‘Any restriction arising under covenant or otherwise … as to … user … or building’ 16.32 Looked at narrowly, the subject-matter of the Tribunal’s jurisdiction is not the covenant or other form of device which creates the restriction but the restriction which results from that creation. In Ridley v Taylor,76 Russell LJ, whilst accepting the distinction, nevertheless expressed the view that since the Tribunal had jurisdiction to discharge or modify the essence of a covenant (the restriction which resulted from it), this necessarily included jurisdiction to affect the covenant itself.77 no more than a personal covenant for breach of which Mr Connell could bring an action for damages. But I do not think I can disclaim jurisdiction on this ground, nor did I understand Mr Sumner, who appeared for Mr Connell, to suggest that I should’. 71 Winter Garden Theatre (London) Ltd v Millenium Productions Ltd [1948] AC 173. 72 TRW Steering Systems Ltd v North Cape Properties Ltd (1993) 69 P&CR 265. 73 An argument to this effect, was, however, put before Megarry J and rejected by him at 1071A. 74 But there would not necessarily be any such liability: see Chapter 11 at paras 11.54 et seq. 75 As suggested above at para 16.4, the primary object of the jursidiction conferred by s 84(1) would appear to be for furthering the public good in ensuring that land was not frozen in a time warp. 76 [1965] 1 WLR 611, CA. 77 This would seem to be consistent with principle. If signals sent (the essence) by a signaller (the source) can be intercepted and negatived or altered, the effect is as great on the signaller as if the signaller had made them himself.

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What restrictions fall within scope of Tribunal’s jurisdiction? 16.34 It is clear that the Tribunal has no jurisdiction in respect of a positive covenant. Thus, in Re Blyth Corpn’s Application,78 an application by the corporation for the discharge of a covenant to erect and maintain a fence on the boundary of land which at the time of the application obstructed a new estate road was dismissed as falling outside the Tribunal’s jurisdiction.

‘Restrictive’ 16.33 Whether any given provision relating to the user of land imposes a restriction (as to user or building) is a question of construction. The question is one of substance rather than terminology – that is to say, whether in substance the provision requires that something shall not be done.79 Thus, in Re Forestmere Properties Ltd’s Application,80 a lease for a term of 999 years contained a covenant on the part of the lessee that the lessee ‘will use the demised premises for the purpose of high-class cinematograph and/or theatrical exhibitions and will not use the same for any other purpose’. The objectors claimed that the Lands Tribunal had no jurisdiction to discharge or modify the covenant under section 84(1) contending that the covenant was positive. Treating the contention as a preliminary point of law, the Tribunal ruled, in an oral decision given at the beginning of the ensuing six-day hearing, that the covenant was negative in substance and that the Tribunal had jurisdiction in the matter.81 16.34 Again, in Re Abbey Homesteads (Developments) Ltd’s Application,82 a covenant that ‘An area of 1.30 hectares … shall be reserved for school purposes’ was held by the Court of Appeal (reversing the decision of the Lands Tribunal on this point) to be restrictive and so within the Tribunal’s jurisdiction. On the other hand, in Westminster City Council v Duke of Westminster,83 Harman J held a covenant in a 999-year lease that the demised premises ‘shall be kept and used only for the purposes of the Grosvenor Housing Scheme as dwellings for the working classes within the meaning of the Housing Act 1925’ to be a positive covenant.84 78 79 80 81

(1962) 14 P&CR 56 (LT). See above, para 1.10 et seq. (1980) 41 P&CR 390 (VG Wellings QC). In leases, the burden of both positive and restrictive covenants runs with the lease in a similar manner under the rule in Spencer’s Case (1583) 5 Co Rep 16a and it is quite common for lessees to undertake a positive obligation to carry on a particular business on the demised land which is intended to be (and can be) enforced as such: see Caerns Motor Services Ltd v Texaco Ltd [1995] 1 All ER 247. In the Milius case, whilst the covenant undoubtedly embraced a negative obligation not to use the land for any purpose other than that specified, there would seem to have been no reason to suppose that it did not also impose a positive obligation actually to carry on that use. If (as seems to have been implicit in the approach adopted in the oral decision) the Tribunal was proceeding on the basis that its jursidiction would not have extended to such positive obligation – had it been found to exist – then little purpose would have been served by the release obtained from the restrictive obligation. But in the case of leases, it can perhaps be argued that the positive obligation imposed by a covenant is itself a restriction on the user of the demised premises so that the Tribunal’s jurisdiction would apply also to relief from such positive obligation. Sed quaere. 82 (1986) 53 P&CR 1, 5. 83 [1991] 4 All ER 136, 147 (Harman J). 84 This construction took into account both the contrasting language of other provisions which were expressed in restrictive terms and the surrounding circumstances at the time of the

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16.35  Modification and discharge pursuant to LPA 1925, s 84(1) 16.35 In Re Carbury 2000’s Application85 a covenant that ‘Not more than nine garages shall be erected on the site and there shall be a single garage for each flat’ was construed by the Lands Tribunal to be entirely negative in nature. The Tribunal held as follows: ‘On the face of it restriction 5 is a hybrid with a restriction at the beginning not to erect more than nine garages but a positive obligation at the end that each flat shall have a single private garage. I agree with the applicant’s submission, however, that the deed does not contain a positive covenant to build garages and that the substance of restriction 5, when read in the context of the deed as a whole, is that of a negative covenant restricting the construction of flats without garages. The words “… and there shall be” in restriction 5, taken in context, do not show “a clear shift of meaning from restraint to activity” (per Harman J in Westminster City Council v Duke of Westminster [1991] 4 All ER 136 at 147d).’

‘User’ or ‘building’ 16.36 The only category of ‘restriction’ to which section 84(1) applies is a restriction as to the ‘user’ of land or as to the ‘building’ on land. Prima facie, a restriction on building is a species of restriction on user – and this seems to be implicit in certain other statutory provisions dealing with restrictive covenants.86 Restrictions which do not relate to the user of land are by no means uncommon. Examples are covenants not to sell except at a certain price or a covenant not to sell except to a purchaser who enters into certain covenants.87 The Upper Tribunal has no jurisdiction over such restrictions, subject to a possible argument that user is indirectly affected thereby.88 For the same reason, it would have no jurisdiction to modify or discharge a covenant on the part of a landowner not to make any application to the Upper Tribunal – but such a covenant would in any case be void as being contrary to public policy.89 granting of the lease in 1937. For a consideration of the cases in which covenants framed positively have been construed as restrictive covenants, see Chapters 1 and 11. 85 (2006) LP/84/2004. 86 Thus, ss 40(1) and 50(1) of the Land Registration Act 1925 each referred to a covenant ‘with respect to the building on or other user of registered land’; and s 49(1)(b) of the Settled Land Act 1925 authorises a tenant for life on the sale of settled land to enter into or impose ‘any restriction with respect to building on or other user of land’. Section 2(5)(ii) of the Land Charges Act 1972 defines a restrictive covenant as ‘a covenant or agreement … restrictive of the user of land …’ Although the activity of ‘building’ is not referred to in this definition, it is inconceivable that a covenant restricting building on land (either generally or in a particular way) is not within the definition. As to whether a covenant not to erect buildings other than private dwelling houses imposes a user restriction on the buildings when erected or a restriction on their subsequent alteration, see above, para 11.21. However, there can be little doubt that an express restriction on altering any building is a restriction on user within the meaning of s 84(1). It has already been seen in Chapter 1 that the doctrine of Tulk v Moxhay only applies to restrictions on the user of land and the cases considered in Chapter 11 dealing with individual restrictions shows the breadth of coverage of this concept. 87 For a list of other non-user restrictions, see Chapter 28; and as to the non-running of the burden of such restrictions, see Chapter 1. 88 See Re Milius’s Application (1995) 70 P&CR 427 at 432 (HH Judge Marder QC, President). 89 Above, para 16.4. Such covenants, whilst uncommon, are by no means unknown – but they need hold no terrors given the decision of the House of Lords in Johnson v Moreton, and comments of the Court of Appeal in Hotchkin v McDonald refered to at para 16.4.

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What restrictions fall within scope of Tribunal’s jurisdiction? 16.39 16.37 Nevertheless, cases of restrictions which have not related to user or building have been dealt with by the Tribunal, this point having gone without challenge. Thus, in Re Hickman & Sons Ltd’s Application,90 a restriction that no person should hold more than one plot was discharged and in Re Barclays Bank plc’s Application91 a restriction that a bungalow should not be sold or leased except as one parcel with other land, was discharged as being obsolete. Further, in Stannard v Issa,92 the Privy Council, on an appeal from the Court of Appeal of Jamaica, had before it a covenant imposing a restriction ‘that the said land shall not be sub-divided’. On legislation corresponding to the unamended section 84(1), the Privy Council (without referring to the point) treated the restriction as one susceptible to modification or discharge under the statutory provisions. Since in each of the above cases the point went without consideration, they cannot be regarded as determinative on this point. 16.38 The Lands Tribunal was seised of the point in Re Milius’s Application93 which related to a covenant with the Isle of Anglesey Borough Council imposed on the occasion of a ‘right to buy’ sale under section 157 of the Housing Act 1985, that no disposal should be made without the consent of the council. Whilst doubting whether the Tribunal had jurisdiction to deal with the covenant, the point was not actually decided by the Tribunal, which dismissed the application on the grounds that no case had been established and that in any event it would not have exercised its discretion in favour of the applicant. 16.39

Considering the arguments, the President (HH Judge Marder QC) said,

‘I entertain considerable doubt as to whether the restrictive covenant which is the subject matter of this application falls within the jurisdiction conferred by section 84(1) of the Law of Property Act 1925. That section relates to “land affected by any restriction […] as to the user thereof or the building thereon […]” which in my view means that the Tribunal may only consider a covenant which has the effect of imposing a restriction on the user of the land or of the buildings on land. As was pointed out on the council’s behalf, the particular restriction imposed in this case (the terms of which are set out earlier in this decision) does not purport to restrict the user of the property in any way, but is a restriction on a “relevant disposal”, in effect a conveyance of the freehold or the grant of a lease for more than 21 years (see the Housing Act 1985, section 159). Such a disposal is prohibited without the consent of the council, which consent may not be withheld in the event of a sale or lease to a person qualified by work or residence as a “local person”. It is perhaps arguable that the user of the property may, in practice, be limited or restricted by the restriction on free disposition of a legal interest. On the other hand, some limitation on user may be seen as a possible indirect consequence of the restriction on disposal and not as the effect or the purpose of the covenant. As Mrs Williams put it, reasonable user of the property could not be said to be impeded by this restriction, but only if an application for consent to a disposal were unreasonably refused. The issue is not without difficulty, and I am unaware of any direct judicial authority. 90 91 92 93

(1951) 7 P&CR 33. (1990) 60 P&CR 354 (VG Wellings QC, President). [1987] AC 175, PC. (1995) 70 P&CR 427.

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16.40  Modification and discharge pursuant to LPA 1925, s 84(1) However the point was not fully argued before me, and it appears to me to be unnecessary to decide it since, assuming that the Tribunal has jurisdiction in respect of the present application, I have reached the conclusion on other grounds that the application cannot succeed and must be dismissed.’ 16.40 The question of whether an obligation is under (a) one ‘restricting the … use of the land’ did directly arise for decision, however, and was considered by the Court of Appeal, in R (Khodari) v Kensington and Chelsea Council.94 This was in the context of a planning obligation under section 106 of the Town and Country Planning Act 1990,95 but the decision on this point appears equally applicable in the current context.96 In that case, the facts were as follows: The Council’s local development plan document specified that, because of pressure on parking in the borough, which was subject to a Controlled Parking Zone requiring residents in the area to hold a parking permit in order to be able to park on the highway, agreements for occupation to be parking permit free would be required for all new additional residential development. The purported section 106 deed put forward on the application for planning permission therefore required that: (a) there be a covenant not to apply for parking permits for the additional units, nor knowingly to permit any owner or occupier of the permit free units to do so; and to surrender any permit issued in respect of those units; (b) prospective owners or occupiers of the additional units be notified that they would not be entitled to apply for parking permits; and (c) a covenant be included in any lease of the additional units preventing the lessee from applying for a parking permit and entitling the Council to enforce that obligation as a third party. In addition, there was an obligation to pay a one-off ‘monitoring fee’ of £500 on execution of the agreement. The Court of Appeal held that the obligations were not ones which restricted the use of the land itself, and therefore were not capable of being planning obligations under section 106(1). 16.41 However, a covenant not to allow occupation of land by a person who has certain characteristics (such as having a parking permit) may be a way round the problem. This could then be said to be restrictive of the use of the land by occupation by anyone else. In Blumenthal v Church Commissioners for England,97 the Court of Appeal held that a covenant that part of a building be occupied by a particular entity (the Royal Society of Literature) amounted, in its context, to a restrictive covenant namely not to let the premises to anyone else, which the Upper Tribunal would have jurisdiction to discharge (that is to say, which was a legally enforceable covenant restrictive of the user of the land).98

94 [2018] 1 WLR 584. 95 As to which, see Chapter 32. 96 A valid s 106 planning obligation can ony be created where the obligation falls within one of the paragraphs in s 106(1)(a) to (d). the case concerned paragraph (a), which is only satisfied where the obligation is one ‘restricting the … use of the land in any specified way’. 97 [2005] 2 P&CR 20. 98 Cf Re Milius’s Application (1995) 70 P&CR 427 (where it was doubted by the Lands Tribunal whether a covenant preventing disposal of premises without the written consent of the

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What restrictions fall within scope of Tribunal’s jurisdiction? 16.43 In Cosmichome Ltd v Southampton City Council,99 a covenant restricting the use of the land to the BBC or someone exercising the BBC’s franchise (of value to the covenantee council in having a national institution based in its area) was regarded as restrictive.100 See also Re Quarterly’s Application at para 20.87 below. Even more clearly, a planning condition (an alternative to the use of a section 106 planning obligation) can be imposed requiring occupation by a person with specific qualifications, such as being a person employed locally in agriculture.101 Occupation only by a person not holding a parking permit would seem to be a similar requirement.

‘Arising under covenant or otherwise’ 16.42 Whilst the words ‘or otherwise’ lead naturally to the conclusion that the subsection applies to restrictions created by writing alone, as well as by deed, and to implied covenants,102 there are two particular aspects of those words which require more detailed consideration, namely: (1) whether they cover restrictions which are imposed by law otherwise than as a result of agreement, eg a restriction imposed by an order of the court or by a statutory body in the exercise of a statutory power; and (2) whether they cover restrictions which although created by agreement, operate in a way which falls outside the ordinary law of covenants, eg, restrictions enforceable only by the exercise of a right of re-entry or only under the doctrine of Halsall v Brizell.103 In each case the question is one of construction of these statutory words, upon which there is a surprisingly little authority.

(1) Restrictions imposed by law other than as a result of agreement 16.43 In Re Calthorpe Estate, Edgbaston,104 Foster J expressed the view that ‘the words of that section are wide enough to apply to covenants in a scheme under section 19’ of the Leasehold Reform Act 1967. Under section 19(5) of the 1967 Act, the High Court has power to approve a scheme of rights and obligations submitted for its approval which. However, when so approved and registered as a local land charge, it is provided that they are to be ‘be enforceable by the landlord for the time being against [the persons occupying

99 100 101 102 103 104

covenantee council, such consent not to be withheld where the conveyance or grant was to a person who had been resident in a particular area was restrictive of the user of the property), and see para 1.12 above. [2013] 1 WLR 2436. Though the covenant did not benefit land of the council, so was held to be unenforceable against successors in title. In relation to this case, see further para 1.48 above. See, eg Alderson v Secretary of State (1999) The Times, 05 July. Compare the language of s 82(1) of the Law of Property Act 1925. [1957] Ch 169. The non-covenant-like nature of obligations arising under this doctrine was recognised by the Law Commission in para 24.31 of its 1984 Report on The Law of Positive and Restrictive Covenants (Law Com No 127). (1973) 26 P&CR 120, at 127.

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16.44  Modification and discharge pursuant to LPA 1925, s 84(1) or interested in the relevant land] as if each of them had covenanted with the landlord for the time being to be bound by the scheme’.105 Thus, although the scheme becomes effective only as a result of an order of the court, the resulting rights and obligations are statutorily deemed to be of the same effect, for the purpose of enforcement, as if they been imposed by covenants. In relation to restrictions which are enforceable by reason of the existence of a building scheme, it has been seen106 that certain aspects of such enforceability may fly in the face of the theory that implied covenant (or implied agreement) is at the root of building schemes. However, such restrictions have often been the subject of successful applications under section 84(1). They clearly arise, if not on the basis of implied covenant, on the basis of mutuality,107 which would appear to be sufficiently analogous to (if not, in fact, an example of) agreement so as to give rise to no difficulty in treating them as arising ‘under covenant or otherwise’. 16.44 As to restrictions imposed by a statutory body in the exercise of a statutory power, an example of widespread application is the planning condition subject to which planning permission is granted. The Town and Country Planning Act 1990 contains provisions authorising the imposition of such conditions108 and provides its own machinery both for their enforcement109 and discharge110 by the planning authority.111 In these circumstances, it would be very surprising if, in addition to the specific statutory machinery for discharge or modification provided by the 1990 Act, the Upper Tribunal machinery were also found to be applicable, and it is not considered that it would be.112 16.45 As to restrictions imposed on land by a private or local Act of Parliament, in Re Elaen & Co Ltd’s Application113 an application was made to the Tribunal, consisting of Sir William Fitzgerald QC and Mr Erskine Simes QC, for the modification of a restriction contained in the Nottingham Corporation Act 1883 (as amended) restricting the number of dwelling houses on certain land to five. In the course of the hearing, the applicant was granted leave to 105 106 107 108 109 110

Leasehold Reform Act 1967, s 19(10). Above, paras 8.6–8.12. See the ‘mutuality’ theory discussed above at para 8.13 et seq. Section 72. Sections 173 and 187. Section 73 (discharge taking effect by the grant of a new permission without the conditions or with modified or replacement conditions). 111 As to imposition, see s 72 and as to enforcement, see ss 173 and 187A. 112 There are, of course, distinct limits on the power of the planning authority to impose conditions on the grant of planning permission and, in particular, if the planning authority wishes to impose a specific condition on other land not the subject of the application then it cannot do so by condition but only by a ‘s 106 agreement’ or undertaking – to which the jursidiction of the Upper Tribunal applied in respect of restrictive covenants entered into before 25 October 1991 but to which it does not apply in the case of subsequent covenants. In some cases, a condition which the planning authority wishes to impose may lend itself to imposition either as a planning permission condition or as a provision in a s 106 agreement and, in exercising its choice, the planning authority would formerly no doubt (in the case of a condition restrictive of user) have been mindful of the different machinery applicable to its possible subsequent modification or discharge. For the limits of the power under s 73 of the Town and Country Planning Act 1990 (which enables a new permission to be granted with no, or different, conditions attached, but not to make a fundamental alteration to the permission previously granted or with conditions that could not have been imposed when it was granted), see R v Coventry City Council, ex p Arrowcroft Group plc [2001] PLCR 7, and Kane Construction v Secretary of State [2011] JPL 304. 113 (1962) 14 P&CR 230.

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What restrictions fall within scope of Tribunal’s jurisdiction? 16.47 amend his application by seeking a discharge of a covenant in a deed to observe the restriction in place of the restriction contained in the Act so that it was not necessary for the Tribunal to decide whether it had jurisdiction to modify the statutory restriction. But in giving its decision, the Tribunal doubted whether the words of section 84(1) ‘would entitle the Tribunal to make an order which would, in effect, amend or repeal a statutory provision’.114 In the absence of authority to the contrary, it is submitted that the words ‘or otherwise’ must be construed by reference to115 the word ‘covenant’ and that this connotes law-making at the level of individuals116 and not law-making at any higher level such as an order of the court, the exercise by a public body of statutory functions or the exercise of legislative power. However, in the case of restrictions arising by law-making of any of the latter bodies, if the law-making process expressly includes a provision that the restriction is to be treated as enforceable as a covenant or agreement between the parties, then all the logical consequences of this should flow, including the application of section 84(1).

(2) No jurisdiction where restriction imposed without consideration being provided or in certain statutory cases 16.46 Apart from building scheme applications, with one exception there appears to be no reported example of an application to the Tribunal to modify or discharge a restriction which has not initially had contractual effect as a covenant or agreement.117 The exception is Re Plumpton Parish Council’s Application118 where, for the purposes of the decision (which was negative by reason of section 84(7)), a provision in a conveyance of land that it should be held ‘upon trust to permit the same and the building or buildings to be erected thereon to be used as the village hall and club for the use of the inhabitants of the parish of Plumpton and neighbouring parishes and for no other purposes whatsoever’ was treated (without reasoning) as being within section 84(1) apart from the fact that section 84(7) excluded it because it had been entered into gratuitously. 16.47 Section 84 applies to restrictions created both before and after the coming into operation of the section.119 However, it does not apply to the following: (1) Restrictions ‘imposed on the occasion of a disposition made gratuitously or for a nominal consideration for public purposes’ (excluded by reason of section 84(7)). In Westminster City Council v Duke of Westminster,120 Harman J expressed the view that any value ‘more than, say, £5’121 passing at the time of the 114 Ibid, at p 232. 115 The ejusdem generis rule cannot be prayed in aid since there is no preceding class of concepts but merely the single concept of ‘covenant’. 116 In the sense of the ‘norms’ of law-making in Kelsen’s theory of law. 117 For example, a restriction breach of which is only remediable by the exercise of a right of reentry, or a restriction the observance of which is merely a condition precedent to the exercise of some right. 118 (1962) 14 P&CR 234. 119 Subsection (7). 120 [1991] 4 All ER 136, 145–146; revsd (1992) 24 HLR 572. 121 About £12 in 2018 values.

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16.47  Modification and discharge pursuant to LPA 1925, s 84(1) disposition would prevent the disposition being for a nominal consideration and held that the covenants on the part of the lessee contained in the lease represented substantial value so that section 84(7) did not remove the restrictive covenants in the lease from the jurisdiction of the Lands Tribunal. In Re Plumpton Parish Council’s Application,122 an application to discharge a restriction the continuance of which would, because of changed circumstances, ‘practically sterilise’ the land and which ‘every public and private consideration demands that this should be removed’ was reluctantly dismissed by the President of the Lands Tribunal because the land which was the subject of the restriction, and the building to be erected thereon, had been donated for use ‘as the village hall and club’. A similar restrictive covenant relating to a village hall and club, which it was desired to sell free of the restriction in order to finance a larger facility elsewhere in the village to better serve the inhabitants was likewise more recently held by the Upper Tribunal to be outside the jurisdiction of the Tribunal under section 84(1) in Re Robins’ Application.123 It should be noted that purposes which are ‘public purposes’ within subsection (7) are not necessarily charitable purposes. If they are, though, then prima facie a restriction confining the use of land to particular charitable purposes could, where those purposes no longer serve any useful purpose, be modified or removed under a scheme approved by the Charity Commissioners under the Charities Acts. (2) Restrictions imposed by the Commissioners of Works under any statutory power for the protection of any Royal Park or Garden or to restrictions of a like character imposed upon the occasion of any enfranchisement effected before 1926 in any manor vested in Her Majesty in right of the Crown or the Duchy of Lancaster, nor (subject to subsection (11A) below124) to restrictions created or imposed: (a) for naval, military or air force purposes; (b) for civil aviation purposes under the powers of the Air Navigation Act 1920, or section 19 or 23 of the Civil Aviation Act 1949 or of section 30 or 41 of the Civil Aviation Act 1982. (All of which are excluded by section 84(11).) (3) Restrictions entered into by landowners with public bodies pursuant to any of the following statutory provisions: ●● the Town and Country Planning Act 1990, section 106(1) and (9)125 in relation to ‘planning obligations’ entered into on or after 25 October 1991;

122 (1962) 14 P&CR 234. 123 LP/17/2004. The Tribunal expressed the view in para 8 that in fact it did not appear to be enforceable anyway, though, because it did not appear to be annexed to any land of the grantors and as a purely personal covenant it would have ceased to be enforceable on the death of the last surviving grantor. 124 Under which the section is excluded only so long as the benefit of the restriction is (in the case of restrictions falling within sub-s (11)(a)) enforceable by or on behalf of the Crown or (in the case of restrictions falling within sub-s (11)(b)) enforceable by or on behalf of the Crown or any public or international authority. 125 See Chapter 10, footnote 27.

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What restrictions fall within scope of Tribunal’s jurisdiction? 16.49 ●● ●● ●● ●● ●● ●● ●● ●●

section 75(1) of the Mission and Pastoral Measure 2011 (excluded by section 75(3)); Green Belt (London and Home Counties) Act 1938, section 22(2); Requisitioned Land and War Works Act 1945, sections 33(1) and 38(3), as extended by section 13(c) of the Land Powers (Defence) Act 1958; Forestry Act 1967, section 5(1) and (2)(b); Leasehold Reform Act 1967, sections 29 and 30 and Schedule 4, para 1(5); Countryside Act 1968, section 15(4); Ancient Monuments and Archaeological Areas Act 1979, section 17(7)(a); National Trust Act 1939, section 5 (though not under section 8 of the National Trust Act 1937).126

16.48 It is clear, however,127 that the mere fact that a restriction is entered into by a landowner with a public body pursuant, or by reference, to an express statutory provision does not in itself exempt the restriction from the jurisdiction of the Upper Tribunal – only where there is a provision in the relevant Act expressly conferring such exemption is the jurisdiction excluded. The most common are restrictive covenants entered into by a landowner with a local authority pursuant to section 106 of the Town and Country Planning Act 1990 (or to its predecessor provisions128) before 25 October 1991. However, there being no exempting provision, these restrictions are subject to the jurisdiction of the Upper Tribunal.129 However, where the covenant, though not within any of the provisions excluding the jurisdiction to discharge or modify under section 84(1), is taken for public benefit, the Upper Tribunal could still take that into account in deciding whether in the exercise of its discretion to in fact discharge or modify it.130

Identification of the restriction 16.49 In order to invoke the jurisdiction provided by of section 84(1), the restriction of which discharge or modification is sought, must be identified. Thus, in Re Corderoy’s Application,131 it was established that in 1927 certain land was conveyed ‘subject to any existing covenants and restrictions relating

126 See Gee v National Trust for Places of Historic Interest or Natural Beauty [1966] 1 WLR 170. 127 From the fact that where, in any particular Act, the legislature wishes to exclude such restrictions from the application of s 84, it says so expressly as in the Acts referred to above. In such cases, the language of exclusion usually extends also to the quite separate jurisdiction conferred on the court by s 84(2), but such exclusion is negatived (unless the language of exclusion is specific to s 84(2)) by s 84(2) as amended. 128 Section 52 of the Town and Country Planning Act 1971 and s 37 of the Town and Country Planning Act 1962 (para 10.7 above). 129 For other statutory provisions providing for landowners’ covenants but conferring no exemption, see para 10.13(8) above. 130 As indicated at p 538 of Re St Albans Investments Ltd’s Application (1958) 9 P&CR 536, it would have done to refuse modification even if it had it been satisfied one of the grounds in s 84(1)(a) or (c) for such modification had been made out. 131 (1956) 7 P&CR 251.

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16.50  Modification and discharge pursuant to LPA 1925, s 84(1) to the Barton Court Estate which may be enforceable against the vendor’, but there was no evidence as to the existence or contents of any such covenants or restrictions. Although the Tribunal found that the building of a bungalow on the land would not injure anybody, it nevertheless held that the Tribunal could only modify a restriction if the nature of that restriction was clearly set out before it and, this not being the case, the application was dismissed. No doubt the position would be the same in the case of land being expressed to be subject to restrictions contained in an instrument no copy or particulars of the contents of which were available.132 However, the ‘best evidence’ rule for proving the contents of the instrument which is alleged to have imposed the restriction is substantially relaxed by section 84(6) which confers a wide discretion on the Upper Tribunal to act on such evidence of that instrument as it may think ‘sufficient’.

THE UPPER TRIBUNAL’S POWERS 16.50

Section 84(1) provides that:

‘The Upper Tribunal shall (without prejudice to any concurrent jurisdiction of the court) have power from time to time … by order wholly or partially to discharge or modify any restriction on being satisfied’ as to one of the four sets of circumstances lettered (a), (aa), (b) and (c).’

The Upper Tribunal’s powers are additional to any concurrent powers exercisable by the courts 16.51 The words ‘without prejudice to any concurrent jurisdiction of the court’ recognise there is a certain overlap between the statutory jurisdiction of the Upper Tribunal and the jurisdiction of the court, both inherent and statutory. 16.52 First, there are a very limited number of statutory provisions giving limited power to the county court to vary the terms of a covenant or agreement to enable a building to be used in a way which furthered the purposes of the Act in question. When section 84 first came into operation these included section 102 of the Housing Act 1925 and section 8 of the Celluloid and Cinematograph Film Act 1922. The powers conferred on the county court by what was section 102 of the Housing Act 1925 still exist, now being contained (with some changes) in section 610 of the Housing Act 1985, which gives the county court power to authorise the conversion of a house into flats. In relation to that overlapping jurisdiction, see para 15.31 et seq above. Further powers facilitating the purposes of the particular Act containing them were added, for example, by section 3 of the Landlord and Tenant Act 1927 which remains in force. 16.53 Second, certain of the grounds in section 84(1), which give rise to the Upper Tribunal’s jurisdiction to modify or discharge a restriction, could equally be the basis for a claim before the court, in the exercise of its inherent jurisdiction, to grant a declaration that a restriction no longer applies – because it is obsolete for example, or has been expressly or impliedly released.133 132 For example, under a building scheme. Cf Faruqui v English Real Estates Ltd [1979] 1 WLR 963. 133 See, eg Duke of Bedford v British Museum Trustees (1822) 2 My & K 552; German v Chapman (1877) 7 ChD 271; Knight v Simmonds [1896] 2 Ch 294; Sobey v Sainsbury [1913] 2 Ch 513;

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The Upper Tribunal’s powers 16.55 In Turner v Pryce,134 Mr Stephen Smith QC, sitting as a deputy High Court Judge, acknowledged that the court has the power to rule that a covenant has ceased to be enforceable through obsolescence. However, he added that ‘a Court should exercise the power only in a very clear case’, section 84 of the Law of Property Act 1925 suggesting that Parliament had envisaged the Tribunal to be the primary forum for determining issues such as obsolescence. Whether it would be advantageous in any particular case of overlap to apply to the court rather than to the Upper Tribunal will depend upon the circumstances. 16.54 As with the Upper Tribunal, the power of the court, if the specified circumstances exist, is permissive and accordingly its exercise is a matter of judicial discretion. The provisions of section 3 of the Landlord and Tenant Act 1927 and of section 610 of the Housing Act 1985135 appear especially useful and straightforward in the circumstances to which they apply and it is somewhat surprising that they are not more frequently used.136 However, because they are so little used, there may be considered greater uncertainty as to the likely outcome of an application before the court than an application before the Upper Tribunal with its specialist members and fund of reported past decisions. See further, in relation to section 610, para 15.31 et seq above. However, in considering whether ‘owing to changes in the character of the neighbourhood in which the house is situated, it cannot readily be let as a single tenement but could readily be let for occupation if converted into two or more tenements’ for the purposes of section 610(1)(a) of the Housing Act 1985, the cases dealing with that situation decided by the Tribunal under section 84(1)(a) would be likely to be strongly persuasive to the court. In any proceedings taken to enforce a restrictive covenant, the person against whom the proceedings are taken, may apply to the court for an order staying the proceedings pending the determination of an application under section 84(1) to the Upper Tribunal. This is provided for by section 84(9), as to which, see above, Chapter 13, para 13.172 et seq. 16.55 Similarly, if an application under section 84(1) has been made to the Upper Tribunal, where issues arise which are appropriate for the court’s determination under section 84(2) the Tribunal may suspend the section 84(1) proceedings before it, pending the determination of those matters by the court on an application for a declaration under section 84(2). As to this, see paras 24.33–24.37 below.137

134 135 136

137

Iveagh v Harris [1929] 2 Ch 142, and other cases considered in Chapter 13; see also Re Coldman’s Application [2012] UKUT 6 (LC). [2008] 1 P&CR DG 20. Set out at para 15.31 above. As to s 3 of the Landlord and Tenant Act 1927, see Deerfield Travel Services Ltd v Wardens and Society of the Mystery or Art of the Leathersellers of the City of London (1982) 46 P&CR 132, CA (turning on the ‘notice’ requirements of the section) and as to s 610 of the Housing Act 1985, see Alliance Economic Investment Co v Berton (1923) 92 LJKB 750 (turning on provisions of s 27 of the Housing and Town Planning Act 1919 which correspond to s 610(1) (a) of the 1985 Act). Where, however, it is appropriate to do so, the Tribunal can itself rule on issues that arise in order to proceed with an application, such as whether the covenant on its true construction is a restrictive covenant, or whether it is enforceable by the applicant before it, as it would need to be to invoke the s 84(1) jurisdiction – see, eg Re Woodhouse [2010] UKUT 235 LC.

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16.56  Modification and discharge pursuant to LPA 1925, s 84(1)

The discretionary nature of the Upper Tribunal’s power 16.56 Before the Upper Tribunal’s jurisdiction can arise, it must be satisfied as to the existence of one or other of the four sets of circumstances set out in section 84(1)(a), (aa), (b) or (c).Beyond this, it has no discretionary power to discharge or modify restrictions.138 Where the Upper Tribunal is satisfied as to one or more of those four sets of circumstances, the words ‘have power’ mean that the jurisdiction thereby established is permissive and not mandatory and that the Tribunal has a general discretion as to its exercise. This was said to be the position by all three members of the Court of Appeal in Driscoll v Church Commissioners for England,139 and was endorsed by Lord Evershed MR in Re Ghey and Galton’s Application.140 It has been acted upon without question ever since. 16.57 The Court of Appeal in Re University of Westminster’s Application,141 stated, however, per curiam, that: ‘… the discretion can only be exercised in respect of the order which the Tribunal has jurisdiction to make. So, if the finding under ground (aa) is that reasonable user will be impeded unless the restriction is wholly discharged, there is no jurisdiction to order modification; and the Tribunal cannot, as an exercise of discretion, order modification in lieu of discharge. It is only where there is jurisdiction to order both discharge and modification – where, for example, on a proper understanding of the facts, the persons of full age and capacity have agreed to whichever order the Tribunal thinks fit to make – that the Tribunal will have a discretion to choose between discharge and modification.’ 16.58 In addition to (or as part of) the exercise of discretion where one of the paragraphs in section 84(1) is established, section 84(1C)142 declares the existence of an ancillary discretion which entitles the Upper Tribunal, as a condition of modifying a restriction, to add such further restrictions on user or building as appear to the Tribunal to be reasonable and as may be accepted by the applicant. The position is accordingly as follows: (1) if the applicant fails to satisfy the Tribunal as to the existence of any of the four sets of circumstances lettered (a), (aa), (b) and (c) in subsection (1), the Tribunal must dismiss the application;143

138 Re Henderson’s Conveyance [1940] Ch 835 (Farwell J); Re Ghey and Galton’s Application [1957] 2 QB 650, CA. 139 [1957] 1 QB 330. It was argued in this case that once jursidiction had been established, the Tribunal had a duty to modify the restriction in some way and that the only discretion it had was as to the precise nature of the modification to be made. But whilst upholding the decision of the Tribunal on the absence of jurisidiction, all three Lords Justices expressed the view that even if there had been jursidiction, the Tribunal could still, as a matter of discretion, have dismissed the application. 140 [1957] 2 QB 650, at p 660. 141 (1999) 78 P&CR 82, at p 92. 142 Added by the Law of Property Act 1969, s 28(1) and Sch 3. 143 In Re Ghey and Galton’s Application [1957] 2 QB 650, the Court of Appeal reversed a decision of the President of the Lands Tribunal (who had made an order modifying a covenant so as

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The Upper Tribunal’s powers 16.61 (2) if the applicant satisfies the Tribunal as to one or more of those sets of circumstances, then the Tribunal must, before deciding, as a matter of discretion, whether to grant or dismiss the application, take into account the specific and other circumstances referred to in section 84(1B); (3) if, having taken into account the circumstances referred to in section 84(1B), the Tribunal decides, in the exercise of its discretion, to make an order for the modification of the restriction, then it has an ancillary discretion to decide whether to make such order dependent upon the applicant accepting the addition of such further provisions restricting the user of or the building on the land as appear to the Tribunal to be reasonable in view of the relaxation of the existing provisions; (4) if the Tribunal decides to make an order for the modification or discharge of the restriction, then it has a further discretion whether to award compensation.144 This is considered in Chapter 23.

The exercise of the discretion 16.59 As with any discretion vested in a judicial body, the discretion must be exercised judicially. If it is not so exercised, it will be flawed and susceptible to review on appeal to the Court of Appeal ‘according to well-known principles’.145 16.60 The requirements which this imposes on the Upper Tribunal appear from the authorities to include the following: (1) It must positively appear that the Tribunal is aware of the existence of the discretion and the need to exercise it one way or the other. Since the decision of the Court of Appeal in Driscoll v Church Comrs for England146 there would appear little or no likelihood of this requirement not being met. (2) The discretion must be exercised as such and not involve decision-making which flows slavishly from the mere existence of one or more specific factors. 16.61

This is inherent in the very nature of a discretionary power.

Certain observations of Harman and Danckwerts LJJ in Cresswell v Proctor147, might be interpreted as indicating that, in the case of a recently entered into covenant, the discretion should automatically be exercised against the applicant.

to permit the owner of the land personally to depart from its terms) on the ground that the Tribunal’s findings of fact did not establish any of the s 84(1) grounds and that the Tribunal therefore had no jurisdiction to make the order. 144 See Re Bennett’s and Tamarlin’s Ltd’s Applications (1987) 54 P&CR 378, 385 (VG Wellings QC). 145 Per Ormrod LJ in Jones v Rhys-Jones (1974) 30 P&CR 451 at 461. As to these, see further para 24.109 et seq below. 146 [1957] 1 QB 330. 147 [1968] 1 WLR 906, at 914, Harman LJ found ‘… the idea that you can modify a covenant, voluntarily entered into, within a year or so, without any change in circumstances of the property at all … shocking’. Danckwerts LJ said of such a case that in his opinion it ‘was not within the true intention of s 84 and sanction should not be given in the exercise of the discretion which the tribunal undoubtedly possesses under the section’.

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16.62  Modification and discharge pursuant to LPA 1925, s 84(1) However, in the later case of Jones v Rhys-Jones,148 Ormrod LJ pointed out that the discretion is that of the Tribunal and that the Court of Appeal ‘cannot, or certainly ought not to, fetter this discretion in any way’. Stephenson LJ took the view149 that ‘At most the majority [in Cresswell v Proctor] were laying down a guide-line to the effect that the tribunal should be slow to modify a very recent covenant at the suit of the original covenantor, and it is erroneous in law to confer on that guideline the style and dignity of a general principle which precludes the tribunal from considering all the circumstances of the application before exercising the statutory discretion.’150 Further, in Re University of Westminster’s Application151 the President of the Tribunal said: ‘… there is nothing in the statutory provisions to indicate that the Tribunal’s discretion is limited or (as the applicants would appear to suggest) abrogated, by reason of the fact that the application is unopposed. Doubtless the information available to the Tribunal in the case of an unopposed application is likely to be less than in a case fought out at a hearing, but the Tribunal is still under a duty to exercise its discretion to grant or refuse a discharge or modification in whole or in part in the light of known relevant circumstances.’ The case subsequently went to the Court of Appeal,152 as referred to in para 20.16 below, but nothing said there casts doubt upon this statement of principle. (3) The exercise of the discretion must not have been influenced by an imagined but not a real factor. 16.62 In Jones v Rhys-Jones153 the Tribunal (without considering whether a case had been made out establishing jurisdiction) dismissed an application on one short ground, namely that the applicants had only recently (in fact two years prior to the date of the application) purchased the land by a conveyance dated 14 April 1970 under which the land was conveyed to them ‘subject to the stipulations and restrictions contained in the conveyance [dated 18 December 1961] so far as the same affect the property hereby conveyed and are still subsisting and capable of being enforced’ and that the Tribunal did ‘not think it right that purchasers should agree to be bound by a covenant and then seek to modify it within a matters of months.’154 On appeal, the Court of Appeal held155 that a purchaser who recently purchased land expressly subject to existing covenants was not in the same position as a purchaser who had himself recently entered into covenants and that, accordingly, the observations of Harman and Danckwerts LJJ in Cresswell v Proctor (as to the significance of the

148 (1974) 30 P&CR 451, at 461. 149 Ibid, at 457. 150 Stephenson LJ, ibid, at 458, also referred to certain observations of Russell LJ and Harman LJ in Ridley v Taylor but not those to which reference is made in the text above. 151 (1997) 74 P&CR 86, at p 91 (HH Judge Marder QC). 152 (1999) 78 P&CR 82. 153 (1974) 30 P&CR 451. 154 See, ibid, at 455. 155 Applying the Court of Appeal’s decision in Re Wickin’s Application (1962) 183 Estates Gazette 541 – a decision which had not been brought to the attention of the Tribunal.

476

The Upper Tribunal’s powers 16.63 application being made by an applicant who had only recently entered into the covenants),156 which had been applied by the Tribunal, had no application.157 Another example of the consequences of the Tribunal acting on a false premise (although in the context of jurisdiction and not discretion) is provided by Ridley v Taylor158 where it had been assumed (wrongly) by those appearing before the Tribunal that the modification asked for, and permitted by the Tribunal’s order, would continue to attract payment of an extra rental of £200 to the objector landlord whereas in fact the consequence of the Tribunal’s order was that this payment would be reduced to £35. Harman LJ159 took the view that this amounted to an ‘injury’ to the landlord so as to invalidate the findings of the Tribunal to the contrary. (4) The exercise of the discretion must take into account all relevant factors and not take into account irrelevant factors. 16.63 Prior to the change in the law effected in 1970,160 it was not incumbent upon the applicant (or any objector) to plead or adduce evidence as to factors which related only to the question as to how the Tribunal might exercise its discretion. Until then, if a case under one of the four heads was made out (so that jurisdiction was established) and no such facts (either way) were before the Tribunal then there appears to have been a presumption in favour of the discretion being exercised in favour of granting of the application. Thus, in Re Taylor’s Application,161 the Tribunal, having considered the factors urged for a negative exercise of the discretion (including the ‘thin edge of the wedge’ argument), the Tribunal concluded ‘that in the circumstances there are no reasons why I should not exercise my discretion in favour of the applicant’, and although, this decision was reversed on appeal,162 Russell LJ found no fault in the Lands Tribunal having approached the question of the exercise of its discretion by asking why, having jurisdiction, it should not exercise it.163 The same approach was adopted by the Tribunal in Re Goldsmith’s Application164 where the Tribunal, having found a case made out under paragraph 156 Considered below at para 16.83 et seq. 157 The result was that the case was remitted to the Tribunal for reconsideration in the light of the Court of Appeal’s judgments. Since the Tribunal had not indicated whether it had found that a case had been made out to establish jurisdiction, there was clearly no alternative but for the case to be remitted.In relation to the question of remission to the Tribunal in such circumstances, see further para 24.109 below. 158 [1965] 1 WLR 611. 159 Ibid, at p 618H, in whose judgment Diplock LJ concurred. Russell LJ also referred to this false assumption at p 623C–D, without expressing a view as to its consequences. 160 By the addition to s 84(1) of sub-s (1B) by the Law of Property Act 1969, s 28(1) and Sch 3. 161 (1964) 16 P&CR 169, at 176 (Erskine Simes QC). 162 In Ridley v Taylor [1965] 1 WLR 611, at 623. 163 In fact, both Russell and Harman LJJ (in whose judgments Diplock LJ concurred), found that there was a reason why the discretion should not have been exercised (by the granting of the application) namely, by analogy to s 84(12) (considered below), and since the Tribunal had not directed its mind to this reason (although the necessary material concerning it was before it), the Court of Appeal held that the discretion had been wrongly exercised. The implication is that the Court of Appeal considered that had this factor been in the mind of the Tribunal then it would inevitably have exercised its discretion the other way; otherwise the appropriate course would appear to have been for the case to have been remitted to the Tribunal for it to reconsider such exercise in the light of that factor. See, further, below at para 16.81. 164 (1961) 13 P&CR 209, at 211 (Sir Wm Fitzgerald QC).

477

16.64  Modification and discharge pursuant to LPA 1925, s 84(1) (c), continued: ‘the question now arises – is there any reason why I should not exercise the power given to me by the section and modify these covenants?’. 16.64 Further, in Gee v National Trust for Places of Historic Interest and Natural Beauty,165 the Court of Appeal were unanimous in holding that where the Tribunal purported to exercise its discretion negatively on grounds which were either irrelevant or not supported by any evidence, then the appeal should be allowed by granting the application. It is necessarily implicit in this result that if the discretion is not effectively exercised, then there is a presumption in favour of granting the application; in the absence of such a presumption, then since the Court of Appeal cannot itself exercise the discretion which is statutorily vested in the Tribunal, the case would have had to have been remitted for final decision to the Tribunal. That this was the approach made in that case is borne out by the conclusion arrived at by Salmon LJ:166 ‘Therefore we have a case in which the applicant brings himself fairly and squarely within section 84(1)(c) of the Law of Property Act, 1925, and there are no grounds for exercising discretion so as to deprive him of the relief for which he asks under that section and to which he is prima facie entitled’. Again, in Re Hornsby’s Application,167 the Tribunal, having found a case made out under (what was then) the second limb of paragraph (a) and also under paragraph (c), continued: ‘Having got so far I can see no reason why I should not exercise my discretion to grant the application.’ 16.65 The effect of this presumption168 was that, prior to 1970, the Tribunal was not precluded from exercising its discretion by granting the application merely because no evidence had been placed before it showing why the discretion should be so exercised.169 It is also the case that prior to 1970, guidance as to what factors (when introduced) were relevant to the exercise of the discretion was based exclusively on certain decisions of the Court of Appeal.170 However, the amendments to the law introduced by the Law of Property Act 1969171 altered the position in both these respects. With effect from 1 January 1970, section 84(1B)172 provides (so far as material to the present discussion): ‘… in determining whether … a restriction ought to be discharged or modified, the Upper Tribunal shall take into account the development plan

165 166 167 168

[1966] 1 WLR 170. Ibid, at p 178E. (1968) 20 P&CR 495, at 503 (JS Daniel QC). In addition to its effect in allowing the Court of Appeal to grant an application which the Lands Tribunal had dismissed on grounds which were not germane to the negative exercise of its discretion, without remitting the case to the Lands Tribunal for decision. 169 Although it would certainly have been wise for the applicant to have supported his case by any such evidence as he could produce in case there should be factors pointing to a negative exercise of the discretion. It is, of course, clear from Ridley v Taylor [1965] 1 WLR 611, that it was, and remains, essential for the Tribunal to direct its mind to such relevant factors as are before it in order to determine whether there is any reason for not exercising its discretion in favour of the applicant. 170 Namely, Ridley v Taylor [1965] 1 WLR 611; Gee v National Trust for Places of Historic Interest or Natural Beauty [1966] 1 WLR 170; Cresswell v Proctor [1968] 1 WLR 906; Re Wickin’s Application (1962) 183 Estates Gazette 541, and Jones v Rhys-Jones (1974) 30 P&CR 451. 171 Section 28(1) and Sch 3. 172 Added by the Law of Property Act 1969, s 28(1), Sch 3.

478

The Upper Tribunal’s powers 16.67 and any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas, as well as the period at which and the context in which the restriction was created or imposed and any other material circumstances.’ This subsection adds two planning factors as relevant (which previously were not considered to be relevant173), namely the development plan and any pattern for the grant or refusal of planning permissions in the relevant areas) as well as making specific mention of two other factors, namely the period and context of the creation of the restriction, from amongst those previously considered to be relevant. 16.66 But apart from this extension of relevant factors, the subsection would not appear to have affect the approach previously adopted by the Tribunal in asking itself whether any of these factors provides a reason for not exercising the discretion in favour of the applicant. In line with this, in Re University of Westminster’s Application174 the Court of Appeal held that: ‘A finding of fact that one or more of the statutory grounds exists is likely, of itself and without more, to provide a good reason or reasons for making an order-particularly in a case falling within grounds (a) or (aa). If there is a good reason for making an order then, in the absence of some reason to the contrary, an order ought to be made in the proper exercise of the Tribunal’s discretion. This is not to recognise some presumption or legitimate expectation. It is simply to recognise that the exercise of a discretion requires a weighing of reasons for and against the course proposed; and that if there are good reasons for the course proposed and no reason against it then a proper exercise of discretion will lead to that course being adopted; I do not, myself, find anything in the decision of this court in Gee v The National Trust [1966] 1 WLR. 170, or in the other cases to which we were referred, which is inconsistent with that analysis.’ 16.67 So far as the two planning factors added by the subsection as relevant, namely the development plan and any pattern for the grant or refusal of planning permissions in the relevant areas, the requirement of the subsection is merely for the Tribunal to ‘take into account’ these factors in determining ‘whether … a restriction ought to be discharged or modified’ and this is consistent with its doing so for the purpose of seeing whether, in the light of those factors, it should not grant the application. 173 Except under the former paragraph (a) of s 84(1). Cf Re Allnatt (London) Ltd’s Application (1959) 12 P&CR 256, where the Tribunal had regard to the policy of the local planning authority (endorsed by the minister on a planning appeal by the applicant) to refuse planning permission for industrial development (permitted by the covenant) and modified the covenant so as to permit residential development (prohibited by the covenant). The policy of the planning authority was considered (under the former ‘second limb’ provisions of paragraph (a)) to fall under ‘other circumstances’. Under the new paragraphs (a) and (aa), ‘other circumstances’ are now only relevant to what was previously the first limb of the old paragraph (a) (ie the ‘obsolete’ provision). By contrast, in Re Shaw’s Application (1966) 18 P&CR 144, the Tribunal (JF Laird FRICS) refused a modification to permit a higher density of housing on land forming part of the Cressington Park Estate in Liverpool notwithstanding that the planning authority had refused planning permission for housing at the permitted level on the ground that it was contrary to their policy which was to grant permission only at a higher density. In this case, however, there had been no appeal to the minister against the refusal of planning permission. 174 (1999) 78 P&CR 82.

479

16.68  Modification and discharge pursuant to LPA 1925, s 84(1) 16.68 However, section 84(1B) provides that before exercising its discretion, the Tribunal ‘shall take into account’175 each of the factors referred to in the subsection. These are: (a) ‘the development plan’; (b) ‘any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas’; (c) ‘the period at which … the restriction was created or imposed’; (d) ‘the … context in which the restriction was created or imposed’, and then a catch-all of: (e) ‘any other material circumstances’. The wording of the subsection (‘… the Upper Tribunal shall take into account …’), means that information and evidence as to the specific matters at (a) to (d) should be put before the Tribunal before it exercises its discretion, or the lack of information and evidence as to them explained. 16.69 Every applicant should therefore be concerned to see that information and evidence as to these matters is placed before the Tribunal - or that its absence is adequately explained.176 In the absence of the parties themselves initially providing details of the matters lettered (a), (b), (c) and (d), the Tribunal may take steps to see that evidence thereof is placed before it in order to enable it to exercise its discretion.177 16.70 Evidence as to ‘any other material circumstances’ is (subject to any pleading requirements and to the rules of evidence), as before, entirely at the discretion of the parties. If any such matters are established by the evidence then the Tribunal is bound to take them into account, but the absence of evidence as to any such ‘other’ matters will not prevent the Tribunal from adjudicating upon the application. However, other material circumstances which it is necessary or relevant to take into account may be apparent from the nature of the case – for example, where the application relates to leasehold land, whether the covenants have been

175 Compare the wording of s 70(2) of the Town and Country Planning Act 1990 which provides that in dealing with an application for planning permission a local planning authority ‘shall have regard to the provisions of the development plan, so far as material to the application, and to any other material considerations’. The word ‘shall’ imposes a mandatory obligation. Contrast s 54A (footnote 175 below). 176 The form for making an application to the Upper Tribunal under s 84(1) (Form T379) requires certain details to be given In it, including details of any planning permissions granted or refused in relation to the application land in the preceding five years A statement of case is required to be submitted with it providing details and evidence of all the facts relied upon to establish each of the grounds relied on for the discharge of the restriction(s) and the reasons for considering that the ground(s) relied on apply. Where evidence of any relevant matters is not available, this should be indicated. 177 Rule 38 of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2011 (SI 2010/2600) confers power on the Tribunal to direct that enquiries be made of any relevant local authority and r 5 provides general case management powers. More generally, s 84(3) provides that: ‘The Upper Tribunal shall, before making any order under this section, direct such enquiries, if any, to be made of any government department or local authority … as … the Upper Tribunal may think fit’.

480

The Upper Tribunal’s powers 16.72 reaffirmed within 25 years before the application: See Ridley v Taylor at 16.62 above (the jurisdiction under section 84(1) only arising in leasehold cases when 25 years of the term has expired178).

Relevant factors (a)  ‘The development plan’ 16.71 ‘Development plan’ is not defined in the Law of Property Act 1925, but it seems clear from the context in which these words appear that it is intended to refer to what is known in planning terms as the ‘development plan’, which, following the Planning and Compulsory Purchase Act 2004, now (in the ‘local development plan framework’) comprises the relevant planning authority’s ‘development plan documents’ forming part of a ‘local development scheme’.179 In general terms, these documents together set out the official views of the local planning authority as to the primary use to which any particular land in the authority’s area is, or is earmarked to be, put, and the policies of the authority which apply to development in the area.180 16.72 By virtue of section 84(1B) of the Law of Property Act, 1925, the documents constituting the development plan are able – and required – to be introduced as evidence in their own right and without calling any planning officer to prove or explain them. But only a development plan which qualifies as such in the sense of having passed through all the stages from initial publication as a draft plan to final adoption is admissible as a development plan as such.181

178 See para 16.12 above. 179 Previously there were a set of structure plans and local plans, or unitary plans, and some of the policies within these have been ‘saved’ by particular local authorities pending the production of a complete set of the new style ‘development planning documents’. 180 In relation to the determination by planning authorities of planning applications, s 38(6) of the Planning & Compulsory Purchase Act 2004 provides that regard must be had to the development plan and the determination must be made in accordance with the plan unless material considerations indicate otherwise. Prior to the Introduction of s 54A of the Town and Country Planning Act 1990 by s 26 of the Planning and Compensation Act 1961, the local planning authority was (under s 70(2) of the 1990 Act and its predecessor provisions) merely required to ‘have regard to the provisions of the development plan, so far as material to the application, and to any other material considerations’. However, by s 74(1)(b) of the 1990 Act, the local planning authority can, in such cases and subject to such conditions as are prescribed by a development order or by directions given by the Secretary of State thereunder, grant planning permission for development which does not accord with the provisions of the development plan. Pursuant to this, procedures are laid down which are required to be followed where an application is to be approved contrary to the development plan (see the Town and Country Planning (Consultation) (England) Direction 2009). 181 This follows the decision of the Tribunal in Re Collins’ Application (1974) 30 P&CR 527 (Douglas Frank QC) with suitable adaptation (the plan is no longer required to be approved by the Secretary of State but can only be adopted after independent examination – see s 20 of the 2004 Act. However, depending on what stage it has reached In terms of consultation and the necessary process towards adoption, a draft plan document may nontheless be regarded as ‘material circumstance’ and so be admissible as such: see Re Mansfield District Council’s Application (1976) 33 P&CR 141, at p 145, considered further below at para 16.81.

481

16.73  Modification and discharge pursuant to LPA 1925, s 84(1) The duty is to have regard to the development plan (and to any pattern for the grant or refusal of planning permissions in the relevant area) but it is just one of the circumstances to be taken into account. Inevitably, the weight (if any) to be attached by the Upper Tribunal to the development plan in deciding how to exercise its discretion will depend on the circumstances but it may be supposed (in the absence of any clear judicial guidelines) that the logic underlying section 84(1B) is that in general, the closer the proposed development (for which the Tribunal’s order is required) accords with the development plan, the more the Tribunal will incline182 towards exercising its discretion positively, and conversely where the proposed development and the development plan are out of accord. 16.73 In Re Mansfield District Council’s Application,183 the President of the Tribunal, whilst deciding that the application for the total discharge of a restrictive covenant (not to erect any buildings except for the purposes of a cattle market) entered into in 1876, failed under all three of the grounds of section 84(1) relied upon, added that he would in any event not have exercised his discretion in favour of the local authority applicant since the authority’s proposed use of the land as a leisure centre, for which they had planning permission granted by themselves,184 was in conflict with a material document relevant to the development plan.185 On the other hand, in Re Beecham Group Ltd’s Application,186 the Tribunal attached importance to the grant of planning permission on appeal by the Secretary of State for the development of the application land notwithstanding that it was in conflict with the stated policy of the area town maps and county draft structure plan.

(b) ‘Any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas’ 16.74 This does not relate primarily to the existence or otherwise of planning permission to develop the application site,187 but to the pattern, if any, of the grant or refusal of planning permissions in the surrounding area. Presumably a ‘declared’ pattern is one so declared by the planning authority thus providing a blueprint for the treatment of future planning applications, whilst an ‘ascertainable’ pattern is one which has emerged from what has actually taken place on the planning permission front. There is no indication as to the form in which any pattern is to be ‘declared’ or such declaration proved; presumably the ordinary rules of evidence apply so that

182 But, of course, in no sense be bound. 183 (1976) 33 P&CR 141, at 146. 184 As to the current position concerning applications for planning permission for the development of land in which the local planning authority is interested, see the Town and Country Planning Act 1990, s 316 (as substituted by s 20 of the Planning and Compensation Act 1991) and regulations made thereunder. 185 Ibid, p 145. 186 (1980) 41 P&CR 369. 187 As to which, see para 16.112 below. See the observations of Eveleigh LJ in Gilbert v Spoor (1982) 44 P&CR 239, 245.

482

The Upper Tribunal’s powers 16.76 any relevant documents such as planning permissions would be proved in the appropriate way and oral declarations proved by calling an appropriate official of the planning authority.188 An ‘ascertainable’ pattern would be established by proving the appropriate permissions or refusals.189 16.75 In Re Gossip’s Application,190 the Tribunal, in dismissing an application, referred to the fact that ‘no evidence was adduced that any declared or ascertainable pattern for the grant or refusal of planning permissions … was in conflict with the original “lotting” building density’, the implication being that if such a conflict had been shown, the application might have been granted.191 The requirement that such a pattern is to be taken into account suggests that an applicant ought to be regarded as more deserving of the exercise of the Tribunal’s dispensing power and the objectors’ less deserving of the Tribunal’s restraint, where it is shown that the applicant’s personal aspirations for development are in harmony with the planning policies of the local planning authority – and vice versa. The implied premise seems to be that in the exercise of their power to grant or withhold planning permission, the local planning authority are here (as with planning agreements192) custodians of the public good and that if the applicant’s proposals fit in with the pattern which results from that custodianship, then this ought to count in his favour – and conversely where the proposals run counter to the pattern. 16.76 The Tribunal is relieved from being concerned with the merits of the planning authority’s policies.193 Its task is confined to ascertaining them – and then taking them into account on the basis suggested above. This fits in with the pre-1970 remarks of Lord Evershed in Re Ghey and Galton’s Application194 that ‘The tribunal is not asked to say what the tribunal thinks would be advantageous from one point of view or another to the neighbours. The tribunal is not asked to act as a kind of planning authority; …’. Following the 1970 amendments, in Re Collins’ Application,195 the President of the Tribunal said: ‘… it would seem most inappropriate for a hearing under this jurisdiction before the Lands Tribunal to become something in the nature of a town planning inquiry’. However, having ascertained the planning authority’s policies and taken them into account, it is then for the Tribunal to decide how much weight, if any, is to be attached to them when finally exercising its discretion.196

188 See Re Collins’ Application (1974) 30 P&CR 527 (LT); Re Cox’s Application (1985) 51 P&CR 335, at 339 (LT) and Re Beecham Group Ltd’s Application (1980) 41 P&CR 369, at 376. 189 Copies of planning permissions and refusals would no doubt usually be agreed documents. 190 (1972) 25 P&CR 215, at 220. 191 It is considered that the pre-1970 decision in Re Shaw’s Application (1966) 18 P&CR 144 would now be unlikely to be followed if the only issue were that of discretion. See footnote 169, above. 192 As to which, see Chapter 32. 193 See Re Cox’s Application (1985) 51 P&CR 335. 194 [1957] 2 QB 650, at 662. 195 (1974) 30 P&CR 527, at 531 (Douglas Frank QC). 196 See Re Herman’s Application (1970) 23 P&CR 102, where the President of the Tribunal (Sir Michael Rowe QC) said at p 108: ‘It was common ground that the Tribunal is not bound to follow the local planning authority’s decisions though it must consider them’.

483

16.77  Modification and discharge pursuant to LPA 1925, s 84(1)

(c) ‘As well as the period at which … the restriction was created or imposed’ 16.77

Two observations may be made concerning these words:

(1) the word ‘period’ would appear to be a reference to the ‘times’ or conditions which prevailed at the date the covenant was entered into (rather than the period of time which has elapsed since that date);197 (2) the words ‘as well as’ appear to require the Tribunal to consider those conditions alongside the development plan and the planning permission pattern previously referred to, considering the respects, if any, in which the current planning scene puts a different complexion on the conditions which obtained when the covenant was entered into. Two cases have a bearing on this matter. 16.78 In Re Collins’ Application,198 the above exercise was carried out in connection with establishing jurisdiction under section 84(1A)(b).199 Planning permission had been granted for the erection of 30 houses of which 20 would be built on 6.2 acres forming part of the Stockton House Estate at North Fleet in Hampshire. Under covenants affecting the estate, a total of only four houses was allowed on the 6.2 acres. The local plan (forming part of the development plan) provided for housing at a density of ‘not less than’ four to the acre. The Tribunal found no incompatibility between the designation in the local plan and the covenant regime since the former did not rule out housing development at a lower density than four to the acre and the application was rejected.200 16.79 In Re Mansfield District Council’s Application,201 an informal development plan and a restrictive covenant were in harmony in that the former indicated that a cattle market should be retained either on its existing site or elsewhere whilst the covenant restricted the land to markets and fairs generally and especially that of a cattle market. The Tribunal rejected an application for the total discharge of the covenant made by the applicant authority (which had granted itself planning permission to erect a leisure centre on the site) on the ground that a case for the exercise of the jurisdiction had not been made out. But the Tribunal added that in any event it would not have exercised its discretion in favour of the applicant since the informal development plan supported the use of the cattle market provided for by the covenant and conversely a leisure centre was inconsistent both with the plan and the covenant. Thus, even

197 198 199 200

As to the latter, see below at para 16.83. (1974) 30 P&CR 527 (LT). As to which, see further below, at para 20.54 et seq. The existence of the specific planning permission did not, of course, constitute a pattern for the grant or refusal of planning permissions in the locality, and no evidence appears to have been led as to any other planning permissions or any declared policy in regard to the surrounding area. The application was rejected as falling to satisfy the requirements of s 84(1A)(b) and therefore the consideration of the same matters in relation to the exercise of discretion did not arise. Whilst the existence of a specific planning permission may sometimes be a relevant factor, where the applicant for modification is the local authority which granted the permission then that significantly reduces its relevance: see Re Mansfield District Council’s Application (1976) 33 P&CR 141 at 146. In Re Quaffers Ltd’s Application (1988) 56 P&CR 142, the fact that planning permission for the proposed development had lapsed was treated by the Lands Tribunal as irrelevant. 201 (1976) 33 P&CR 141.

484

The Upper Tribunal’s powers 16.82 though proposed development (in the above case, a leisure centre) might be shown to be in the public interest for the purpose of establishing the power of the Tribunal to discharge or modify a covenant under section 84(1A)(b), its inconsistency with the development plan may lead the Tribunal to refuse to exercise its discretion.

(d) ‘As well as the … context in which the restriction was created or imposed’ 16.80 Reference has already been made above to the significance of the words ‘as well as’. As to the ‘context’, it is considered that the distinction between the ‘period’ of the covenant and the ‘context’ of the covenant is that the former would admit evidence of conditions and ideals which prevailed generally at the time of the covenant whilst the latter would admit evidence limited to the particular circumstances which were specific to the burdened and benefited land. Thus, as in Re Barclays Bank plc’s Application,202 evidence would be admissible as to the objectives which the covenant sought to achieve the realisation or continued realisation of which would then fall to be assessed having regard to other material circumstances.

(e)  ‘As well as … any other material circumstances’ 16.81 In Re Collins’ Application,203 the President of the Tribunal, Douglas Frank QC, accepted counsel’s argument that the words ‘any other material circumstances’ in section 84(1B), ‘must be construed ejusdem generis with the words immediately preceding it as far back only as the comma’ with the result that various planning documents, including documents foreshadowing changes in the approved204 development plan, were not admissible as ‘other material circumstances’. However, in his later decision in Re Mansfield District Council’s Application,205 Douglas Frank QC, without referring to his earlier decision, treated a town map representing an intended revision of the development plan but which did not at that stage form part of it, as ‘a very important material circumstances relevant to the development plan’, thus seemingly rejecting the above ejusdem generis construction. 16.82 It is suggested that the ejusdem generis rule does not apply at all since the preceding words ‘the period at which and context in which the restriction was created or imposed’ hardly constitute a genus, since the circumstances of the period and the circumstances of the context would appear to be unrelated except by time. Nevertheless, the words which follow the comma begin with the words ‘as well as’ and, as indicated above, this suggests that the matters

202 (1990) 60 P&CR 354, where the principal objective of restrictions contained in a ‘s 52 agreement’ were found not to be viable from their inception and the application for modification succeeded. See also Re Cox’s Application (1985) 51 P&CR 335. 203 (1974) 30 P&CR 527, at 531. 204 At that time, before a development plan operated as such, it had to be approved by the Secretary of State. Following the new system introduced by s 43 of the Town and Country Planning Act 1990, a development plan becomes operative when ‘adopted’ by the local planning authority in accordance with procedures laid down by the Development Plan Regulations. 205 (1976) 33 P&CR 141, at 143.

485

16.83  Modification and discharge pursuant to LPA 1925, s 84(1) which follow fall to be considered as a separate group in juxtaposition with the matters which precede those words. If this is correct, and the words ‘other material circumstances’ are at large, then any other material circumstances (including factors identified in pre-1970 cases as being relevant factors) could be so considered. On this basis, it is proposed to consider the additional relevant factors which have been identified by the Court of Appeal or the Tribunal (whether before 1970 or afterwards) as material (or immaterial) to the exercise of the Tribunal’s discretion.

Additional relevant factors (1)  The recency of the covenant Freehold land 16.83 In Cresswell v Proctor,206 where an application to the Tribunal was made by the original covenantors for the modification of a restrictive covenant entered into two years and one day prior to the application, Harman L] expressed the view that: ‘The idea that a covenant voluntarily entered into, can be modified within a year or so, without any change in circumstances of the property at all, is to me shocking’ and Danckwerts LJ said that in his view ‘such a case was not within the true intention of section 84 and sanction should not be given in the exercise of the discretion which the tribunal undoubtedly possesses under the section’. 16.84 On the other hand, in the earlier case of Ridley v Taylor,207 Russell LJ said: ‘I do not for myself think that the particular situation of the tenant, as having not very long since struck a bargain inconsistent with this particular outcome, is a factor in the exercise of discretion’.208 In that case, however, whilst the application was also one made by the original covenantor, some 14 years had elapsed between the date of the covenant and the making of the application. 16.85 Assuming that the recency of the covenant is a relevant factor, it now seems clear from Creswell v Proctor that it is, at any rate in relation to freehold land, none of the observations just cited are to be interpreted as meaning that recency of the covenant should automatically result in the discretion being exercised against the applicant. In Jones v Rhys-Jones,209 Ormrod LJ pointed out that the discretion is that of the Tribunal and not that of the Court of Appeal and that the Court of Appeal ‘cannot, or certainly ought not to, fetter this discretion in any way’. Stephenson LJ took the view210 that ‘At most the majority

206 [1968] 1 WLR 906, CA. 207 [1965] 1 WLR 611, CA. 208 In Jones v Rhys-Jones (1974) 30 P&CR 451, at 459, Stephenson LJ said: ‘Without the assistance of authority I would have thought that the shortness of the time which has elapsed since the burden of a covenant was imposed on an original covenantor or was transferred to a subsequent purchaser was a factor which could properly be put into the scale against modification or discharge whether the application under s 84 be made by an original covenantor (when it would weigh more) or by a subsequent purchaser (when it would weigh less). And after referring to the judgment in Re Wickin’s Application (1962) 183 Estates Gazette 541, the Lord Justice added: ‘It is enough for our purpose that according to that judgment the shortness of the time is not a decisive factor which forbids the grant of such an application …’. 209 (1974) 30 P&CR 451, at 461. 210 Ibid, at 457.

486

The Upper Tribunal’s powers 16.87 [in Cresswell v Proctor] were laying down a guideline to the effect that the tribunal should be slow to modify a very recent covenant at the suit of the original covenantor, and it is erroneous in law to confer on that guideline the style and dignity of a general principle which precludes the tribunal from considering all the circumstances of the application before exercising the statutory discretion’. 16.86 Further, as shown by the findings of the Tribunal in Re Quaffers Ltd’s Application,211 restrictive covenants may be obsolete when they are imposed and therefore justify prompt discharge notwithstanding that there has been no intervening change in the character of the neighbourhood.212 Similar considerations would seem to apply to an application under section 84(1)(aa) in the case of a restriction which, from its inception, did not secure any practical benefits to the covenantee.213 In Re Pearson’s Application214 the President of the Tribunal modified a covenant entered into some eight years previously, restricting alterations and confining use to that of a dwelling house, so as to enable an outbuilding to be converted and used as a residential home for old ladies. In the course of his decision, the President remarked: ‘But for the decision of the Court of Appeal in Jones v RhysJones,215 I might have adopted a stricter view and followed the observations of Harman LJ in Cresswell v Proctor.’216 In Re Towner’s and Goddard’s Application217 the same Tribunal had no hesitation in modifying a covenant against the placing of any erections on land, entered into some four and half years previously, so as to permit the erection of fences round two tennis courts to be made on the land. In Re Barclays Bank plc’s Application218 the same Tribunal modified restrictions entered into some 13 years previously, holding that they were not viable from their inception. 16.87 These cases may be contrasted with Re Brett’s Application,219 where the recency of a four-year-old covenant (entered into by the applicant’s predecessor in title) was considered relevant to the question of the exercise of the Tribunal’s discretion.

211 (1988) 56 P&CR 142. 212 Although in that case the covenants in question had been entered into at different times between some 15 and 28 years before the application. 213 For example, a covenant by the purchaser of an isolated farmhouse for the benefit of the covenantee’s surrounding farmland not to lay red carpets in the living rooms or (perhaps) not to make any changes to the internal layout of the rooms. See, also, Re Barclays Bank plc’s Application (1990) 60 P&CR 354. 214 (1978) 36 P&CR 285, at 294 (VG Wellings QC). In that case, the covenant was imposed in a voluntary conveyance executed in 1970 but presumably it was not made ‘for public purposes’ so as to invoke s 84(7). If it had been so made, the fact that the original donee/covenantor subsequently sold and conveyed the land to the applicant and that the conveyance on sale contained a covenant with the vendor (but not with the original covenantee) to perform and observe the covenant and for an indemnity for future breaches or non-observance, would not appear to have been material to the application of s 84(7). The only covenant to which the application related was, in any event, the covenant contained in the 1970 voluntary conveyance. 215 (1974) 30 P&CR 451. 216 [1968] 1 WLR 906. 217 (1989) 58 P&CR 316. 218 (1990) 60 P&CR 354. 219 (1965) 17 P&CR 49.

487

16.88  Modification and discharge pursuant to LPA 1925, s 84(1) In Re Barry’s Application,220 the fact that the restriction was ‘of recent origin’ (in fact eight and a half years old at the date of the hearing) was one of three reasons for the Tribunal doubting whether (if jurisdiction had been established) it would have exercised its discretion positively. In Re Beech’s Application221 where modification of a covenant by the applicants not to use a building other than as a private residence, entered into in 1987, so as to permit office use (for which planning permission had been obtained) was refused, the Tribunal observed that had the question of the exercise of discretion arisen, there was nothing to justify releasing the applicants from the contractual obligation which they had undertaken so recently. 16.88 A similar attitude to that adopted in relation to original covenants which are recent is also adopted where there has been a recent modification of a covenant by the Tribunal. Thus, in Re Hedges’ Application222 the Tribunal indicated that even if it had found a case made out for the exercise of its discretion, it would not have granted the application in view of the recency (24 months previously) of the previous modification. Further, in Re Sheehy’s Application223 the fact that the applicants had reaffirmed the covenants as recently as 1986 was considered to be a material, although not the decisive, factor in the exercise of the Tribunal’s discretion against the applicants. But the mere fact that the land has recently been transferred to the applicant ‘subject to’ the covenant and that he had covenanted with the transferor (but not with the person entitled to the benefit of the covenant) to observe the covenant and indemnify the transferor from and against any breach does not amount to a reaffirmation and is irrelevant.224 16.89 Finally, and reverting to Cresswell v Proctor,225 Winn LJ, whilst acknowledging the fact of the applicants’ ‘startlingly prompt attempt to escape from a voluntarily undertaken contractual obligation’, pointed out that there were, in the case, other ‘affirmative considerations226 which might have led another mind to override the sanctity-of-contract argument in favour, on balance, of modifying the covenant, …’ but that the tribunal member had not ‘abused his discretion or acted on wrong grounds … in exercising that discretion’. 16.90 The upshot of the foregoing may perhaps be summarised as follows. In so far as (in the case of freehold land) the recency of the covenant is a factor which features in an application, it has a negative effect on the force of the presumption which otherwise arises227 in favour of the exercise of the discretion

220 221 222 223 224 225 226

(1980) 41 P&CR 383, at 388. (1990) 59 P&CR 502, at 511. (1956) 7 P&CR 270. (1991) 63 P&CR 95, at 107. Re Wickin’s Application (1962) 183 Estates Gazette 541, CA. [1968] 1 WLR 906, at 915C–D. Consisting of the existence of a number of other planning permissions in the neighbourhood the implementation of which would increase the housing density and that ‘there is considerable merit in the view that this land would be better used to carry a bungalow and provide living accommodation than it will if it remains sterile in the sense of having no building on it’. 227 See, eg Ridley v Taylor [1965] 1 WLR 611, at 623; Re GE & CR Goldsmith’s Application (1961) 13 P&CR 209, at 211; and Re Hornsby’s Application (1968) 20 P&CR 495, at 503. It should be noted, however, that these were all cases decided before s 84(1B) imposed a mandatory requirement on the Tribunal to consider certain specified factors before exercising its discretion

488

The Upper Tribunal’s powers 16.92 by granting the application.228 But this negative effect may be off-set by evidence of factors which have a positive effect on the force of the presumption.

Leasehold land 16.91 In the case of a covenant affecting leasehold land,229 the Tribunal’s jurisdiction will only arise where at least 25 years of the term have expired.230 In Ridley v Taylor,231 both Harman and Russell LJJ, in whose judgments Diplock LJ concurred, expressed the view that in the case of a covenant in a lease which is ‘redefined’ (in that case, by a duly executed licence containing a modification of the original covenant and otherwise reaffirming the covenants in the lease) then, even though 25 years had elapsed from the commencement of the original term, the Tribunal should not exercise its discretion to grant an application until 25 years had elapsed from the date of the redefinition.232 Presumably the same approach would be held to be applicable in the case of new or supplementary covenants although the existing covenants were not reaffirmed. However, as has already been seen,233 the Tribunal must exercise a discretion and this was subsequently described in the Court of Appeal as a guideline rather than a rule as such (though the rationale for it will mean it is likely to be applied in ordinary case, having regard to the contents of section 84(4)).

(2)  The fact that the applicant is the original covenantor 16.92 It is now234 clear that an original covenantor is a competent applicant.235 However, there is a body of authority tending to show that this fact is nevertheless a material circumstance to be taken into account by the Tribunal when deciding whether or not to exercise its jurisdiction. In Re Wynyates Smith Ltd’s Application,236 the President of the Tribunal expressed reservations about the worthiness of an application where the applicant company was closely associated with the original covenantor company and in Re Rudkin’s Application,237 (where the applicant was the original and any predisposition to grant the application must presumably now only emerge following a review of those specified factors. But as to the continuing strength of the presumption, see para 16.66 above. 228 See Re Beech’s Application, above, and the judicial dicta cited above concerning the task of the applicant being thereby increased. 229 As to the meaning of ‘affecting leasehold land’ for this purpose, see para 16.13 above. 230 Law of Property Act 1925, s 84(12). It will also only arise if the original term was for more than 40 years. See para 16.12 above. 231 [1965] 1 WLR 611, CA. 232 See, further, para 16.15 et seq. 233 Above, para 16.59. 234 The contrary was argued before the Lands Tribunal in Re Stevens’ Application (1962) 14 P&CR 59 on the basis that s 84 gave no power to modify contractual rights. But this foundation for the argument has since been exploded: see Shepherd Homes Ltd v Sandham (No 2) [1971) 1 WLR 1062 (Megarry J). 235 See Ridley v Taylor [1965] 1 WLR 611 and Shepherd Homes Ltd v Sandham (No 2) [1971] 1 WLR 1062. As to whether this is so where the covenant is personal in the sense that it is not capable of running with the land, see above, para 16.28 et seq. 236 (1963) 15 P&CR 85, at 88 (Erskine Simes QC). 237 (1963) 16 P&CR 75, at 79.

489

16.93  Modification and discharge pursuant to LPA 1925, s 84(1) covenantor) the same Tribunal expressed the view that: ‘The Tribunal is I think justified in requiring from an original covenantor a somewhat higher proof of justification for the modification sought’. 16.93 In Re Robinson’s and O’Connor’s Application,238 this dictum was applied where one of the two joint applicants was an original covenantor. 16.94 In Ridley v Taylor239 Harman LJ expressed the view that ‘the court should be slow to relieve an applicant of covenants which he himself has entered into.’ But in the same case, Russell LJ said:240 ‘I do not for myself think that the particular situation of the tenant, as having not very long since struck a bargain inconsistent with this particular outcome, is a factor in the exercise of discretion. I do not think that the personality of the tenant or his past behaviour is relevant to the exercise of the discretion. I refer again to the fact that tomorrow an assign may make the same application. I think that the decision (including the exercise of discretion) must be related to the property and its history as such.’ However, since Diplock LJ concurred in both judgments it is not clear whether, and if so in what respects, the two views are in conflict. In Jones v Rhys-Jones241 Stephenson LJ suggested that since Diplock LJ concurred in both judgments, any conflict between them ‘may be more apparent than real.’242 16.95 In Re Watson’s Application,243 the Tribunal granted an application for the discharge of a covenant, entered into by the applicant some 30 years previously, confining back land to use for the purposes of a garden, the applicant having obtained outline planning permission for its development by the erection of four dwellings. The sole objector was the original covenantee who, however, owned no land in the vicinity. In expressing his reluctance either ‘to dimiss the application and leave the parties to consider the prospect of an action in the courts involving more costs and more delay’ or ‘to allow the applicant to break her contract scot-free’ the President discharged the covenant subject to the payment of compensation assessed under section 84(1)(ii).244 16.96 In Re Dransfield’s Application,245 the Tribunal modified a covenant, subject to the payment of compensation, so as to permit the construction of a second residence on land restricted (for the benefit of a neighbouring house) to one private dwelling house, the Tribunal apparently attaching no significance

238 239 240 241 242

(1964) 16 P&CR 106 at 111. [1965] 1 WLR 611, at 618. Ibid, at p 623. (1974) 30 P&CR 451, at 458. An additional factor in Ridley v Taylor was that the applicant covenantor was a lessee. Harman LJ said ([1965] 1 WLR 611, at 618): ‘It seems to me that it should be more difficult to persuade the court to exercise its discretion in leasehold than in freehold cases’. See, further, para 16.28 above. 243 (1966) 17 P&CR 176 244 The decision seems to have been worthy of Solomon. Since the objector owned no land capable of benefiting from the covenant, he could almost certainly not have enforced the covenant by injunction or (for that reason) claimed damages in lieu of an injunction. His sole remedy would have been to claim damages for breach of covenant at common law – if and when the breach occurred (quia timet damages being available only in lieu of a quia timet injunction). But since he would suffer no loss from any breach, the damages would be nominal. 245 (1975) 31 P&CR 192 (JH Emlyn Jones FRICS).

490

The Upper Tribunal’s powers 16.98 to the fact that the applicants were the original covenantors. In the course of delivering its decision the Tribunal said:246 ‘It was suggested to me by Mr Hague [who appeared for the objector] that I should be slow to interfere with the contract entered into in 1953 since the present applicants were the original covenantors. Parliament has however recognised that occasions may arise when covenants so entered into may be properly modified or discharged and has laid down a series of tests which are to be applied. I do not consider that the applicants have in any way acted improperly in making this application and I am prepared to exercise my discretion in granting the application.’ 16.97 In Re New Ideal Homes Ltd’s Application,247 the applicants had, less than four years before the date of their originating application, entered into a covenant not to build more than 75 houses on 9.66 acres of land. In 1976, the Secretary of State, on appeal, granted planning permission permitting the building of 156 houses and the applicants sought modification of the covenant under paragraph (aa) to permit this number of houses. The Tribunal was satisfied that the requirements of paragraph (aa) were made out and, on the question of the exercise of its discretion, concluded that, although the covenant was both recent and one entered into by the applicant for the benefit of the covenantee’s vacant adjoining land, it was right that the exercise of that discretion should follow the event. In doing so, the Tribunal took into account that the covenantee would receive compensation but added that he ‘might have taken a stricter view but for the decision of the Court of Appeal in Jones v Rhys-Jones’.248 By contrast, in Re Livingstones’ Application,249 the Tribunal, whilst not being satisfied that either of the grounds for the application had been established, added that if a case had been established, it would have refused to exercise its discretion in favour of the applicants as the applicants were aware of the existence of the restriction (imposed in 1973) when they bought the house in March 1981, and could ‘therefore be said to have entered into it voluntarily as recently as March 1981’.250 16.98 Similarly, in Re Beech’s Application,251 the Tribunal added that had a case had been established (which it was), it would have refused to exercise its discretion in favour of the applicants to modify a covenant not to use a house other than as a private residence to enable the premises to be used as annex offices by an adjacent solicitors’ business when they bought the property from the council at a discount as a home under the ‘right to buy’ provisions in 1987.252

246 Ibid, at p 194. No authorities are referred to in the report. 247 (1978) 36 P&CR 476. 248 (1974) 30 P&CR 451. The same approach was adopted for the same reason by the same Tribunal in Re Pearson’s Application (1978) 36 P&CR 285 at 294 (the covenant being eight years old). See also Re Beecham Group Lid’s Application (1980) 41 P&CR 369. 249 (1984) 47 P&CR 462. 250 The application being heard by the Tribunal not long thereafter, in October 1982. 251 (1990) 59 P&CR 502 at 511 (HH Judge Marder QC, President). 252 In Re O’Reilly’s Application (1993) 66 P&CR 485 (HH Judge Marder QC, President) and Re Love’s and Love’s Application (1993) 67 P&CR 101 (HH Judge O’Donoghue), the Tribunal in modifying a covenant made no reference to the fact that the applicant was, in each case, the original covenantor or that the covenant was recent.

491

16.99  Modification and discharge pursuant to LPA 1925, s 84(1) See also Re Barclays Bank plc’s Application,253 where restrictions had been entered into in 1977 by the applicant bank’s mortgagor, the object of which was found to be ‘not viable from its inception’. In ordering modification of the restrictions, the Tribunal appears to have been influenced by the fact that the bank itself had committed no breach of the restrictions. The implication is that if the mortgagor (who was not the original covenantor but had been party to a breach) had been the applicant, the decision might have gone the other way. 16.99 There is, however, clearly nothing to legally prevent an original covenantor seeking discharge or modification under the section. 16.100 It should be noted that as an express agreement on the part of an original covenantor not to make an application under section 84(1) would be likely to be void as being contrary to public policy,254 there can surely be no scope for the law itself to imply such an agreement.255 However, the recency of the covenant may be a factor (as to which, see above 16.83 et seq) and the particular circumstances may be such as to mean the fact the applicant is an original covenantor is material to the Upper Tribunal’s exercise of its discretion (potentially in conjunction with recency, as it appears to have been treated in Re Beech’s Application256). The fact the application is made by the original covenantor is not an automatic knock-out blow, but just one of the circumstances, and, as with other matters going to discretion, what weight it will carry in the exercise of the Tribunal’s discretion must depend on the context, all the circumstances, and the facts.

(3)  Changes in the property benefited by the restriction 16.101 In so far as such changes undermine the original purpose of the covenant, they will operate as a factor in favour of discharge or modification.257 In the case of covenants with public authorities which are statutorily deemed to own land benefited by the covenant, relevant changes of policy which could if proved be a factor in favour of modification.

(4)  The ‘thin end of the wedge’ argument 16.102 An argument based on the principle of the ‘thin end of the wedge’ frequently features in arguments put forward by objectors. The argument is that a proposed development, though relatively innocuous in itself, may open the way to further developments which taken together will undermine the efficacy of the protection afforded by the covenants.258

253 (1990) 60 P&CR 354. 254 See para 16.4 above. 255 This must be so whether the covenant was entered into before 1926 or after 1925 since such express or implied covenant can only arise after 1925. 256 The corollary being that where the covenant has been entered into by the applicant a very long time before the application in circumstances which have changed, it may be of lesser, or no, relevance, depending on the circumstances. 257 See the observations of Stephenson LJ in Jones v Rhys-Jones (1974) 30 P&CR 451, at 460. 258 This statement of the argument is taken from the judgment of Carnwath LJ for the Court of Appeal in Shepherd v Turner [2006] 2 P&CR 28, at p 26.

492

The Upper Tribunal’s powers 16.104 In McMorris v Brown,259 the Privy Council (at p 151) adopted the following statement by the President of the Lands Tribunal (HH Judge Marder QC) in Re Snaith and Dolding’s Application260 (where the applicants had been seeking modification of a covenant to enable them to build a second house on a single plot within a building scheme): ‘Any application under section 84(1) must be determined upon the facts and merits of the particular case, and the Tribunal is unable to bind itself to a particular course of action in the future in a case which is not before it … It is however legitimate in considering a particular application to have regard to the scheme of covenants as a whole and to assess the importance to the beneficiaries of maintaining the integrity of the scheme. The Tribunal has frequently adopted this approach … In so far as this application would have the effect if granted of opening a breach in a carefully maintained and outstandingly successful scheme of development, to grant the application would in my view deprive the objectors of a substantial practical benefit, namely the assurance of the integrity of the building scheme. Furthermore I see the force of the argument that erection of this house could materially alter the context in which possible future applications would be considered.’ 16.103 Any application under section 84(1) must be determined upon the facts and merits of the particular case, and the Tribunal is unable to bind itself to a particular course of action in the future in a case which is not before it. Accordingly, it cannot on granting an application for discharge or modification indicate that it will not allow other applications in the future which seek similar relief: see Re Ghey & Galton261 and Re Farmiloe.262 As it was put by HH Judge Marder QC, President, in Re Snaith and Dolding’s Application263 (above), however: ‘It is however legitimate in considering a particular application to have regard to the scheme of covenants as a whole and to assess the importance to the beneficiaries of maintaining the integrity of the scheme. The Tribunal has frequently adopted this approach. See for example Re Henman (1972) 23 P&CR 102; Re Saviker (No 2) (1973) 26 P&CR 44l; and Re Sheehy (1992) 63 P&CR 95.’ 16.104 Similarly, in Re Zenios264 (which concerned a restriction in favour of Hampstead Garden Trust), it was contended that each proposal fell to be considered on its own merits, and that the proposal was acceptable in itself. George Bartlett QC, President, said: ‘I do not accept the applicants’ contentions in this respect. It is an important purpose of the controls exercised by the Trust to prevent creeping incrementalism. It is unrealistic to suppose that successive developments of this sort can be permitted, on the basis that each in itself does little harm, up to the point at which one further development would significantly affect

259 260 261 262 263 264

[1999] 1 AC 142. [1995] 71 P&CR 104, at p 118. [1957] 2 QB 650. (1983) 48 P&CR 3l7. [1995] 71 P&CR 104. [2010] UKUT 260 (LC).

493

16.105  Modification and discharge pursuant to LPA 1925, s 84(1) the character of the area, with an embargo being imposed from then on. The reasons for this are obvious. Each such development creates pressure to reach a similar decision on the next application (in equity, because it would seem unfair to treat two comparable applications differently; and judgementally, because a similar development will previously have been judged to be acceptable). It is moreover wholly improbable that there could be some identifiable threshold up to which development could be seen to be acceptable and beyond which further development could be seen to be unacceptable. Instead there would be the risk that cumulative developments would gradually erode the character of the area to the point at which the erosion itself was seen to reduce the justification for refusing further applications.’ The Tribunal accepted the objectors’ evidence the value of additional floorspace in the area was so very high there was in consequence an incentive to extend. The applications under grounds (aa) and (c) were dismissed. 16.105 On appeal, the Court of Appeal, sub nom Zenios v Hampstead Garden Trust Ltd,265 pointed out it was not a question of legal precedent but that the Upper Tribunal was ‘entitled to consider the proposal’s likely precedent effect as a matter of fact’, and described the Tribunal’s conclusion on the point as free from legal error. 16.106 Where jurisdiction for the granting of the application rests solely on ground (aa) or (c) in section 84(1), then this argument is germane to the question of jurisdiction in the context of whether the discharge or modification would ‘injure’ the persons entitled to the benefit of the restriction (under paragraph (c)) or would remove a ‘practical benefit’ under paragraph (aa) since, as pointed out in Re Teagle’s and Sparkes’ Application,266 if granting the application would make the restriction itself vulnerable to future applications, then that amounts to an ‘injury’ for the purposes of paragraph (c) and the same applies as to a ‘practical benefit’ under paragraph (aa).267 Where jurisdiction is established on ground (c)268 or rests on ground (a) or (aa), then the argument can (where appropriate) still be deployed in the context of the exercise of the Tribunal’s discretion against granting the application. 16.107 In Shephard v Turner269 Carnwath LJ said: ‘It is not in dispute that one material issue (often described as the ‘thin end of the wedge’ point) may be the extent to which a proposed development, relatively innocuous in itself, may open the way to further developments which taken together will undermine the efficacy of the protection afforded

265 [2011] EWCA Civ1645. 266 (1962) 14 P&CR 68, at 72. 267 It was so considered in this context in Love’s and Love’s Application (1993) 67 P&CR 110, 117–118 (HH Judge O’Donoghue), where the ‘thin end of the wedge’ argument was referred to by the Tribunal as ‘perhaps the most important ground of objection’ but was rejected ‘on the special facts of this particular case’. (However, the last sentence in the headnote is misleading in so far as it suggests that the Tribunal overcame the thin end of the wedge argument by the drafting procedure of leaving the wording intact and simply adding a proviso – in fact, the usual method of modifying a covenant). A similar view was expressed by the President in relation to a scheme of covenants affecting the Wildernesse Estate at Sevenoaks in Re Snaith and Dolding’s Application (1995) 71 P&CR 104 (application dismissed). 268 As in Re Forgac’s Application (1976) 32 P&CR 464, at 468. 269 [2006] 2 P&CR 28, at para 26 (though the argument failed on the facts there).

494

The Upper Tribunal’s powers 16.108 by the covenants … the ‘thin end of the wedge’ argument is relevant, but the issues it raises are ones of fact, not law.’ 16.108 What force, if any, the ‘thin end of the wedge’ argument has will therefore depend on the circumstances, as illustrated by the following cases: ●●

●●

●●

●●

●●

●● ●● ●● ●● ●●

Re AH Field & Co (Developers) Ltd’s Application (1957) 7 P&CR 169, 171 (treated as a reason for not exercising discretion, had it arisen, in favour of modification as ‘it might serve as a precedent for future applications since it is difficult to imagine any part of the estate where maintenance of the existing density is more desirable and a modification less justified’); Re Emery and Emery’s Application (1957) 8 P&CR 113, at 117–118 (thin end of the wedge argument a ‘relevant deciding consideration’ in refusing to modify a covenant preventing the building of more than one house on a plot of two acres as many more houses may otherwise come to be built on gardens on the estate, notwithstanding the argument planning permission would not be granted, though it had been here, and the evidence of the present planning officer of the local council – who disfavoured such future development but was ‘more dogmatic about what his council might do in the future than he had any reason to be’); Re North Bedfordshire Association for Moral Welfare’s Application (1959) 10 P&CR 429, at 431 (minor modification sought – from laundry to depository – which was a small alteration which would be of no significance in relation to any other application in the area); Re Taylor’s Application (1964) 16 P&CR 169, at 175 (treated as of no force on the facts give the changes previously licensed in the area by the Duke of Westminster’s Settled Estate over the years; decision in the case was reversed on appeal in Ridley v Taylor [1965] 1 WLR 611, but not on this point); Gee v National Trust for Places of Historic Interest or Natural Beauty [1966] 1 WLR 170 (per Lord Denning MR ‘The inspector said the contours of the land would preclude any further development. This one house will not be driving in the thin end of the wedge’; per Salmon LJ, ‘clearly the granting of this application would create no precedent’); Re Henman’s Application (1970) 23 P&CR 102, at 109 (treated as an argument having ‘some real force’ in the circumstances of the case); Re Mercian Housing Society Ltd’s Application (1971) 23 P&CR 116, 122–123 (view of site convinced Tribunal that argument had no force); Re Gossip’s Application (1972) 25 P&CR 215, at 220 (treated as ‘valid and real’); Re Saviker’s Application (No 2) (1973) 26 P&CR 441, at 442 (treated as a ground for refusal of application as it would undermine the principle of ‘one plot one house’); Re Forgac’s Application (1976) 32 P&CR 464, at 468 (treated as having ‘no bearing on the facts of the present case’ where the modification would not damage the system of covenants, ‘the circumstances of the present application are almost unique and looking at the merits of the application I am quite unable to see how the proposed modification can cause any injury’ and ‘the system of covenants has been breached in minor ways in circumstances where little or no injury has been caused. Any future application it seems to me, must similarly be looked at on its merits’); 495

16.108  Modification and discharge pursuant to LPA 1925, s 84(1) ●●

●● ●● ●●

●● ●● ●● ●● ●●

●● ●● ●● ●● ●●

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496

Cryer v Scott Bros (Sunbury) Ltd (1956) 55 P&CR 183, 201 (Slade LJ referred to Re Forgac’s Application as correctly emphasising, in relation to a ‘knock-on effect’ argument, that any subsequent application would fall to be dealt with ‘on its merits’); Re Osborn’s and Easton’s Application (1978) 38 P&CR 251, 254 (‘precedent an important consideration here’); Re Beecham Group Ltd’s Application (1980) 41 P&CR 369, 391 (decision in favour of applicant not considered as setting a precedent); Re Chapman’s Application (1980) 42 P&CR 114 (argument modification would encourage an application on another plot which would be of detriment to the objectors’ amenities was the only point relied upon by the objectors and was rejected on the basis detriment to their amenities could be relied on in relation to that site if an application came forward in respect of it); Re Barry’s Application (1980) 41 P&CR 383, at 388 (treated as ‘important’ since the scheme of restrictions would be weakened); Re Livingstone’s Application (1982) 47 P&CR 462, 465 (‘some validity’ in the argument); Re Farmiloe’s Application (1983) 48 P&CR 317, at 321 (argument treated as ‘much too remote’); Re Purnell’s Application (1987) 55 P&CR 133 (would undermine the principle of ‘one house per plot’); Re Beech’s Application (1990) 59 P&CR 502, at 510 (treated as relevant to a ‘right to buy’ covenant on the basis that ‘If the scheme of covenants thus created is once breached then it will be more difficult for other modifications to be resisted’); Re Sheehy’s Application (1991) 63 P&CR 95, at 107 (treated as significant as pointing the way ‘for further development of existing back gardens’); Re Poulton’s Application (1992) 65 P&CR 319, at 323 (precedent argument rejected on ground that ‘The circumstances are quite unique.’); Re Solarfilms (Sales) Ltd’s Application (1993) 67 P&CR 110 (‘thin end of the wedge’ argument apparently successful); Re Snaith and Dolding’s Application (1995) 71 P&CR 104 at 118 (erection of a second house on a two -acre plot ‘could materially alter the context in which possible future applications would be considered’); Re Page’s Applications (1996) 71 P&CR 440 (allowing conversion of part of a stables complex to residential accommodation ‘would make it easier for planning permission to be obtained for further residential development in the area’ and also ‘easier to seek discharge or further modification of the covenant on the remainder of the Stables, even though a further application would be considered on its merits’); Re Hunt’s Application (1997) 73 P&CR 126 (‘the relaxation of the scheme of covenants in this instance would create an undesirable and dangerous precedent for further subdivision of plots’); Re Bewick’s Application (1997) 73 P&CR 240 (in relation to a planning agreement entered into under the Town and Country Planning Act 1971, precedent effect of the discharge of the restriction found not to be ‘unduly detrimental’ to the council given that it supported a policy which was well

The Upper Tribunal’s powers 16.108

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established in the development plan – ‘the council can resist the precedent argument in future planning applications by pointing to that policy and the special circumstances surrounding the relaxation of the policy in this case’); Re Willis’s Application (1998) 76 P&CR 97 (‘I cannot see that the limited modification proposed in this application will inhibit or limit the council in enforcing the scheme of covenants against other owners who may wish to breach them. I reject the thin edge of the wedge objection’); Shephard v Turner [2006] 2 P&CR 28 (conclusion that it was ‘extremely unlikely’ that the proposed modification would lead to more than the possibility of one further unit, upheld by the Court of Appeal at para 28); Re Davie’s Application [2006] UKUT 462 (LC) (‘the building of a new brick wall along the back of the pavement edge would break new ground and if it were condoned by way of a discharge or modification … would inevitably lead to other applications which would soon erode the ethos of an open estate with, in the main, soft landscaping’); Re O’Briens’ Application (2008) LP/8/2005 (earlier consents for conservatories added to a quarter of the houses on the estate meant one more ‘would not make much difference’, ‘particularly as none of the other frontage properties are likely to want a conservatory addition on their front elevations’); GR & AL Development’ Application [2009] UKUT 238 (LC) (‘configuration and layout of the estate is such that the opportunity for any further residential development within the area of the building scheme is extremely unlikely’); Re Cain’s Application [2009] UKUT 212 (LC) (‘the fact that the residents have clearly acquiesced in earlier breaches of the one house per plot rule, must severely weaken any arguments that they may pursue in terms of harm to the estate and the “thin end of the wedge”’); Vertical Properties Ltd v New Hampstead Garden Suburb Trust [2010] JPL 793 (‘the fact that this is … the first successful application in almost forty years suggests that applications will remain rare. This is a very large estate with some 3,500 residences in it. … The circumstances affecting a house in the Old Suburb or near the A1 cannot be compared to those affecting a house in Ingram Avenue. It cannot sensibly be suggested that the modification permitting the demolition of a single house built on one half of a plot originally laid out for two houses, will set a precedent elsewhere’); Re Zenios [2010] UKUT 260 (LC) (first-floor extension over garage of house in area of covenants in favour of Hampstead Garden Trust – Vertical Properties (above – involving the house next door!) considered, but ‘very different’ application, success on which would weaken the system of covenants. Value of additional floorspace in the area very high ‘so that there was in consequence an incentive to extend’ elsewhere. Decision in the case upheld by the Court of Appeal at [2011] EWCA Civ 1645); Re Hoyle’s Application [2012] JPL 479 (development estate laid out in 47 lots with covenants not to erect more than two residences on each – application for a further house on the land now owned by the applicants would not ‘set a precedent for an avalanche of new applications’ because ‘there are few remaining development opportunities on the estate’); 497

16.109  Modification and discharge pursuant to LPA 1925, s 84(1) ●●

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Re Thomas’s Application [2012] JPL 1139 (none of the other properties within the development had land to the side of sufficient size to allow for a similar extension to that sought – suggestion that granting the application for modification would be the thin end of the wedge therefore rejected); Re Clarkes’ Application [2015] UKUT 44 (LC) (thin end of the wedge argument of ‘particular relevance’ in that discharge of restriction on fencing in relation to disused part of amenity land would lead to other parts of the amenity land being similarly enclosed by owners of those other parts); Re Stafford-Flowers’ Application [2015] UKUT 82 (LC) (removal of restriction preventing use of bungalow other than as holiday accommodation, on a 278-bungalow site, would be the thin end of the wedge because it would mean others on the holiday site would want to follow suit, leading to a change in the character of the site, opening the way to it becoming a ‘standard residential estate’ with full time occupation); Re Surana’s Application [2016] UKUT 368 (LC) (thin end of the wedge argument unsuccessful – system of covenants in building scheme already ‘destabilised’ and ‘the overall integrity of the scheme [would] not be further jeopardised by allowing the current application’); Dean v Freeborn [2017] UKUT 203 (LC) (replacement of large indoor swimming pool building attached to a house with a separate dwelling house considered to be completely inoffensive and causing no injury whatever to the objectors (so satisfying paragraph (c) of section 84(1) as well as paragraph (aa)) considered not to open the floodgates to other applications; Re Forjacs (above) referred to as illustrating the principle that ‘allowing an application which does not cause injury to the objectors, should not be used in the future to support an application that does cause injury’. Two houses previously built also mean the integrity of the protection which the restriction afforded had already been destabilised).

(5)  Size, style and amenity 16.109 The fact that the size and style of the proposed buildings are controversial and have aroused considerable opposition from those entitled to the benefit of the covenant,270 or (possibly) the fact that the proposed development is objectionable to those entitled to the benefit of the covenant on grounds of amenity or environmental disturbance, have been treated as relevant.271

(6) The fact that no definite plans of the proposed development are in evidence before the Tribunal 16.110 Whilst there are a number of old decisions in which, once jurisdiction has been established, restrictions have been modified to permit, as a matter of principle, a certain type of development,272 the absence of specific plans to 270 See Re Sheehy’s Application (1991) 63 P&CR 95, 107. 271 See Re Hydeshire Ltd’s Application (1993) 67 P&CR 93, 100. But see the earlier decision of Re Luton Trade Unionists’ Club and Institute Ltd’s Application (1969) 20 P&CR 1131, 1139. 272 See, eg Re Jamelson Property Co Ltd’s Application (1956) 7 P&CR 253; Re Campbell’s Application (1958) 9 P&CR 425; Re Potter’s Application (1958) 10 P&CR 68; Re Allnatt (London) Ltd’s Application (1959) 12 P&CR 256.

498

The Upper Tribunal’s powers 16.113 which the requested modification can be linked has featured as a material factor in the Tribunal refusing to make an order. Thus, in Re Wrighton’s Application,273 the applicant sought modification of a covenant, which restricted a two-acre site to use for not more than three private dwelling houses, to permit the erection of three-storey flats on the land. Outline planning permission had been granted for the erection of three-storey flats but no number was specified – that, together with layout and other details, being left for the submission of detailed plans. The plan submitted with the outline application showed three blocks of flats providing in all 27 flats, but the planning authority had indicated that probably 21 flats would be the maximum permitted. The application was dismissed as a matter of discretion, one of the grounds being the absence of definite plans of the proposed development. 16.111 In Re Kershaw’s Application,274 the approach adopted by the Tribunal in the absence of detailed plans showing the proposed development, was to deal with the application on the assumption that the development might be carried out in the worst possible way. In this case modification was granted but the absence of detailed and layout plans resulted in the imposition of stringent conditions which included compensation payments.

(7) The existence or otherwise of planning permission to carry out the proposed development 16.112 Whilst covenants and planning law constitute two separate systems of control, the existence of planning permission is ‘a circumstances which the Upper Tribunal can and should take into account when exercising its jurisdiction under section 84’.275 Although it is not usually an overriding factor in the exercise of discretion,276 in Re Beecham Group Ltd’s Application277 where planning permission had been granted by the Secretary of State in a carefully reasoned appeal, the Tribunal asked itself ‘Why should the Lands Tribunal differ …?’ and answered the question in the negative. However, whilst it is something the Tribunal ‘can and should take into account, it is merely one circumstance and it should not be elevated beyond this, as ‘It is for the Tribunal to make up its own mind whether the requirements of section 84 are satisfied’.278 16.113 In Re Bromor Properties Ltd’s Application,279 the member of the Tribunal re-emphasised that ‘my function is not to act as a tribunal of appeal as to the correctness of these [planning] permissions nor are they conclusive or necessarily persuasive evidence that I should grant this application’.280 273 (1961) 13 P&CR 189. Contrast Re Hornsby’s Application (1968) 20 P&CR 495 where there were detailed plans although (apparently) no planning permission. 274 (1975) 31 P&CR 187, 189. 275 Per Fox LJ in Re Martin’s Application (1988) 57 P&CR 119 at 125. 276 See Re Saviker’s Application (No 2) (1973) 26 P&CR 441 and the observations of Eveleigh LJ in Gilbert v Spoor (1982) 44 P&CR 239, at 245. 277 [1980] 41 P&CR 369 (at p 380). 278 See Re Martin’s Application (1989) 57 P&CR 119. 279 (1995) 70 P&CR 569 (PH Clarke FRICS). 280 See also Re Cordwell [2008] 2 P&CR 26, at paras 63–65.

499

16.114  Modification and discharge pursuant to LPA 1925, s 84(1) So, in Re Hunt’s Application,281 the Tribunal Member in finding that a proposal constituted, in his opinion, ‘an obtrusive and discordant departure’ from a building scheme by building on a plot which was in his view too small, and refusing to modify a restriction to allow it, said: ‘In reaching this conclusion, I bear well in mind that I am differing from the views of the Inspector who granted planning permission on appeal. The Inspector’s views command respect, but they are not binding on the Tribunal. This case is a good illustration of the differences in the criteria to be applied on the one hand in the context of a planning appeal and on the other in existence of the statutory regime under section 84(1) of the 1925 Act. The need to maintain the distinction was recognised and explained by the Court of Appeal in the case of Re Martin.’ The fact that the period of validity of the planning permission has expired is something the Tribunal refused to take into account in Re Quaffers Ltd’s Application.282

(8)  Injury to an objector 16.114 The fact that, although a ground for discharge of the covenant is made out, a person entitled to its benefit would in fact be injured by its discharge, is a relevant factor.283

(9) The fact that the application runs counter to the underlying purpose of the covenant 16.115 The fact that the application runs counter to the underlying purpose of the covenant has been held to be a relevant factor.284

Special considerations in relation to building schemes 16.116 In Gilbert v Spoor,285 Waller LJ I the Court of Appeal, echoing earlier cases, referred to the building scheme as local law and went on at page 35: ‘If on a building estate a restrictive covenant is broken by any plot holder it is potentially an interference with the rights of all other plot owners. It may be such that it is a momentary irritation to the owner of the land some distance away. The nearer it is the greater the possibility of it being an interference to the amenities of owners. If a building estate contains a pleasant approach with restrictions upon it and some building is done in contrary to those restrictions which spoils the approach, if then the owner of a plot complains about that breach, the fact that he does not see it until he drives along the road,

281 (1997) 73 P&CR 126. 282 (1988) 56 P&CR 142, see p 146. 283 And see below under para 19.39 paragraph (a) of s 84(1) (covenant obsolete). 284 See Westminster City Council v Duke of Westminster [1991] 4 All ER 136, per Harman J at 146h. 285 [1983] Ch 27.

500

The Upper Tribunal’s powers 16.117 in my opinion, does not affect the matter. He is entitled to the estate being administered in accordance with the mutual covenants, or local law …’ In Re Bromor Property Ltd’s Application,286 the Lands Tribunal applied Gilbert v Spoor, saying: ‘In short, I think that the effect of my finding of the existence of a building scheme is that there is a greater presumption that restrictive covenants will be upheld and therefore a greater onus of proof on the applicants to show that the requirements of section 84 are satisfied.’ Similarly, in Re Lee’s Application,287 the Tribunal (comprising the same member), after referring to Gilbert v Spoor, said: ‘The effect of the building scheme is that there is a greater presumption that restrictions imposed under it will be upheld and therefore a greater burden of proof on the applicant to show the requirements of section 84 are met. This is the background to this application.’ 16.117 Following Re Bromor’s Application, where there was a building scheme, the Tribunal (through its various members) referred to an ‘increased presumption’ that restrictions in covenants coming before the Tribunal under section 84(1) would be maintained. In Dobbin v Redpath,288 the Tribunal found there to be a building scheme and said ‘the existence of a building scheme also increases the presumption that the restriction will be maintained’ and ‘I do not consider that these policy issues [ie the development plan and the planning issues], applied to an individual plot, outweigh the increased presumption under a building scheme that the restriction will be maintained’. The Court of Appeal upheld the decision of the Tribunal, and said that there was a difference in the approach to the application of the section 84(1) discretion, consequent upon the finding of a building scheme. However, the Court said that the use of the word ‘presumption’ may be ‘misleading’289 and an ‘inapt’ expression.290 And that it would be better for the Tribunal ‘to consider the matter in terms of the weight to be attached to objections in the light of the special interest of the beneficiaries of covenants of the building scheme’.291 This was on the basis that: ‘Where there is no building scheme there may be a diminishing relationship as between the weight to be attributed to the source of the complaint and the physical distance of the objectors land interest. By contrast, where there is a building scheme so long as the objector has an interest inside the physical compass of the building scheme, the location of the objector outside his or her land interest but inside the building scheme does not affect the matter, as Waller LJ pointed out [in Re Bromor].’292

286 287 288 289 290 291

(1995) 70 P&CR 569. (1996) 72 P&CR 439. [2007] EWCA Civ 570. Carnwath LJ at para 29. Lawrence Collins LJ at para 24. Lawrence Collins LJ at para 24; comments to the same effect were made by Carnwath LJ in para 29. 292 Lawrence Collis LJ at para 23, with whom the other members of the Court agreed.

501

16.118  Modification and discharge pursuant to LPA 1925, s 84(1)

Irrelevant factors 16.118 The Upper Tribunal must not act on the basis of irrelevant factors. To do so would amount to a non-judicial exercise of the discretion which would entitle the Court of Appeal to interfere.293 Among irrelevant factors are: (a) the fact that the purchase price paid by the applicant was less because of the covenant;294 (b) the fact that, if the application succeeds, the applicant stands to make a large profit,295 or that his object in seeking the modification was so as to make a profit.296 If, however, the applicant has so dealt with his land as to render what he retains sterilised by restrictions and he seeks the Tribunal’s assistance to enable him to profit from such manner of dealing, then these factors taken together may well be relevant;297 (c) except in the case of covenants entered into with public bodies regarded as custodians of the public interest,298 the fact that the proposed development would or might have an injurious effect on neighbouring properties which do not fall within the scope of the benefit of the covenant.299 In Re Ghey and Galton’s Application,300 Lord Evershed MR said: ‘The tribunal is not asked to say what the tribunal thinks would be advantageous from one point of view or another to the neighbours. The tribunal is not asked to act as a kind of planning authority; …’ In Re GE & CR Goldsmith’s Application,301 the President of the Tribunal, after observing that the erection of two of the five bungalows proposed to be erected by the applicants ‘may prove to be an eyesore’, added: ‘Be that as it may, sitting in this capacity I do not regard myself as a town planner and, seeing that the objection is not laid by a person entitled to the benefit, I do not consider that I would be justified in denying the applicants the modification they have asked for’;302 293 See Cresswell v Proctor [1968] 1 WLR 906, per Winn LJ at p 915F (referring to the Tribunal acting ‘on wrong grounds’). 294 See Cresswell v Proctor [1968] 1 WLR 906, at p 913G (land purchased by applicants in 1962 from trustees of a convent – purchase price £500; conveyance contained covenant by applicants with the trustees not to erect any building on the land or use it for any purpose other than as a private garden; application for modification to allow the erection of a bungalow for which planning permission had been obtained). 295 Ibid, per Harman LJ at p 913H. 296 Gee v National Trust for Places of Historic Interest or Natural Beauty [1966] 1 WLR 170, per Salmon LJ at 178D. 297 Re Morgan’s Application (1955) 7 P&CR 200. 298 See, eg the evidence considered in Re Love’s and Love’s Application (1993) 67 P&CR 101, 105–106. 299 Using the word ‘benefit’ in its technical sense. This factor is, of course, irrelevant only in respect of neighbouring properties whose owners or occupiers are not entitled to enforce the covenant. 300 [1957] 2 QB 650, at 662. 301 (1961) 13 P&CR 209, at 211 (Sir Wm Fitzgerald QC). 302 In Re Wrighton’s Application (1961) 13 P&CR 189, at 194, the President of Tribunal, Erskine Simes QC, in refusing to grant the application as a matter of discretion, took into account that the erection of blocks of flats ‘would have an injurious effect upon the owners of the existing properties’ none of whom, according to the Tribunal’s findings, was entitled to the benefit of the covenant. However, the Tribunal did not indicate the basis upon which it considered it was entitled to take such injurious effect into account; and in any event the Tribunal appears to have

502

The Upper Tribunal’s powers 16.120 (d) in the case of a public body covenantee which (by statute) is deemed to own land benefited by the covenant, the fact that if the modification is granted the covenantee’s fund-raising activities would be prejudiced or that other landowners might be deterred from entering into similar covenants;303 (e) the fact that the discharge or modification sought would be futile since the proposed development would still be blocked by another covenant.304

Factors as to which there is doubt whether they are relevant or irrelevant 16.119 In Ridley v Taylor,305 Russell LJ drew a hard and fast distinction between personal factors affecting the applicant (which he regarded as irrelevant) and factors relating to the property (which he regarded as relevant) and stated his views as follows: ‘I do not myself think that the particular situation of the tenant, as having not very long since struck a bargain inconsistent with this particular outcome, is a factor in the exercise of discretion. I do not think that the personality of the tenant or his past behaviour is relevant to the exercise of the discretion. I refer again to the fact that tomorrow an assign may make the same application. I think that the decision (including the exercise of discretion) must be related to the property and its history as such.’ It may be observed that although this statement makes no specific reference to personal factors affecting the objectors, it seems clear from Russell LJ’s remarks that personal factors affecting them ought also to be excluded from consideration. Whilst all later cases and decisions of the Tribunal (as well as the provisions of section 84(1B)) are entirely consistent with relevant factors being factors which are ‘related to the property and its history’ doubt remains as to how far personal factors are necessarily irrelevant. 16.120 Attention may, however, usefully be brought to four general points. First, as Russell LJ pointed out, ‘tomorrow an assign may make the same application’. Second, the factors (for the exercise of the discretion) specifically mentioned in section 84(1B) are all non-personal factors. Third, if the ejusdem generis rule does apply to the words ‘any other material circumstances’306 this would, as a matter of construction, seem necessarily to exclude personal factors.

303 304

305 306

considered the alternative possibility that the non-objecting owners might perhaps be entitled to the benefit of the covenant but that they did ‘not feel that they would be injured’. On this latter footing, there is no inconsistency between this decision (given in January 1961) and that in Re GE & CR Goldsmith’s Application (given in July 1961). Gee v National Trust for Places of Historic Interest or Natural Beauty [1966] 1 WLR 170, per Davies LJ at 176H. Re Luton Trade Unionists Club and Institute Ltd’s Application (1969) 20 P&CR 1131, where discharge was sought of only one of three disabling restrictions in the same conveyance and the Tribunal observed (at p 1139) that if (which did not happen) the applicants had applied for an amendment to include the other two restrictions, the amendment would not have been allowed since new notices and advertisements would have been required. See, also, Re Fisher & Gimson (Builders) Ltd’s Application (1992) 65 P&CR 312, at 318 where the other possible disabling covenant was contained in an earlier conveyance. [1965] 1 WLR 611. The case related to restrictions in a lease. Whether confined to the words which follow the final comma or extending also to the words which appear between that comma and the preceding comma; see above, paras 6.81–6.82.

503

16.121  Modification and discharge pursuant to LPA 1925, s 84(1) Fourth, whilst it is now accepted that section 84(1) extends to the discharge and modification of the purely contractual elements in restrictions affecting land,307 the fact that the language of the subsection identifies the subject matter of the discharge or modification as ‘any freehold land affected by any restriction’ suggests that the primary concern of the subsection was with the effect of the restriction on the land as a resource and not with the personal relief of the applicant.308 However, in some decisions, certain personal factors affecting the applicant309 have featured in the reckoning and it is proposed to consider these individually.

Applicant the original covenantor 16.121 The relevance (or otherwise) of the applicant being the original covenantor has already been considered above.310

Personality of the applicant 16.122 In Re Independent Television Authority’s Application,311 one of the factors which the Tribunal treated as relevant in overcoming a preliminary unwillingness312 to exercise its discretion positively, was ‘that the applicant is a public body’ which required the modification to enable it to perform its statutory duty.

307 Above, para 16.28 et seq. 308 This is perhaps to some extent borne out by the fact that the original adjudicating body (‘the Authority’) under s 84(1) comprised such of the Official Arbitrators appointed for the purposes of the Acquisition of Land (Assessment of Compensation) Act 1919, as were selected by the Reference Committee under that Act: see the pre-1950 provisions of s 84(10). 309 In Gee v National Trust for Places of Historic Interest or Natural Beauty [1966] 1 WLR 170 (where the National Trust was the objector), the alleged impact, if the modification were allowed, on (i) the National Trust’s fund-raising activities and (ii) its credibility in seeking similar covenants from other landowners, were held by the Court of Appeal to be irrelevant factors and since the Tribunal’s exercise of its discretion in refusing the application had been based on those factors, the Court of Appeal granted the application. However, the members of the Court of Appeal did not speak with one voice as to the reason these factors were irrelevant. Lord Denning MR considered that, on the facts, neither of the alleged consequences would flow; Davies LJ was content simply to say that those factors were irrelevant, and Salmon LJ summarily dismissed them on the ground that there was not ‘one tittle of evidence’ to support either of them. It is nevertheless suggested that what lies at the heart of the irrelevance is the fact that both factors related to the effect of the modification on the personal situation of the objector to the exclusion of any effect on the land (deemed in that case to be) benefited by the covenant or on any interests (namely the preservation of the natural beauty of the environnment) which might be considered as falling within the scope of the covenant. 310 Above, para 16.92 et seq. 311 (1961) 13 P&CR 222, at 226 (Erskine Simes QC) – application for modification of a covenant to enable the television authority to erect a 500-foot television mast. 312 Presumably the Tribunal considered that there were negative factors requiring to be off-set by positive factors before the discretion could be positively exercised. Otherwise the presumption in favour of granting the application would have applied once jurisdiction had been established (which it clearly was under s 84(1)(b) once the final two objectors had withdrawn their objections during the course of the hearing). Alternatively, it may be that, at that time, the Tribunal was not convinced as to the legal existence of the presumption (which only clearly manifested itself following Russell LJ’s observations in Ridley v Taylor [1965] 1 WLR 611. As to the presumption, see further, above, para 16.63 et seq.

504

The Upper Tribunal’s powers 16.124 In Re Barry’s Application,313 the Tribunal, whilst finding that no case for jurisdiction had been made out, added that it would in any event have been in doubt whether it ought to exercise its jurisdiction having regard to three factors, of which one was that one of the applicants and two of the objectors had been members of the same self-help building group (formed in 1963 and wound up in 1968) which had built the houses on the applicants’ and the two objectors’ plots and that it would seem wrong that any one member should receive an advantage at the expense of others.

Past behaviour of the applicant 16.123 As to the ‘past behaviour’ of the applicant, a number of Lands Tribunal decisions appear to have treated such behaviour as relevant. In Re SJC Construction Co Ltd,314 the Tribunal found that the applicants were rash in commencing the development. However, as they acted in good faith in that they did not intend to force the hand of the owner of the benefited land, it was considered right to exercise its discretion in favour of modification bearing in mind the following factors, namely that: (i) planning permission for the flats had been granted; (ii) although the flats would have an adverse effect on the benefited land, that effect could not be described as serious; (iii) there was a scarcity of building land in the whole of south-east England, including the area in question; (iv) the building work so far done would be wasted if modification was not granted; (v) a substantial amount of compensation could be awarded. 16.124 In Re Bradley Clare Estates Ltd’s Application,315 the Tribunal found that the facts established jurisdiction to discharge or modify the covenant in question under both paragraph (a) and (aa) of section 84(1) so as to permit the construction of 31 sheltered housing units in five buildings on land which the covenant restricted to one dwelling house. However, in relation to the exercise of its discretion, the President of the Tribunal said: ‘If I had decided this matter under paragraph (aa) alone and not under paragraph (a) I would seriously have to consider whether I ought to refuse to exercise the discretion of the Lands Tribunal in favour of the applicants on the ground that they have partially erected a building in breach of covenant and that they have continued to cause or permit work to be carried out on that building (notwithstanding a warning I gave during the hearing) and continued to do so whilst I was inspecting the land of Nos 12 and 14.316 However, since I have also decided, under paragraph (a) that the restrictions ought to be deemed obsolete it appears to me that it is right that I should exercise the discretion of the Lands Tribunal in favour of the applicants.’

313 (1980) 41 P&CR 383, at 388 (VG Wellings QC)–application for modification to allow an additional house on part of the garden of the permitted house. 314 (1974) 28 P&CR 200. 315 (1987) 55 P&CR 126, at 132 (VG Wellings QC). 316 No 14 being the application land and No 12 the objectors’ land.

505

16.125  Modification and discharge pursuant to LPA 1925, s 84(1) The President drew a distinction between the position where an application succeeded under paragraph (a) and where it did so only under paragraph (aa). It is perhaps only reasonable that if the covenant still has purpose and user contrary to its terms it would still cause substantial injury to someone with the benefit of it, but the applicant is asking for it to be released under paragraph (aa) on the basis that his reasonable use of the land would be impeded thereby, his own unreasonable behaviour in relation to the use of the land in flagrant disregard, not only of the covenant, but of the Tribunal’s processes and views, should be able to be taken into account in deciding whether it is right for the Tribunal to exercise in his favour the discretion that it has to exercise in relation to whether or not to grant relief. If, on the other hand, the covenant is found to be obsolete under ground (a), to exercise the discretion against the applicant would appear more akin to simply punishing him for what he has done as the covenant has no purpose to serve anyway. In Barclays Bank plc’s Application,317 in 1977 the former owner of a site on a farm entered into a ‘section 52’ covenant318 that a bungalow to be erected on the site would not be occupied except by a person employed or last employed locally in agriculture or forestry. In 1982 the site was sold to the present owner who mortgaged it to the applicant bank, built the bungalow and (in breach of the covenant) occupied it until his bankruptcy in 1986. In granting the bank’s application for the discharge of the restriction under paragraphs (a) and (aa), the Tribunal observed that the bank had committed no breach of the restriction, the implication being that it might not have acceded to the application if it had been made by the owner who had been in breach. 16.125 Consistent with the views expressed by the President in Re Bradley Clare Estates Ltd’s Application is the decision in Re Wimpey homes’ Application.319 In that case the applicant developer, George Wimpey Bristol Ltd, obtained planning permission to build 17 houses and garages on grazing land. It commenced installing services in preparation for the construction of the housing development. The objectors’ solicitor drew its attention to a restrictive covenant preventing the erection of any building on the land and asked it to cease doing so. Nevertheless, the company continued to make preparations to build then laid foundations for houses and began to erect buildings over a five-month period. After the objectors commenced court proceedings for an injunction, a large number of workers were transferred to work on a large building near to the centre of the application land. Work on this building continued until a substantial part of the structure had been completed. It was then used for storage of building materials. By the time building works ceased on the application land the company had started construction on all the proposed houses and garages. The developer (and a housing association to whom a small part of the land had been transferred) applied to modify the restriction in the covenant under section 84(1)(aa). The application was rejected on the basis of a finding that the covenant secured practical benefits of substantial advantage and value (a finding

317 (1990) 60 P&CR 354, 367. 318 Ie, one under s 52 of the Town and Country Planning Act 1990: see para 10.8 above. 319 [2011] UKUT 91 (LC).

506

The Upper Tribunal’s powers 16.126 the conduct of the applicant could only encourage if anything). However, in relation to the conduct of the applicant, the Tribunal said: ‘I would add that, if ground (aa) had been made out, it is unlikely that I would have exercised the discretion that I have to modify the covenant. This is because I find on the evidence that the extensive works which Wimpey Homes have carried out on the application land were not an inadvertent action resulting from the discovery of the covenant at a late stage in the development programme. Rather, they were the result of a deliberate strategy of forcing through the development on the restricted land in the face of many objections from those entitled to the benefit of the restriction, to the point where they had so changed the appearance and character of the application land that the Tribunal would be persuaded to allow them to continue with the development. It is appropriate for the Tribunal to make it clear that it is not inclined to reward parties who deliberately flout their legal obligations in this way.’ 16.126 Similarly, in Re Lee’s Application320 (otherwise known as Lee’s Application), where an applicant seeking the modification of a restriction in a covenant against sub-letting had in a variation of his lease only recently (in 2009) expressly confirmed the covenant, and had subsequently sought, and been refused, permission to sub-let but had sub-let anyway in breach, the Tribunal,321 whilst finding ground (aa) was not made out, so that the application failed anyway for that reason, indicated that if it had been established these matters would in any event ‘have been likely to argue quite strongly against an order in his favour’.322 In contrast, is the decision of the Tribunal in Re The Trustees of Green Masjid and Madraah’s Application,323 where both Wimpey Homes’ Application and Lee’s Application cases were distinguished. There, application was made for the modification of a restriction, which prevented land being used other than as a private dwelling house or for a professional use such as that of a doctor. The applicant sought to have it modified to allow use as a mosque. The applicants commenced use of the premises as a mosque and then applied for modification and continued to use the premises in breach of the covenant whilst the application was pending. They claimed they believed the fact that the council, which had the benefit of the covenant, had acknowledged that the use did not require a further planning permission meant that they could expect it to modify the covenant to allow the proposed use. However, the Council had twice refused to do so, as they were aware. The Council had then brought injunction proceedings against them, which were stayed pending an application to the Tribunal to modify the covenant. Notwithstanding this, the applicants pursued and obtained planning permission to erect a single storey side extension to the mosque to provide an area for ablutions, which was then implemented despite the application for modification remaining pending. The Tribunal said the applicants had exacerbated the breach of the covenant (by the impermissible use) in constructing the extension before the application

320 321 322 323

[2012] UKUT 125 (LC). The President, George Bartlett QC. Paragraph 29. [2013] UKUT 355.

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16.127  Modification and discharge pursuant to LPA 1925, s 84(1) had been determined. It considered it was difficult to reconcile the history of what had occurred with the contention the applicants had acted wrongly but in good faith, and considered they were to be described as ‘chancing their arm’ by conduct which constituted a sustained and wilful breach of the covenant. The Tribunal found, however, that the covenant did not secure to the council any practical benefits of substantial value or advantage, and that ground (aa) was made out. It had then to go on to consider the exercise of its discretion whether to grant the modification sought. 16.127 Although the Tribunal referred to the Wimpey Homes Application and Lee’s Application cases, and said ‘Such conduct is to be deprecated’ it noted that what was said therewas obiter since the Tribunal found that there was no jurisdiction for it to modify or discharge the restrictions in any event as the ground relied on had not been established, and said in relation to the application before it that: ‘Having satisfied me on the facts, and on the law as applied to those facts, that the Tribunal has such jurisdiction [under ground (aa)] in this case, I am loath to exercise my discretion so as to deny the applicants the relief that they seek. Where jurisdiction has been established I consider that the discretion of the Tribunal to refuse the application should only be cautiously exercised. It should not be exercised arbitrarily and, in my opinion, should not be exercised as, effectively, a punishment for the applicants’ conduct unless such conduct, in all the circumstances of the case, is shown to be egregious and unconscionable. On balance I do not consider that the applicants’ conduct was so brazen as to justify my refusal of their application.’ In reaching this conclusion as to the exercise of its discretion, the Tribunal said it had taken two factors in particular into consideration as mitigating the applicants’ conduct. First, that the applicants were charitable trustees and were using the property for a religious purpose for which there was on the evidence a significant demand and no alternative venue in the locality, and did not breach the covenant in order to make a profit from the proposed use. Second, the applicants had made the ‘mistake’, of assuming that the existence of planning permission for the proposed use would eventually be determinative of the outcome of a request to modify the restrictive covenant (although that seems from earlier parts of the judgment not to have been thought entirely convincing on the facts). 16.128 In Winter v Traditional & Contemporary Contracts Ltd324 that the applicant had been unaware of the objectors’ right to enforce the covenant until the works were nearing completion was considered to justify the exercise of the discretion in its favour. 16.129 In Millgate Developments Ltd v Smith,325 the Tribunal decided the covenant did secure substantial value or advantage to the objectors, but considered the second limb of section 84(1A) that the restriction was satisfied in that the restriction, in impeding the proposed user, was contrary to the public interest. In that case, there was no evidence the applicant was unaware of the

324 [2008] EGLR 80. 325 [2016] UKUT 515 (LC).

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The Upper Tribunal’s powers 16.132 covenantors’ rights to enforce the covenant but it had already built 13 affordable housing units on the site in question, in breach of covenant. In the light of this, having reviewed the cases, including the Wimpey Homes’ Application and Green Masjid, the Tribunal said that had the application succeeded under the first limb of section 84(1A), it would have found the question of how its discretion should be exercised ‘more difficult’. As it was, however, the application succeeded under the public interest limb of section 84(1A) and the Tribunal said the effect on the 13 families awaiting housing who could use the affordable homes if the modification was made, rather than the houses lying unoccupied, had to be considered, that it would be an ‘unconscionable waste of resources for those houses to remain empty’, and that the public interest in allowing this outweighed considerations in relation to the applicant’s conduct. 16.130 What can be drawn from these cases appears to be as follows. If the ground established is ground (a) (covenant obsolete), the Tribunal is unlikely to consider it appropriate in the judicial exercise of its discretion to withhold modification simply in order to punish the applicant, as the covenant is serving no purpose anyway. Even then, in a very extreme case, involving a flagrant and unforgiveable breach, there may remain the possibility that it could consider that the discretion should not be exercised because of the public interest in maintaining the need for due process, but it is clear that the fact the covenant is serving no purpose will generally lead it to discharge it (the conduct also having had no detrimental effect in such circumstances). 16.131 The same is likely to apply to ground (c) (no injury to the persons entitled to the benefit of the restriction). 16.132 In the case of ground (aa) not being made out on the basis the restriction does secure practical benefits, and is not impeding user contrary to the public interest, the exercise of the discretion will not arise because the covenant will not be within the ground for discharge, but the Tribunal, being human, will be all the more happy to so find if the applicant has sought to steal a march or to have behaved in a high-handed way in ignoring the covenant and the fact the Tribunal’s decision is necessary in order to modify it. Where ground (aa) is made out on the basis the covenant does not secure to persons entitled to the benefit of it any practical benefits of substantial value or advantage to them (ground (aa) by reference to (1A)(a)), the position may be thought to be similar to that where ground (a) (obsoleteness) is made out, though if some practical benefits to objectors exist (even if not ‘substantial’) the Tribunal will need to balance the limited extent of such damage (which is nonetheless damage, which only as a matter of discretion is to result in compensation being awarded rather than the damage being prevented) alongside the nature, extent, and effects of the applicant’s conduct. In other words, it will need to more closely consider whether it is right to exercise its discretion in the applicant’s favour, taking into account all the circumstances. Where ground (aa) is made out on the basis that the restriction, in impeding the proposed user, is contrary to the public interest (ground (aa) by reference to (1A)(b)), it will be necessary for the Tribunal to consider whether the discreditable conduct of the applicant in relation to the covenant is such that it is right as a matter of discretion to refuse to modify it despite, and bearing in mind, the benefits to the public in the modification of the covenant, including 509

16.133  Modification and discharge pursuant to LPA 1925, s 84(1) any effects if it is not modified on people other than the applicant, as well as all other relevant circumstances.

It must not appear that the Tribunal has exercised its discretion unmindful of a relevant factor 16.133 The prime example of this is provided by Ridley v Taylor326 where, as Russell LJ pointed out, the question whether, in a leasehold case, the discretion in respect of new or reaffirmed covenants should be exercised by analogy to section 84(12) ‘was not in the mind of the tribunal’. On that basis, the Court of Appeal unanimously decided to reverse the decision of the Tribunal which had granted the application. However, in the light of the observations made by Ormrod LJ in Jones v Rhys-Jones327 that the factors referred to in Ridley v Taylor were mere guidelines and not rules to be slavishly followed and that the discretion was exclusively that of the Tribunal, it would seem that where a relevant factor is simply overlooked (so that no inevitable conclusion can be drawn as to how the discretion would have been exercised had that factor been in the mind of the Tribunal), the correct course would be for the matter to be remitted to the Tribunal for further consideration.328

Relevant factors of fact329 must be established by admissible evidence 16.134 Thus, in Gee v National Trust for Places of Historic Interest or Natural Beauty,330 the Court of Appeal found the Tribunal’s exercise of its discretion to be fatally flawed since it had been based upon two factors which was unsupported by evidence.331

The further or ancillary discretion The pre-1970 assumed ancillary discretion 16.135 Prior to the amendments in the law which came into effect in 1970, it was by no means uncommon, where the Tribunal granted an application, for conditions to be incorporated in the order controlling the manner in which the development permitted by the order was to be carried out.332 The power to 326 327 328 329

[1965] 1 WLR 611, considered more fully above at para 16.119 (and see also para 16.15). Considered above at para 16.85. See further, para 24.109 below. A relevant factor may be one of law, as where the need arises for the Tribunal to consider whether it should act by analogy to s 84(12). As to this, see para 16.15 above. 330 [1966] 1 WLR 170. 331 Above. The first point submitted was that if the modification sought was made, it might be more difficult for the National Trust to obtain from other landowners similar restrictive covenants which the National Trust is most urgently interested in obtaining in the general public interest. Secondly, it was said that, if the modification were granted, the collection which the National Trust was engaged upon for the purpose of obtaining coastal scenic land (‘Enterprise Neptune’) might be handicapped (see esp pp 176H and 178A). 332 See, eg Re Berridge’s Application (1954) 7 P&CR 125, at 128; Re Fisher’s Application (1954) 7 P&CR 153, at 156; Re Hall & Co Ltd’s Application (1957) 7 P&CR 159, at 161;

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The Upper Tribunal’s powers 16.136 impose such conditions was regarded as ‘implicit in the Tribunal’s discretionary powers’.333 It was exercised independently of any acceptance of the conditions by the applicant334 and the order took immediate effect subject to the conditions. With a few exceptions, the conditions imposed in all the pre-1970 reported decisions were entirely negative.335 Occasionally, the order made by the Tribunal was for the substitution of an entirely new form of restriction for the existing restriction.336

The post-1969 ancillary discretion 16.136 Section 84(1C) which came into operation in 1970337 provides as follows: ‘It is hereby declared that the power conferred by this section to modify a restriction includes power to add such further provisions restricting the user

Re Cowderoy’s Application (1955) 7 P&CR 184, at 186; Re Jamelson Property Co Ltd’s Application (1956) 7 P&CR 253, at 255; Re Campbell’s Application (1958) 9 P&CR 425 at 429; Re Child Bros Ltd’s Application (1958) 10 P&CR 71, at 75; Re North Bedfordshire Association for Moral Welfare’s Application (1959) 10 P&CR 429, at 433; Re Allnatt (London) Ltd’s Application (1959) 12 P&CR 256, at 259; Re Bevan and Williams’ Application (1964) 16 P&CR 92, 95; Re Southend Corpn’s Application (1965) 17 P&CR 55, at 56. 333 See Re John and David Martin Ltd’s Application (1959) 12 P&CR 260, at 262, where the Tribunal (JPC Done FRICS) referred to ‘the control of development implicit in the Tribunal’s discretionary powers’ being able to be left in the hands of the planning authority in cases where there have been no objections to the application or where all objections have been withdrawn. However, in Re Stephens’ Application (1969) 20 P&CR 513, 522, the member of the Tribunal (Sir Michael E Rowe QC) expressed himself as ‘not satisfied that I can properly attach such conditions’. 334 Although the applicant sometimes indicated his willingness to accept conditions. In Re London Investment & Mortgage Co Ltd’s Application (1955) 7 P&CR 194, the Tribunal said that its inclination was that the covenant should be wholly discharged but that as the applicants had expressed themselves as ready to agree to a modification, a draft of which was handed in, the Tribunal decided to ‘modify’ the covenant by substituting a new covenant in the form of the draft. Occasionally also, the applicant would offer an undertaking to carry out certain works, as in Re Morgan’s Application (1960) 11 P&CR 399, 401 (undertaking to construct a continuous fence without any gate along a particular boundary). 335 These exceptions include: Re Morgan’s Application (footnote 332 above); Re Southampton Corpn’s Application (1956) 7 P&CR 237, 238, where a condition was imposed requiring fences surrounding the permitted house and waterworks sub-depot to be at least six-feet high and for part to be built of brick; Re Samuels & Son (Newbury) Ltd’s Application (1961) 13 P&CR 212, 216–217, where a six-foot close-boarded fence was required to be erected and maintained; Re Berridge’s Application (1954) 7 P&CR 125, at 128, where the applicants had entered into an agreement to sell a 21-foot strip of land on which trees and shrubs were growing to the owners of three of the four neighbouring houses which would protect the privacy of the gardens of all four houses. The owners of the fourth house had refused to join in the agreement and persisted in their objection to the application. In granting the application (to allow the erection on back land of a Christian Science church) the Tribunal imposed six conditions of which the last was that the agreement relating to the 21-foot strip must be completed; and Re North Bedfordshire Association for Moral Welfare’s Application (1959) 10 P&CR 429, at 432–433, where a condition of the order coming into effect was that an access road must first have been properly graded cambered and surfaced to the satisfacion of one of the objectors or, in the event of dispute, of a member of the Lands Tribunal. In this case, the basis on which the Tribunal expressed itself as proceeding was that ‘A positive obligation to carry out improvements to the road cannot be incorporated in the order, but the latter can be so drawn that it becomes effective only after the conditions, relating to the access road have been observed.’ 336 See, eg Re London Investment & Mortgage Co Ltd’s Application (1955) 7 P&CR 194 (referred to more fully in footnote 334, above). 337 Having been enacted by the Law of Property Act 1969, s 28(1), Sch 3.

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16.137  Modification and discharge pursuant to LPA 1925, s 84(1) of or the building on the land affected as appear to the [Upper] Tribunal to be reasonable in view of the relaxation of the existing provisions, and as may be accepted by the applicant; and the Lands Tribunal may accordingly refuse to modify a restriction without some such addition.’ So far as can be ascertained from the cases reported in the Property, Planning and Compensation Reports, this ‘declared’ power is not one which the Tribunal had previously dispensed in the exercise of its assumed ancillary discretion and, assuming its pre-1970 existence, the question arises whether its statutory recognition to the exclusion of any wider power signifies that the Tribunal is, after 1969, precluded from continuing to exercise its assumed ancillary discretion the exercise of which went beyond the statutory ‘declared’ power. 16.137 The Tribunal’s previous practice was to impose conditions unilaterally and (unless offered) not by agreement with the applicant, whereas under subsection (1C) the Tribunal is required to obtain the acceptance of the applicant to further restrictive provisions for them to be effective. However, as has been seen, the Tribunal decisions are not unanimous in assuming the existence of any such unilateral power and it is considered that the subsection must be construed on the basis that the only ancillary discretionary power which the Tribunal is recognised as having is that which falls within the limits of the subsection with the result that the wider discretion which the Tribunal had previously exercised without the agreement of the applicant is now excluded. This would, though, still leave it within the power of the Tribunal to accept any undertaking to comply with certain requirements which the applicant might offer.338 This can be advantageous since (unlike further provisions proposed and accepted under section 84(1C)), it can extend to positive acts, although it would be difficult (but not impossible339) to for such a positive obligation to be made be binding upon the applicant’s successors.

The limits of the Tribunal’s ancillary discretion under subsection (1C) 16.138 These appear to be as follows. (1) The discretion is ancillary only to the Tribunal’s power to ‘modify’ a restriction. If a restriction is discharged, there is no discretion under the subsection to impose further provisions.340 This appears to be emphasised 338 As was done in the pre-1970 case of Re Morgan’s Application (1960) 11 P&CR 399, 401. 339 See Chapter 29. 340 In Re Forestmere Properties Ltd’s Application (1980) 41 P&CR 390, the President of the Tribunal (VG Wellings QC) found certain restrictions in a 999-year lease to be obsolete and then made an interim order indicating that he was willing to discharge those restrictions only if the applicant were willing to accept a different restriction. In Re Cox’s Application (1985) 51 P&CR 335, the President (VG Wellings QC) after finding that a set of restrictions had become obsolete, concluded his decision as follows: ‘I shall discharge all the restrictions but I shall substitute for them the restriction following …’ (which was then set out). He added: ‘In the exercise of the Tribunal’s discretion, it appears to me to be right that such discharge and substitution should be made …’ The question whether the Tribunal’s discretion was extensive enough to enable this course to be adopted does not appear to have been raised or considered in either of these cases. It is submitted that if the Tribunal was purporting to rely on its assumed pre-1970 ancillary discretion, then it overlooked the restrictive effect on such discretion of sub-s (1C); whilst if the Tribunal was purporting to rely on the subsection, then it either

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The Upper Tribunal’s powers 16.138 by the fact that the discretion is to ‘add’ further provisions ‘in view of the relaxation of the existing provisions’, all of which prima facie presupposes something being added to a continuing restriction in its ‘relaxed’ form. Whether, in a case where the Tribunal decides that a restriction ought to be modified, the Tribunal is precluded from making an order substituting a new restriction for an existing restriction, is open to argument. On the one hand, it could be argued that if the existing restriction is replaced it would cease to exist and that this amounts to its ‘discharge’ (with the result that subsection (1C) does not apply). Further, a substituted restriction cannot readily be regarded as ‘added’ to the former (replaced) restriction.341 On the other hand, it might be argued that the replacement involves a transmutation and not an extinguishment of the original restriction and that the new form of restriction is an ‘addition’, albeit of a somewhat striking character. This contention would be strengthened if the old restriction was, in part, reproduced in identical form in the new restriction. The moral of this is that if, for reasons of clarity, the Tribunal considers it preferable, after finding that a restriction ought to be modified, to order that this should be done by substituting a new restriction for the old, then its jurisdiction to take this course would appear to be less liable to successful attack342 if the new form of restriction which the applicant is to be invited to accept incorporated some part of the replaced restriction.343 (2) To qualify for the exercise of the ancillary discretion, the further provisions to be added must satisfy the following three requirements: (a) They must be provisions ‘restricting the user of or the building on the land affected’.344 Three points fall to be noted in this connection: (i) In so far as the initial jurisdiction of the Upper Tribunal to discharge or modify restrictions is itself confined to restrictions of this type, it is perhaps not surprising that additional provisions, if added, must be of the same type.345 Here again, however, this represents a restraint on the breadth of ancillary discretion which the Tribunal had exercised before 1970.346

341 342

343

344 345 346

overlooked that the subsection only applies to the power to ‘modify’ (as opposed to discharge) a restriction or, whilst using the language of discharge, was in reality proposing a modification. In the 1955 decision of Re London Investment & Mortgage Co Ltd’s Application (1955) 7 P&CR 194, the Tribunal appears to have regarded the substitute covenant ordered in place of the original covenant as a ‘modification’. An attack might originate not only from disgruntled objectors but also at some time in the future from others whose entitlement to the benefit of the restriction may not have been apparent—bearing in mind that the Tribunal’s order operates in rem and not merely inter partes: see s 84(5). If a restriction is found to be obsolete under paragraph (a), then this would normally suggest a case for its discharge rather than modification and thus preclude the Tribunal from exercising any further discretion under sub-s (1C). But see Re Cox’s Application (1985) 51 P&CR 335, considered in footnote 340 above. The limits of these expressions have been adverted to above, para 1.11 et seq, and covenants falling outside those limits are discussed in Part II of this book. If, for example, if it was open to the Upper Tribunal to impose positive obligations, those obligations would be of uncertain future enforceability and, further, could not be the subject of a future application for modification or discharge to the Upper Tribunal. See above, para 16.135, and Re Berridge’s Application, referred to below. Quaere, whether it is still open to the Tribunal (if it ever properly was) to make an order which, by its terms, only

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16.138  Modification and discharge pursuant to LPA 1925, s 84(1) (ii) It follows that it is not open to the Tribunal to impose positive obligations347 or obligations which are negative but which do not relate to user or building, eg a covenant not to sever the legal ownership of two parcels of land.348 (iii) Any additional provisions must relate to ‘the land affected’ by the relaxation of the restriction. In the pre-1970 decision of Re Berridge’s Application,349 the Tribunal imposed a condition that an agreement for the transfer to certain of the objectors of a 21-foot strip of land adjoining the back fences of their land should be completed. This condition neither related to ‘user’ or ‘building’ nor to ‘the land affected’ by the relaxation of the restriction. A similar provision imposed since 1970 would appear to be ultra vires on both scores.350 (b) The provisions to be added must appear to the Tribunal to be ‘reasonable in view of the relaxation of the existing provisions’. There is no consideration in the reported decisions as to the precise import or limits of this criterion. But it may be noted that the reasonableness of the further provisions is to be measured by the Tribunal solely by reference to the modification envisaged and not by reference to what, apart from the modification, might otherwise be reasonable. The subsection does not confer an opportunity at large for introducing a reasonable regime of restrictions.351 In Re Patten Ltd’s Application,352 an application was made for modification of restrictions affecting backland which precluded

347

348 349 350 351

352

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becomes effective after a condition imposed upon the applicant (falling outside the limits of sub-s (1C)) has been satisfied? As to the pre-1970 position, see ibid, and Re North Bedfordshire Association for Moral Welfare’s Application (1959) 10 P&CR 429. Although there have been at least two reported decisions since 1970 in which orders have been made imposing positive obligations. The first is Re Carter’s Application (1973) 25 P&CR 542 (JD Russell-Davis FRICS) in which the site of the proposed house was required to be lowered by 2 feet, 6 inches or such lesser depth that the ridge would not protrude above the existing ridge line of an adjoining house; the second is Re Kershaw’s Application (1975) 31 P&CR 187 (Douglas Frank QC) where the order required the driveway up to the entrance of the proposed bungalow to be made up before any development was commenced and for the owners for the time being of the proposed bungalow to be responsible in perpetuity for the maintenance of the driveway. Positive conditions of such kinds smack of conditions imposed by planning authorities and, if the views expressed in the text above are correct, appear to be ultra vires the powers of the Lands Tribunal and of no legal effect. Further, in Re O’Reilly’s Application (1993) 66 P&CR 485, 492 (Judge Bernard Marder QC, President) a provision described as a ‘further restriction’ in fact required a covenant imposing a positive obligation on the applicant ‘to retain on the remainder of the application land 27 garages in good condition and suitable for use for garaging private motor vehicles.’ However, as indicated above, if the applicant is prepared to give an undertaking to perform a positive obligation (or to enter into a transaction which would secure the binding force of such an obligation), then this would take effect independently of s 84(1C)and would give rise to no objection on jurisdictional grounds: see Re Morgan’s Application (1960) 11 P&CR 399, 401. As originally covenanted for in Re Cox’s Application (Î985) 51 P&CR 335. (1954) 7 P&CR 125. But it would prima facie be open to the Upper Tribunal to accept an undertaking from the applicant (if freely offered) to make such a transfer, although the manner of its subsequent enforcement may be in some doubt. Whether it would enable the Tribunal to propose words of covenant which would ensure the more effective future enforceability of the modified restriction is extremely doubtful since the emphasis of the subsection is on the content and scope of restrictions rather than the degree of their enforceability. (1975) 31 P&CR 180.

The Upper Tribunal’s powers 16.139 any further housing development, so as to permit the building of 10 houses on the land. The Tribunal concluded, with some hesitation, that it was empowered to grant modification permitting a smaller number of houses ‘on the basis that though relaxing the existing provisions I can add such further provisions restricting the user of or the building on the land as seem to me to be reasonable’ and made a provisional order for modification to permit seven houses if the applicants, within three months, accepted that limit; if they did not, the application would be rejected. Whilst there would seem to be little difficulty in the way of the Tribunal making the order in those terms (provided sufficient opportunity were afforded to the objectors to meet the reduced proposal),353 it is submitted that the discretion to do so cannot be based upon subsection (1C) since the reduction from 10 to seven houses is not an added provision in view of the relaxation of the original restrictions, but simply a scaling down of the relaxation sought; the order permitting seven houses was itself the relaxation.354 (c) The discretion of the Tribunal to add further provisions where existing provisions are relaxed, is subject to such further provisions being ‘accepted by the applicant’. There is no longer (assuming there ever was) a discretion to add further provisions unilaterally. If during the course of the hearing: (i) the Tribunal indicates its likely requirements as to further provisions and the applicant signifies his willingness to accept them; or (ii) the applicant voluntarily indicates his preparedness to accept specified further provisions,355 then there would seem to be no reason why the Tribunal should not, at the end of the hearing, make a final order incorporating the further provisions.356 16.139 However, in other cases, it is necessary for the Tribunal to make an interim order indicating its preparedness to modify the covenant subject to the applicant accepting the further provisions and giving the applicant a period of time in which to make a decision. At the end of that period (which has commonly

353 There have been at least two other cases in which similar action has been taken without reference to sub-s (1C). 354 The point could be important since, if the subsection applies, then it is only the applicant who is concerned to ‘accept’ the further provisions; but if it does not apply then if the objectors’ came armed with evidence directed only to the effects of permitting 10 houses, the Tribunal could hardly make a provisional order permitting seven without giving the objectors an opportunity of calling further evidence to meet that case. In the case cited, the objectors appeared in person and did not argue against the application of the subsection. 355 As in the pre-1970 case of Re London Investment & Mortgage Co Ltd’s Application (1955) 7 P&CR 194. 356 This appears to have been done in Re Cox’s Application (1985) 51 P&CR 335. In that case it was in evidence (at p 341) that the applicant had applied to the covenantee local council to agree to the removal of the relevant covenant and its substitution by an agreement on the part of the applicant that the dwelling in question should be used only for an agricultural worker and (in more precise language to ensure certainty) this was the order which the Tribunal made. In Re Shah’s Application (1991) 62 P&CR 450, 457, further restrictions were imposed by consent of the applicant.

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16.139  Modification and discharge pursuant to LPA 1925, s 84(1) been two or three months) the Tribunal will make a final order either granting the application subject to the addition of the further provisions where the applicant signifies his acceptance or refusing the application where the applicant omits or refuses to accept ‘some such addition’. Having regard to these last words, it would appear that it is only where the applicant’s non-acceptance is to the substance of the addition that the Tribunal’s consequential discretion ‘to refuse to modify a restriction’ arises and that if the applicant indicates acceptance subject to amendments which embellish (and do not prejudice) the substance, then the Tribunal will be likely to grant the application with the addition as so amended.357

357 See the remarks of the President of the Lands Tribunal, VG Wellings QC, in Re Forestmere Properties Ltd’s Application (1980) 41 P&CR 390, at 407–408.

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17 The scope of the Upper Tribunal’s powers under section 84(1) of the Law of Property Act 1925

THE UPPER TRIBUNAL’S POWERS 17.1 The ‘power’1 of the Upper Tribunal (Lands Chamber)2 to order the modification or discharge of a restriction affecting land only arises if a case is made out which satisfies the Tribunal as to the existence of one or more of the grounds set out in section 84(1) of the Law of Property Act 1925 (as amended by the Law of Property Act 1969).3 If one (or more) of those grounds is established then the Tribunal has power, in the exercise of its discretion,4 ‘by order wholly or partially to discharge or modify’ the restriction. 17.2 (i) (ii) (iii) (iv)

By these words, the Tribunal has the following powers: ‘wholly … to discharge … any such restriction’; ‘partially to discharge … any such restriction’; ‘wholly … to … modify … any such restriction’; and ‘partially to … modify any such restriction’.

Each of these will be considered in turn.

(i)  ‘Wholly … to discharge … any such restriction’ 17.3 There are many Tribunal decisions in which a restriction has been discharged in its entirety both as to the content of the restriction and the land to which such restriction originally applied. Such discharges may, without question, properly be described as ‘whole’ discharges of the restriction. 1

2 3 4

The word ‘power’ in s 84(1) of the Law of Property Act 1925 is here being considered in the context of the scope of the orders which the Upper Tribunal has power to make, given that a ground for the making of an order has been made out. It is not concerned with its ‘judicial discretion’ to decide whether to make an order in exercise of such power. As to this and the manner in which the discretion is to be the exercised, see Chapter 16. And previously the Lands Tribunal. Re Henderson’s Conveyance [1940] Ch 835 (Farwell J); Re Ghey and Galton’s Application [1957] 2 QB 650, CA. In each case, a modification of a covenant was set aside on appeal since none of the grounds had been established. As to which, see Chapter 16.

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17.4  Scope of the Upper Tribunal’s powers under LPA 1925, s 84(1) The only matter calling for further comment is that where an order for such a discharge is made it would appear that the Upper Tribunal has no power under section 84(1C) to invite the applicant to accept further restrictive provisions, since the power declared to exist by that subsection is an incident of the power to modify a restriction.5

(ii)  ‘Partially to discharge … any such restriction’ 17.4 Under this head, five possible types of partial ‘discharge’ fall to be considered, namely: (1) discharge of part of the words of a restriction; (2) discharge in respect of one or more (but not all) of the original objects of a restriction; (3) discharge of a severed part of a restriction (which also affects other land now in separate ownership); (4) discharge of a restriction as to part only of the applicant’s land affected by the restriction; and (5) discharge of a restriction for a limited period.

(1) Discharge of part of the words of a restriction, and (2) discharge in respect of one or more (but not all) of the original objects of a restriction 17.5 It is considered that in view of the separate power of the Tribunal ‘wholly or partially to … modify’ a restriction neither amendments of the words of a restriction nor amendments in relation to the objects of a restriction are intended to be covered by this.

(3) Discharge of a severed part of a restriction (the remaining part or parts of which also affects other land now in separate ownership) 17.6 The question of such a discharge will arise where the application relates to the whole of the applicant’s burdened land but where the restriction sought to be discharged was originally imposed under a single covenant on the applicant’s land together with other land. In such a case, it is submitted that on either of two grounds, there is no problem in finding that the Tribunal has power to discharge the restriction in relation to the applicant’s land only. 17.7 The first ground is that, under the general law, the burden of a restrictive covenant originally imposed upon a larger area of land will, on the severance of

5

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Though in Re Forestmere Properties Ltd’s Application (1980) 41 P&CR 390 and Re Cox’s Application (1985) 51 P&CR 335, the Tribunal appears to have made orders both discharging a restriction and purporting to exercise the power declared by s 84(1C). For a consideration of these cases on this point, see para 16.138 above.

The Upper Tribunal’s powers 17.9 the legal or equitable ownership of the land, already have become automatically severed into as many separately enforceable obligations as there are separate owners of the burdened land.6 The result is that the severed parts of the restriction will thereafter have separate operation and effectively have become separate entities. Accordingly, the historical fact that the restriction affecting the application land was originally a single covenant affecting a larger area, rather than—as might have been the case—one of a group of similar covenants affecting the several parts of that area, ought to be immaterial in the context of the Tribunal’s powers. By way of example, if, in Re Greaves’ Application,7 there had originally been one covenant (not to use the land except for allotments) affecting all 105 of the plots for the benefit of other land and the plots had then been sold off subject to the burden of that covenant, there would appear to be no good reason (on the facts of that case) for the Tribunal not being competent to make an order discharging the covenant in respect of the applicant’s plots without discharging it in respect of Mr Chapman’s plots. It is submitted that the problem arising out of this situation can be resolved accordingly without praying in aid the assistance of the above statutory words. 17.8 If, however, the severed restriction should (in the present context) still fall to be regarded as part only of the entity consisting of the original covenant, then the second ground for founding the necessary power is that the reasoning relating to the situation dealt with under (4) below would then be equally applicable to the situation under the present heading. 17.9 The problem being considered appears not to have clearly arisen or been discussed in any of the reported Tribunal decisions. However, in Re Jones’ and White & Co’s Application,8 it does seem to have arisen in the case of the second applicant, White & Co. The facts were that the first applicant, Mrs Jones, was the freeholder of 1.3 acres of land representing the residue of 1.9 acres to which the original covenant related.9 The application related only to 0.425 acres of the 1.3 acres and Mrs Jones had contracted to sell the application land (and presumably only that land) to the second applicant, White & Co. The Tribunal rejected the application on two grounds of which the second was: ‘… we take the view that we have no power to sever “the restriction”. Either it ought to be deemed obsolete as a whole or not at all. In our opinion, we are not empowered to hold that the restriction is obsolete as to part of the land affected by it’. It is respectfully submitted that this view is incorrect on the basis of both the operation of the general law of severance relating to the burden of restrictive covenants (which would apply to the situation of White & Co) and the extent of the powers conferred by section 84(1) (which would apply to the situation of Mrs Jones – considered under heading (4) below). So far as concerned White & Co, the question of the Tribunal severing the restriction did not (on the assumption that they had contracted to purchase only the application land) arise since, as indicated above, severance will already have occurred in equity by virtue of the contract.

6 7 8 9

Above, para 9.5. (1965) 17 P&CR 57 (considered below at para 19.2). (1989) 58 P&CR 512, at 517 (VG Wellings QC and T Hoyes FRICS). So that whilst, as owner of a severed part of the original burdened land, her position fell under the present heading, it will additionally have fallen under situation (D) below.

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17.10  Scope of the Upper Tribunal’s powers under LPA 1925, s 84(1)

(4) Discharge of a restriction as to part only of the applicant’s land affected by the restriction 17.10 The question of such a discharge would arise where an application is made which relates to part only of the applicant’s land, that part and the remainder being subject to the same10 restriction.11 This situation certainly does give rise to the question whether the Upper Tribunal itself has power to sever the burden of a restriction by discharging (or modifying) it as to part only of the land affected, leaving it intact as to the remainder. It is submitted that the statutory words cited above are sufficient to cover this. As appears from a consideration of this issue under headings (1), (2) and (3) above, it is difficult to see how a restriction can be partially discharged otherwise than by way of a discharge in respect of part of the land affected by it.12 In this connection, it is submitted that the words ‘partially to … modify’ are apt to confer power on the Tribunal to modify a restriction by ordering deletions of part of the words of the restriction.13 On the other hand, the words ‘partially to discharge’ a restriction are not apt to cover (and must in any case be presumed not to be merely tautologous in covering) the mere deletion of words from a restriction but, both as a matter of language and context, they are apt to cover the partial discharge of a restriction as a legal or equitable entity. Since the discharge of a restriction as to part of the land affected by it would constitute a partial discharge of the restriction as an entity, it is submitted that the power to order such a discharge falls within the scope the Tribunal’s ‘power’ and that (contrary to the view expressed by the Tribunal in Re Jones’ and White & Co’s Application, referred to above, the Tribunal does have power to sever the burden of a restriction by such a partial discharge.

(5)  Discharge of a restriction for a limited period 17.11 In Re Taroads Ltd’s Application,14 the Tribunal held that the power ‘partially to discharge’ a restriction did not authorise the Tribunal to lift a restriction for a limited time. Although the Tribunal’s expressed reason for this decision leaves scope for speculation,15 it is submitted that the decision is correct. Prima facie, a power ‘partially to discharge’ does not connote a mere

10

Using the word ‘same’ in its strict sense (ie not as meaning merely a restriction in similar terms but a restriction the burden of which attaches by virtue of a single set of circumstances. 11 This was the situation in Re Houdret & Co Ltd’s Application (1989) 58 P&CR 310 where (at p 314) the same Tribunal (VG Wellings QC and T Hoyes FRICS) had, two months previously, expressed ‘some doubt’ whether it had power to deem a restriction affecting the whole of a house to be obsolete in respect of part of the house; but in the event, the question did not arise. It was also the situation of Mrs Jones in Re Jones’ and White & Co’s Application. 12 It might be argued that an additional case would be a limitation on the class of persons bound by the covenant. But quite apart from the fact that it would appear to be debatable whether the Tribunal has power to limit the enforceability of a covenant to a narrower class of persons than those who may, as a matter of law, currently be subject to its burden (see Re Ghey and Galton’s Application [1957] 2 QB 650), it is submitted that any such power would be comprehended (if at all) in the words ‘partially to … modify’. 13 See para 17.14 below. 14 (1951) 7 P&CR 42, at 45. 15 As reported, the sole reason given was: ‘The Tribunal can only effect the actual conditions of the restriction in a material sense’.

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The Upper Tribunal’s powers 17.13 power to suspend a restriction but rather a power to bring about a permanent end to part of a restriction.16

(iii)  ‘Wholly … to … modify … any such restriction’ 17.12 Taken by themselves, these words would seem to authorise the Tribunal to rewrite a restriction. But read in conjunction with the ‘declaratory’ provisions of section 84(1C), it would seem that the words can now only be so construed in the context of a rewriting to which the applicant agrees.17 However, the words do seem sufficiently wide to enable the Tribunal to indicate its preparedness to modify the whole of a restriction by deleting it in its entirety on the basis of the acceptance by the applicant of its replacement by a totally different restriction. As indicated above, section 84(1C) only applies where a restriction is modified. Nevertheless, in both Re Forestmere Properties Ltd’s Application18 and Re Cox’s Application19 the language used by the Tribunal in its order was language which provided for the discharge of restrictions conditionally upon substitute restrictions being accepted. There was no reference in either case to the terms of section 84(1C) and it is submitted that although the language of discharge was used, the Tribunal must (for the orders to have been intra vires) be treated as having made the orders pursuant to its power ‘wholly … to … modify’ the restrictions in the manner provided for by section 84(1C).

(iv)  ‘Partially to … modify any such restriction’ 17.13 Unlike the words ‘partially to discharge’,20 the words ‘partially to … modify’, read in conjunction with the declaratory provisions of section 84(1C), seem entirely apt to include each of the following types of modification: (A) (B) (C) (D)

the deletion of words from a restriction; treating one or more of the objects of a restriction as spent; amending the wording of a restriction; and qualifying the words or objects of a restriction by adding a proviso that they shall not operate to prevent specified development.

In addition, the question arises whether either (or both) of the following forms of modification is permitted by these words: (E) modification of a restriction for a limited period (or temporary modification); and (F) modification of a restriction confined to the applicant (or personal licence).

16 As to whether the power ‘partially to … modify’ a restriction confers a power of suspension, see paras 17.24–17.26. 17 Above, at paras 13.126–13.127. 18 (1980) 41 P&CR 390. 19 (1985) 51 P&CR 335. 20 See heading (ii) above at para 17.4.

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17.14  Scope of the Upper Tribunal’s powers under LPA 1925, s 84(1)

(A)  The deletion of words from a restriction 17.14 Reported decisions of such a modification are few but there seems little doubt but that, in appropriate circumstances, this can be ordered, as, for example, by ordering the removal of the words ‘southern or’ from a covenant ‘not to erect fences on the southern or eastern boundary of the property’.21

(B) Treating one or more of the objects of a restriction as spent 17.15 In Re Associated Property Owners Ltd’s Application,22 restrictions on 4.9 acres confining development to one detached dwelling house to the acre were modified, on the sole ground of the obsoleteness of the restrictions in relation to density and type of housing, so as to permit the erection of 16 detached dwelling houses and 21 flats. The residential object of the restrictions was left unimpaired. Again, in Re Hackney Borough Council’s Application,23 the applicant council sought modification (on the ground, inter alia, of obsoleteness) of restrictions imposed in 1869 restricting the use of a garden square to that of a private garden for the use of the occupiers of the surrounding residences. The modification applied for was one permitting the council to build an open-air theatre on the square. Although the Tribunal found that ‘profound changes’ had taken place in the character of the neighbourhood which enjoyed the benefit of the restrictions, it did not consider them sufficient to justify complete discharge but, on finding that the proposed modification of the use of the square for the purpose of an openair theatre would not injure the persons claiming the benefit of the restrictions, granted the modification sought on all three of the grounds relied on (including obsoleteness). The result was that the restrictions were deemed obsolete as to part of their original objects and scope of operation but remained on foot so far as concerned the remainder of those objects and scope of operation. To similar effect is the decision in Re Forestmere Properties Ltd’s Application,24 where a restriction on the use of a building otherwise than as a cinema was held to have become obsolete so far as the object of its use as a cinema was concerned but where the further object of development control was held not to be obsolete. The Tribunal indicated that it was only willing to ‘discharge’25 the restriction if the applicants were willing to accept a ‘control’ restriction (pursuant to section 84(1C)) which fitted in with the lessors’ general scheme of development control in Hampstead Garden Suburb.26

21 See Re Lee’s Application (1962) 14 P&CR 85 (restriction against use of premises for the sale of wines, spirits or beer ‘to be consumed either on or off the premises or as a club’ modified by deleting the words ‘or off and permitting use as a licensed restaurant or off licence). 22 (1964) 16 P&CR 89. 23 (1957) 7 P&CR 37. 24 (1980) 41 P&CR 390. 25 As to whether the Tribunal’s power to add further restrictions technically arises in the case of a discharge, see above at para 17.3. 26 Another decision of modification of the restrictions, and not their discharge, following a finding that the restrictions ought to be deemed obsolete is Re Chaumel’s Application (1952) 7 P&CR 75.

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The Upper Tribunal’s powers 17.18 17.16 In Re Towner’s and Goddard’s Application27 the Tribunal appeared, however, to question whether it had power to deem a restriction to be obsolete as to part only of its original objects (as opposed to part only of the actual language of the restriction). It said that it did ‘not accept that it is within the power of the … . Tribunal to deem a restriction to be obsolete having regard to its effect rather than to the language in which the restriction is couched’. Following on from this, in Re Lloyd’s and Lloyd’s Application,28 the Tribunal expressed the view that it was not possible to deem a covenant against carrying on any trade or business (except specified ones) as obsolete in so far as it prevented use as a communal care home, since if the covenant ‘cannot be deemed obsolete as a whole, it cannot be deemed obsolete at all’. 17.17 However, the decisions in Re Associated Property Owners Ltd’s Application29 and Re Hackney Borough Council’s Application,30 referred to above,31 where such a power was exercised, were not cited in either of the cases mentioned in paras 1.16 above and the language of section 84(1) of the Law of Property Act 1925 clearly contemplates that there may be either a discharge or a modification of a restriction which is deemed to be obsolete, so that a restriction may be modified as to one or more of its objects, either absolutely (as by the removal of a restriction on the density of housing but not on the prohibition of non-housing development) or to the extent required (and no further) to enable a particular modification to be ordered. 17.18 In Re Afzar’s Application,32 the Tribunal, having cited the view expressed in the first edition of this book that the contrary view expressed in Re Lloyd’s and Lloyd’s Application (and Re Towner’s and Goddard’s Application) was incorrect, declined to follow Re Lloyd’s and Lloyd’s Application, and held in clear terms33 that ‘where modification on ground (a) [of section 84(1)] is sought, the question of obsoleteness falls to be considered in relation to the particular object or objects of the restriction that is or are in issue’.34 The Tribunal also referred to an earlier unreported decision of the Lands Tribunal in Re Marcello Development’s Ltd’s Application35 in which it was similarly said that ‘the question of obsoleteness falls to be considered in relation to the development that is proposed’. Accordingly, a restriction may be deemed to be obsolete as to just one (or more) of its objects so as to enable a particular modification to be ordered.

27 28 29 30 31 32 33 34

35

(1989) 58 P&CR 316 (VG Wellings QC, President). (1993) 66 P&CR 112, at p 122 (HH Judge Marder QC). (1964) 16 P&CR 89. (1951) 7 P&CR 37. At para 17.15. [2002] 1 P&CR 17, at para 39. Ibid, at para 41. Although it then held on the facts of the case that the covenant was not in fact obsolete in requiring low density housing, which low density housing remained the character of the neighbourhood, on an application for a large scale extension to create a 30-bed residential home on the site of such a house. LP/18/1999 and LP/31/2000.

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17.19  Scope of the Upper Tribunal’s powers under LPA 1925, s 84(1)

(C)  Amending the wording of a restriction 17.19 It will be observed that both (A) and (B) above involve modifications by deletion rather than by amendment. However, the word ‘modify’ is prima facie sufficiently wide to authorise the Tribunal to amend the wording of a restriction eg, by substituting ‘four’ for ‘two’ houses permitted to be built to the acre. Thus, in Re Star Cinemas (London) Ltd’s Application36 the Tribunal ordered the words ‘(other than for bingo sessions on not more than three evenings a week)’ to be inserted in the body of a restriction contained in a 99-year lease which otherwise confined the use of a building to that of a cinema. In this connection, it is now implicit in the declaratory provisions of section 84(1C) that the Tribunal has power to modify by way of ‘relaxation of the existing provisions’. 17.20 The Tribunal referred to this in Re University of Westminster’s Application,37 where the President, HH Judge Marder QC, said that the fact the power conferred by section 84(1) is expressed to be ’wholly or partially to discharge or modify a restriction’, coupled with the discretion granted by subsection (1C) to impose such further restrictions on user as appear reasonable in view of the relaxation of the existing provisions, and to refuse to modify a restriction unless such further conditions are accepted, indicated that the Tribunal had full discretion to determine the form and extent of the relief to be granted. In that case, the Tribunal declined to discharge a covenant preventing the use of land other than for the purposes of ‘a School of Management Studies, a College of Architecture and Advanced Building Technology and office for a district surveyor and housing purposes’, but agreed to modify it so as to permit the use of the land (in addition to the permitted uses) ‘for general educational purposes and as a hall of residence for students and for purposes of providing housing accommodation’. The decision was upheld by the Court of Appeal.38 17.21 However, it also seems clear from the provisions of subsection (1C)39 that the power to amend is confined to amendments which relax the restriction and that it does not extend (without acceptance by the applicant) to rewriting the restriction in a way which, whilst partially relaxing it, seeks to qualify the relaxation itself by ‘adding’ further restrictions not covered by the original restriction, for example by substituting ‘four’ for ‘two’ houses but adding ‘provided that the prime cost of each house shall not be less than £60,000’ (a figure not covered by the original restriction).40 17.22 Yet unless the applicant can satisfy the Tribunal that the relaxation asked for will not be capable of being abused (for example by constructing houses of a quality or type which may be out of keeping with the neighbourhood) the applicant’s task will be substantially increased. The usual mechanism by

36 37 38 39 40

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(1969) 21 P&CR 825. (1996) 74 P&CR 86. At (1999) 78 P&CR 82 (where the main issue was what consent could be inferred on the basis of non-response to notices that discharge or modification of the covenant was being sought – see para 21.13 below). Discussed above at paras 16.136–16.139. Cf the pre-1970 decision in Re Child Bros Ltd’s Application (1958) 10 P&CR 71, at p 74.

The Upper Tribunal’s powers 17.25 which the Tribunal can be so satisfied is by suitable qualifications (or additional restrictions) being added on a partial modification in the exercise by the Tribunal of the power considered under para 17.23 below.

(D) Qualifying the words or objects of a restriction by adding a proviso that they shall not operate to prevent specified development 17.23 Rather than seeking an amendment of the actual wording of a restriction, it has been customary, in more recent years, for an applicant to seek modification to enable the application land to be developed in a particular way – usually, although not invariably, by reference to a subsisting planning permission.41 What the applicant seeks is therefore not an unqualified amendment or relaxation of the restriction to enable the development to take place but a relaxation with additional restrictions in so far as the relaxation is geared to the specific requirements of the proposed development. Since the application itself is also geared to those requirements, it inevitably follows that in so far as they involve restrictions which go beyond anything in the original restriction, the applicant has ‘accepted’ them for the purposes of enabling the Tribunal to grant a modification by adding a proviso that, notwithstanding anything in the restrictions, it shall be lawful to use the land for development in accordance with the specific proposals.42 Such an order may therefore be final and not interim.

(E)  Modification of a restriction for a limited period 17.24 In Re Taroads Ltd’s Application43 the applicants owned land subject to restrictive covenants prohibiting use other than for the purpose of a private residence. They sought to have the covenants discharged or modified to enable them to carry on their business of vehicle repair, maintenance and storage in connection with a business, the covenants having earlier been suspended by deed for the duration of the Second World War, and in the alternative asked for the covenants to be ‘partially discharged’ in the sense that they should be wholly suspended until the end of 1952 to enable the applicants to carry on their business while seeking other premises. In relation to this second line of argument, the Tribunal said, at p 45: ‘It was suggested that the word “partially” which occurs in the section of the Act could be applied to time and that therefore the Tribunal has the power to lift a restriction for a limited time. On consideration, I do not think so. The Tribunal can only effect [sic] the actual conditions of the restriction in a material sense.’ 17.25 In Re Independent Television Authority’s Application,44 the applicant authority, which had an interest in land under an agreement for a lease for 5  years with an option for a further 16 years, applied for the modification,

41 42 43 44

See further, para 16.112 above. See, for example, Re C & K Davis’s Application (1955) 7 P&CR 172. (1951) 7 P&CR 42. (1961) 13 P&CR 222, at 225 (Erskine Simes QC).

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17.26  Scope of the Upper Tribunal’s powers under LPA 1925, s 84(1) without limit of time, of a restriction affecting the freehold confining the land to use as a public park or public pleasure ground, so as to permit the erection of a 500-feet high television mast. The Tribunal noted that, ‘the applicant has only a short leasehold interest in the property but seeks, as it must, a modification in the restrictions which may far outlast its interest for it is, I think, clear that the Tribunal has no power to grant a temporary modification (Re Taroads Ltd)’.45 However, assuming that a case giving rise to its jurisdiction were established, there would not seem to be any logical or practical difficulty standing in the way of the Tribunal modifying a restriction by adding a proviso that a similar restriction should nonetheless apply after a particular period. This is particularly so following the introduction of s 84(1C) (as to which, see para 16.136 above). 17.26 It is also not difficult to visualise more general circumstances in which a temporary modification might be appropriate, for example during a national emergency or pending the rebuilding of premises destroyed by fire (which might also have destroyed neighbouring premises intended to be protected).

(F) Modification of a restriction confined to the applicant (or personal licence) 17.27 In Re Ghey and Galton’s Application,46 the Tribunal had made an order modifying restrictions confining the use of Blunt House, Meads Road, Eastbourne, to ‘private dwelling-house only’, to the extent that the Metal Box Co Ltd ‘could be permitted to use “Blunt House” as a convalescent home or rest house for their employees’. On appeal by case stated to the Court of Appeal, Lord Evershed MR (with whose judgment Morris and Pearce LJJ agreed) said: ‘In the view that I take,47 it is unnecessary for me to express a final view on this matter; but starting with a covenant binding the land, the benefit of which runs with the land, I doubt for my part whether it is competent for the tribunal, under cover of modifying the covenant, to give in effect no more than a personal licence to one individual. I think that to do so will, or certainly may in some cases, involve considerable embarrassment hereafter when other persons come and say that they would like a similar privilege.’ 17.28 However, again there would not seem any reason on the face of it why the words in section 84(1) and (1C) would not be wide enough in principle to cover modification of a covenant so as to enable the use of land by a particular person or entity if the nature of the person or entity was such as to justify a modification of the restriction in their favour on account of personal characteristics. 17.29 The argument made, obiter in Ghey and Galton’s Application, against the Tribunal having power to grant a personal licence was the avoidance of ‘embarrassment’ on future applications. This savours of the ‘thin-edge-of-the-wedge’ argument in cases where a covenant affects several properties and the application relates to one property only. However, whilst there might be an overall cumulative effect to be

45 46 47

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(1951) 7 P&CR 42, at 45. [1957] 2 QB 650, at 660–661, CA. That no case had been made out on any of the grounds relied upon.

The Upper Tribunal’s powers 17.31 considered in such cases if discharge or modification of one covenant would lead to modification and discharge of others in order to be consistent, no such considerations would be likely to arise in terms of giving a modification in favour of a particular person on particular site. What the court feared, may however have been that large numbers of people could come forward with applications based on their personal ‘characteristics’ in terms of how they behave and their intentions, which may be difficult on a practical level to gainsay. Furthermore, such things could subsequently change, and it may have felt that this was not what Parliament intended in giving the section 84(1) jurisdiction. 17.30 If so, however, it might in principle be possible to deal with this by acknowledging that it is possible under the wording of section 84(1) to grant a modification limited to a particular person’s period of occupation of the land where it is proved that the relevant paragraph(s) in section 84(1) are satisfied in their personal case, but that it would not be reasonable in the exercise of the Tribunal’s discretion to grant such a modification, where the matters relied on arise out of personal characteristics or intentions that could change, and that it would only be possible to do so in practice where they are practically or legally immutable. 17.31 Interestingly, in Independent Television Authority’s Application,48 where the Tribunal said it thought it clear that it has no power under section 84(1) to grant a temporary modification,49 having found the modification sought (for a 500-feet high mast) was within section 84(1)(c) as being one which would not injure any person with the benefit of the restrictive covenant, it took into account in the exercise of its discretion in favour of modification that the applicant was a public body which required the modification to enable it to perform its statutory duty. However, clearly considering a modification could not be personal to the applicant or time limited, it granted such a modification for all time rather than for the five years remaining of the Authority’s lease, or making a modification that was personal to the Authority, despite its identity and purpose being principal reasons for the exercise of the discretion to allow it, factors that would not be present when it left the site. That also left open the prospect of a different form of ‘tower’ to that found acceptable in terms of appearance, or of the land going to waste, after the Authority left it in just a few years’ time (whereas the restrictions were designed to ensure that it was used for particular public purposes, as the Tribunal acknowledged). It may be thought dubious if this is what Parliament intended and whether such a construction of section 84(1) makes much practical sense as opposed to a lesser degree of modification being possible, in terms of suspension for a particular time or person.

48 49

(1962) 13 P&CR 222. On the basis of Re Taroads Ltd’s Application – see para 17.24 above.

527

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18 The four alternative grounds giving rise to the Upper Tribunal’s powers

THE GROUNDS 18.1 The powers of the Tribunal considered in Chapter 17, and its discretion whether to exercise such powers, considered in Chapter 16, will only arise if the applicant satisfies the Tribunal as to the existence of one or other of the four alternative sets of circumstances set out in section 84(1) and (1A) of the Law of Property Act 1925, as amended by the Law of Property Act 1969. 18.2

These sets of circumstances (or grounds’) are as follows:

‘(1) … (a) that by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the Upper Tribunal may deem material, the restriction ought to be deemed obsolete; or (aa) that (in a case falling within subsection (1A) below) the continued existence thereof would impede some reasonable user of the land for public or private purposes or, as the case may be, would unless modified so impede such user; or (b) that the persons of full age and capacity for the time being or from time to time entitled to the benefit of the restriction, whether in respect of estates in fee simple or any lesser estates or interests in the property to which the benefit of the restriction is annexed, have agreed, either expressly or by implication, by their acts or omissions, to the same being discharged or modified; or (c) that the proposed discharge or modification will not injure the persons entitled to the benefit of the restriction; … (1A) Subsection (1)(aa) above authorises the discharge or modification of a restriction by reference to its impeding some reasonable user of land in any case in which the Upper Tribunal is satisfied that the restriction, in impeding that user, either— (a) does not secure to persons entitled to the benefit of it any practical benefits of substantial value or advantage to them; or (b) is contrary to the public interest; and that money will be an adequate compensation for the loss or disadvantage (if any) which any such person will suffer from the discharge or modification.’ 529

18.3  Four alternative grounds giving rise to Upper Tribunal’s powers

RELATED MATTERS 18.3 Section 84(1) additionally confers power on the Tribunal to direct a successful applicant to pay a ‘sum by way of consideration’ to any person entitled to the benefit of the restriction. Except in connection with subsection (1A), the question of monetary compensation is separate and distinct from the question whether a case is made out for modification or discharge, and this subject is therefore dealt with separately in Chapter 23. 18.4 It will be observed that the word ‘or’ separates each of the four grounds from the others. It would therefore seem that the Tribunal’s power only arises if a case was made out wholly under one or other of the grounds – and not partly under one subsection and partly under another. It was so held by HH Judge Rich QC sitting in the Lands Tribunal in Re Kennet Properties’ Application.1 More recently, in Re Zenios in the Upper Tribunal,2 George Bartlett QC, President, said, ‘It is not sufficient that one ground is made out in relation to one objector and another ground is made out in relation to another’.3 On this basis, it is not, for example, possible for the Tribunal’s powers to arise on the basis of a finding under paragraph (b) that specified persons entitled to the benefit of the restriction had expressly or impliedly, by their acts or omissions, agreed to the discharge or modification, and a finding under subsection (c) that other persons entitled would not be injured thereby.4 18.5 Although this seems to follow from the wording, it appears far from sensible.5 However, in the case of paragraph (b), it could be overcome by a formal effective legal release being entered into prior to the application to discharge being made against anyone else, so that it would only be the question of whether the remaining persons entitled to the benefit of the covenant would be injured by the discharge or modification sought (the others having formally given up the benefit and no longer falling therefore to be considered).6 Leaving this aside, the Tribunal’s powers rest on whether it is satisfied that the case is one which falls wholly under any given paragraph, although it may also be found to fall wholly within more than one subsection.7 Two or more different restrictions, though contained in the same covenant, may also be discharged or modified under different paragraphs.8 Each of the grounds will be considered in the succeeding chapters.

1 2 3 4 5 6 7 8

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(1996) 72 P&CR 353, at p 356. [2010] UKUT 260 (LC), at para 21. Nothing said by the Court of Appeal at [2011] EWCA Civ 1645 on an appeal in the case relating to different points casts any doubt on this statement. Or to modify or discharge on the basis of ground (aa) in the case of some objectors and (c) in the case of others – as referred to by the Tribunal in Re Zenios (above), at para 21. The Law Commission in its 2011 Report. ‘Making Land Work: Easements, Covenants and Profits à Prendre’ (Law Com no 327) recommends amendment to enable different grounds to be satisfied in the case of different persons (see para 33.11(38) below). This will be referred to further in para 21.18 below. The Tribunal has frequently so found. Whether in doing so it is acting surplus to requirements was a question which was raised but left undecided by the Court of Appeal in Re Truman, Hanbury, Buxton & Co Ltd’s Application [1956] 1 QB 261, at 273. See, eg Re Derebb Ltd’s Application [2017] UKUT 0209 (LC).

19 The grounds giving rise to the Upper Tribunal’s powers: paragraph (a)

PARAGRAPH (a) 19.1 Section 84(1)(a) of the Law of Property Act 1925 entitles the Upper Tribunal to discharge or modify a restriction on being satisfied: ‘(a) that by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the Upper Tribunal may deem material, the restriction ought to be deemed obsolete.’

‘BY REASON OF CHANGES IN THE CHARACTER OF THE PROPERTY’ 19.2 The word ‘property’ appears nowhere else in section 84, but the context clearly suggests that it means the property which is the subject of the application. This is the meaning which it has been treated as having in cases where the decision of the Tribunal has been based solely on this ground. For example, in Re Greaves’ Application,1 restrictions imposed in the 1920s confining the use of 9.5 acres of land to use as private allotments were discharged in 1965 on the basis that 90 per cent of the allotments were uncultivated and had become a ‘jungle’. The Tribunal found that although in theory the land could still be used as allotment land, the demand for allotments had ceased with the result that, as a practical matter, ‘if the restrictions were not removed it would remain a jungle’.2 Similarly, in Re Forestmere Properties Ltd’s Application,3 a covenant in a 999-year lease granted in 1931 of a newly-constructed cinema, restricting its

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(1965) 17 P&CR 57. See also, Re W Findlay & Co Ltd’s Application (1963) 15 P&CR 94, where the use since 1929 of buildings as shops on land restricted to private residences was held to have made the restrictions obsolete (the objector unsuccessfully basing his objection on what he described as the applicants’ policy of ‘Do it and you shall have the power’). (1980) 41 P&CR 390, at 391 and 406.

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19.3  Grounds giving rise to Upper Tribunal’s powers: para (a) use to that of a high-class cinema or theatre, was ‘modified’4 on the ground that the cinema itself was obsolete and that it was common ground that there was no prospect that it would ever again be used for any cinematographic or theatrical purpose.5 In each case, the ‘character’ of the property was treated as having changed by reason of its non-use for the permitted purpose coupled with the absence of any prospect in the future of its use for that purpose. To become an anachronism is to undergo a change of character. 19.3 In Re Solarfilms (Sales) Ltd’s Application,6 the Tribunal, in rejecting an application on ground (a) (as well as (aa)), considered separately whether there were changes of character in (i) the application property itself (ii) the properties comprising the estate of which the application property formed part and the wider neighbourhood. It seems clear, however, that in considering (ii), the Tribunal was assessing whether there was a change in the character of a smaller ‘neighbourhood’ consisting of the estate and was not treating the properties comprising the estate as falling within the word ‘property’ in section 84(1). 19.4 The only case giving rise to difficulty in this connection is Re Mansfield District Council’s Application,7 where, on the question whether a restriction against the use of Mansfield Cattle Market otherwise than mainly as a cattle market, the Tribunal treated as irrelevant (if proved) that ‘the use of Mansfield Cattle Market as a cattle market has declined. Market traders have diversified their activities to include motor auctions and other non-agricultural uses. The market buildings are dilapidated and incompatible with modern farming practice. The market is situated close to the centre of Mansfield and there is need for its use to be changed to one which will better serve the interest of the community at large.’ The reason given was that ‘paragraph (a) … is directed not to the land burdened but the land having the benefit of the covenant’. Whilst this reason is correct so far as concerns the test whether the object of the restriction is still capable of being fulfilled,8 it is submitted that, in so far as it was applied to treat as irrelevant evidence as to changes in the character of the burdened property, it is inconsistent with the meaning of ‘the property’ (in the phrase ‘changes in the character of the property’) to which paragraph (a) is directed, as was implicitly adopted in the cases referred to above. 19.5 In deciding whether there is a change in the ‘character’ of the property, it is not enough to show a mere change of physical condition, for example from

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See as to this, para 17.12 above. 1980)41 P&CR 390, at p 391. The application was made on grounds (a), (aa) and (c) but succeeded only on ground (a). In the Scottish case of Caledonian Associated Properties Ltd v East Kilbride Development Corpn (1984) 49 P&CR 410 (Lands Tribunal for Scotland) a ‘cinema’ restriction applying to the cinema part of a complex of premises demised by a 125-year lease, consisting of a cinema, shops and office premises, where the cinema was running at a loss but overall the activities on the demised premises were profitable, was held not to be obsolete under provisions in s 1(3)(a) of the Scottish Act (the Conveyancing and Feudal Reform (Scotland) Act 1970) which are substantially similar (although not identical) to paragraph (a) of s 84(1) of the Law of Property Act 1925, as amended. (1993) 67 P&CR 110, at 113. (1976) 33 P&CR 141, at 143 (Douglas Frank QC). As to which, see below, para 19.22 et seq.

‘Changes in the character of ... the neighbourhood’ 19.6 well-kept land to a neglected state.9 The separation of land from the garden of a house of which it once formed part to a separate plot in different ownership has been held insufficient to amount to obsolescence10 as has the addition of further land.11 Further, changes in the character of land surrounding the property, eg from agricultural to residential, will not affect the character of the property.12

‘BY REASON OF CHANGES IN THE CHARACTER OF … THE NEIGHBOURHOOD’ 19.6 Where reliance is placed on these changes, a systematic approach requires each of the following to be established: (1) the identity of the neighbourhood (‘the original neighbourhood’) at the date referred to in (2) below; (2) the character of the original neighbourhood at the latest of whichever of the following dates may be applicable, namely: (a) the date of the covenant; or (b) the date when the covenant was ‘reaffirmed’;13 or (c) the date when the covenant was previously modified by the Tribunal;14 (3) the identity of the neighbourhood (‘the present neighbourhood’) at the date of the hearing;15 (4) the character of the present neighbourhood at the date of the application16 (or, at the discretion of the Tribunal, at the date of the hearing);17 and (5) differences between the character of the original neighbourhood and the character of the present neighbourhood of a kind which establish changes sufficient to satisfy the Tribunal that the restriction ought to be deemed obsolete.

9 See Re Davies’s Application (1971) 25 P&CR 115, at 133; Re Wilson’s Application (1954) 164 Estates Gazette 269; and, more recently, Re Land at St Catherine’s Road, Ruislip [2016] UKUT 0488 (LC), where the fact that land had become overgrown and ugly was relied on together with the fact the land had formed part of the garden of a house whereas it was now a separate plot in different ownership. The Upper Tribunal said it was ‘not persuaded that short term consideratios such as change in ownership of the application land, nor a change in its current condition give rise to obsolecence’ (para 54). Were it otherwise, encouragement may obviously be given to allowing dereliction in order to seek discharge or modification. 10 Re Lynch [2016] UKUT 0488 (LC). 11 Re Rae’s Application [2016] UKUT 0552 (LC), at para 58. 12 Re Davies’s Application (1971) 25 P&CR 115, at 133. However, such changes may be taken into account as ‘other circumstances’: see below, para 18.46. 13 See above, para 16.91. 14 Re Hedges’ Application (1956) 7 P&CR 270, 273 where the previous modification had been granted in March of the previous year. 15 It is clear that at this date the identity of the neighbourhood may be different from what it was at the earlier relevant date – new development may have enlarged a former enclave: see, for example, Re St Bernards Park Ltd’s Application (1963) 15 P&CR 90 where a new road was built on the fringe of a privately-developed estate which served a new council estate with the consequential aggregation of the two estates into a single neighbourhood. 16 See eg, Re Holmans’ Application (1952) 7 P&CR 56, at 57. 17 In Re Quaffers Ltd’s Application (1988) 56 P&CR 142 the Tribunal saw no difficulty in admitting evidence of events which had occurred after the issue (some six years previously) of the originating application.

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19.7  Grounds giving rise to Upper Tribunal’s powers: para (a) Common to each of these matters is the concept of a ‘neighbourhood’ and attention must first be given to its meaning.

Meaning of ‘neighbourhood’ 19.7 One of the meanings of ‘neighbourhood’ given in the Oxford English Dictionary is: ‘A district or portion of a town, city, or country, esp. considered in reference to the character or circumstances of its inhabitants’. This focuses attention on the character and circumstances of the occupiers of the property in the district rather than on the properties themselves. However, the one will frequently have a direct bearing on the other, property of any one type generally appealing to occupiers of similar character and circumstances.18 Whilst occasionally the Tribunal has emphasised the character of a district by reference to the ‘type’ of its occupiers,19 such references are inevitably based upon inferences from the nature of the property in the district since it will not normally be practicable or appropriate to adduce evidence before the Tribunal as to the character and circumstances of the occupiers of property in the neighbourhood in order to establish the extent and character of the neighbourhood.20 19.8 In Re Davis’ Application,21 the question arose whether building land on both sides of two adjoining parallel roads could be regarded as sufficiently independent of development in adjoining areas to constitute a neighbourhood of its own. In answering this question in the affirmative, the Tribunal expressed the view ‘that provided a neighbourhood is sufficiently clearly defined as to attract to itself and maintain a reputation for quality or amenity the size of that neighbourhood and, within reasonable limits, the progress and nature of the development outside its boundaries is of little consequence’.22 19.9 It is submitted that in the context of section 84(1)(a), and in the light of the approach adopted by the Tribunal in its decisions thereon, ‘neighbourhood’ may be defined as an area of land in a locality which is sufficiently large to

18 Eg, residents or traders; higher income residents or lower income residents, etc. 19 See, eg Re F & H Joyce Ltd’s Application (1956) 7 P&CR 245 where the Tribunal found it ‘impossible to imagine that anyone would settle in this neighbourhood as in fact it has developed if they want a residence with as much land attached as has’ the application land. Also, Re Dolughan’s Application (1951) 7 P&CR 46, at 48 where, on an application to permit the conversion of a large house in Sanderstead, Surrey, into three self-contained flats, the Tribunal observed: ‘… in my view the kind of occupier likely to be attracted by the applicant’s large and well-appointed flats should occasion less apprehension than would those who will submit to sharing a house and its offices while denied the privacy of self-contained accommodation’. The Tribunal also found that the modification sought would not injure persons entitled to the benefit of the covenant which, whilst permitting detached or semi-detached houses, did not permit flats. 20 This could be more readily done in the case of leasehold restrictions affecting the whole neighbourhood, where the history is likely to be available (see, eg Re Knott’s Application (1953) 7 P&CR 100). 21 (1950) 7 P&CR 1, at 5–6. 22 See, also, Re Davies’s Application (1971) 25 P&CR 115, at 131–132, where the Tribunal identified the neighbourhood by adopting the expert evidence of a chartered surveyor who distinguished ‘the neighbourhood’ from a surrounding area on the grounds that they together ‘gave no feeling of a community, or neighbourhood’ and that parts of it had no physical connection.

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‘Changes in the character of ... the neighbourhood’ 19.12 display a set of more or less homogeneous physical characteristics (usually in the form of the layout of the area, the type of its buildings and the use to which those buildings are put) of a kind which is noticeably different from the characteristics exhibited by the surrounding areas.23 19.10 The extent of the area comprising a neighbourhood will accordingly be a question of fact.24 It follows that there is no necessary correlation between the extent of the benefited and burdened land and the extent of the neighbourhood – although a rigidly imposed and enforced system of restrictive covenant control has frequently produced a neighbourhood with clearlydefined characteristics.25 Depending upon the circumstances, a neighbourhood may extend to the whole of a large town26 or consist of a small enclave in the immediate vicinity of the application land27 or even be confined to two plots comprising the only benefited land.28 This passage (in the first edition of this book) was cited with approval by the Upper Tribunal in Re Camstead Limited’s Application.29 19.11

The five matters referred to earlier will now be considered.

(1)  The identity of the original neighbourhood 19.12 In Re Ling’s Application,30 the Tribunal identified a building estate laid out on land formerly comprising Blacketts Farm, Chorley Wood, as the original neighbourhood (and found that since the restriction on the application land had been imposed, houses had been built in that neighbourhood at a density which justified the erection of three houses on the application land instead of the two permitted by the restriction).31 In Re Knott’s Application,32 the President of the Tribunal (Sir William Fitzgerald QC) identified the original neighbourhood affecting No 3 Berkeley Square, London as being confined (for the purposes of his decision) to Berkeley Square and as not extending (as the objectors had contended) to the whole area of Mayfair. Similarly, in Re Southampton Corpn’s Application,33 the Tribunal, in dealing with the claim of changes in the neighbourhood, confined its attention to ‘the near neighbourhood’. 23

See, eg Re Davis’ Application, above, and Re Knott’s Application (1953) 7 P&CR 100, referred to further below. 24 Upon which it is customary for the applicant to call expert evidence prior to the Tribunal making its own inspection of the area. 25 Some of the most well-preserved and clearly-defined neighbourhoods owe their continued existence to such regimes, eg Hampstead Garden Suburb and Dulwich Village. 26 For example, Southampton, as in Re Herbert Ferryman Ltd’s Application (1952) 7 P&CR 69. 27 Re Luton Trade Unionist Club and Institute’s Application (1968) 20 P&CR 1131; Re Hathway’s Application (1968) 20 P&CR 505. 28 Re Bradley Clare Estates Ltd’s Application (1987) 55 P&CR 126 where three plots in The Street, Rustington, West Sussex were subject to restrictions contained in a deed of mutual covenants. 29 (2004) LP/26/2003, at paras 29–30. 30 (1956) 7 P&CR 233. 31 See, also, Re Gateshead County Borough’s Application (1960) 12 P&CR 265, which proceeded on a simliar basis. 32 (1953) 7 P&CR 100. 33 (1956) 7 P&CR 237.

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19.13  Grounds giving rise to Upper Tribunal’s powers: para (a)

(2) The character of the original neighbourhood at the relevant date 19.13 This is a question of fact but, in the absence of substantial redevelopment, may often be deduced from the character of the buildings which existed at or about the relevant date coupled with evidence as to their use. Admissible evidence would include testimony by an individual who could speak from his own knowledge, large-scale Ordnance Survey maps34 and testimony of an expert who had special historical knowledge and could cite the sources of his knowledge. It is possible that an area to which a scheme of covenants was intended to apply never had a particular character – in which case subsequent developments would not represent ‘changes’.35

(3) The identity of the present neighbourhood as at the date of the hearing 19.14 Whilst the original neighbourhood may have been of modest size, subsequent building construction or changes of use outside the original neighbourhood may have enlarged the neighbourhood. If so, then the enlarged neighbourhood represents the current neighbourhood for the purpose of carrying out steps (4) and (5). Whether there has been enlargement is a question of fact which will turn substantially on the evidence of experts and the Tribunal’s impression from its inspection of the area. 19.15 Cases in which the Tribunal found no enlargement include Re Davis’ Application,36 Re Knott’s Application,37 and Re Escritt’s Application.38 But an enlarged neighbourhood was found in Re Herbert Ferryman Ltd’s Application,39 and in Re F & H Joyce Ltd’s Application,40 the Tribunal identified the current neighbourhood as including surrounding land which had been 34 See Re Bevan and Williams’ Application (1964) 16 P&CR 92, at 95. 35 See Re Hickman & Sons Ltd’s Application (1951) 7 P&CR 33 (scheme of private residential development on 24.5 acres never realised). Only two houses were ever built – and one of those was used for a trade or business. Otherwise the land was used for various commercial purposes. Dwelling-house restrictions were discharged as obsolete but not on the ground of ‘changes’ in the character of the neighbourhood. 36 (1950) 7 P&CR 1, at 5–6 (good class houses in two parallel roads and still occupied as private residences remained an unchanged neighbourhood despite surrounding development for non-residential purposes). In arriving at this decision the Tribunal observed: ‘… provided a neighbourhood is sufficiently clearly defined as to attract to itself and maintain a reputation for quality or amenity the size of that neighbourhood and, within reasonable limits, the progress and nature of the development outside its boundaries is of little consequence’. 37 (1953) 7 P&CR 100 (Berkeley Square, London, remained a self-contained neighbourhood – which, however, had undergone fundamental change (from residential to office use)). 38 (1954) 7 P&CR 134, where the construction of a public housing estate outside but adjoining a neighbourhood consisting of land subject to a building scheme was found (following inspection) to have had no material effect. The Tribunal observed: ‘There are circumstances in which such an event could spread a blight over a wide area but inspection of this quite unexceptionable scheme convinces me that the character of the neighbourhood has been affected so slightly, if at all, that the covenants on the common vendor’s estate have not been stultified.’ It is submitted that what the Tribunal was saying was that the building scheme estate and the public housing estate were not, in the circumstances, to be treated as a merged neighbourhood to be assessed as an amalgam. 39 (1952) 7 P&CR 69, at 74, where the original neighbourhood consisted of an estate in the St Denys district of Southampton which, at the time of the application, had become subsumed in the expanded ‘large and busy commercial town’ of Southampton. 40 (1956) 7 P&CR 245.

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‘Changes in the character of ... the neighbourhood’ 19.19 developed since the date when the covenants were imposed (and modified the covenant so as to permit the building of 24 semi-detached houses partly on land restricted by a 1925 covenant to one dwelling house).41 Similarly, in Re St Bernards Park Ltd’s Application,42 the original neighbourhood was treated as ‘materially altered’ by the later construction of a new road serving an adjoining newly-constructed council estate. 19.16 By contrast, in Re Gossip’s Application,43 the applicant contended that the original neighbourhood had been extended so as at least to comprise the whole of the land originally laid out in 117 plots plus a council estate to the west in course of construction and planned to contain 500 dwellings at a density of 12 to the acre. The objectors claimed that the neighbourhood was more property defined as a much smaller rectangle which would exclude the council estate and be confined to part only of the private development. The Tribunal upheld the objectors claim and refused an application for modification of a ‘one dwelling house per plot’ covenant to allow the erection of two additional dwellings on the rear gardens of two of the plots. 19.17 From these two lines of decisions, it is submitted that the following propositions are justified: (a) Where the surrounding development is of the same kind (eg, residential) and quality, the neighbourhood may be treated as correspondingly enlarged, although the Tribunal may well be content (since it would not be material) to confine its attention to the original neighbourhood; (b) Where the surrounding development is of the same kind but of a different quality, then whether the original neighbourhood will be treated as enlarged may well depend upon whether changes in the quality of the original neighbourhood have taken place. If so, and those changes match the quality of the surrounding development, then the neighbourhood will prima facie be treated as enlarged. If not, then the question will be whether, although the two neighbourhoods may remain distinct, the original neighbourhood has been tainted by the new neighbourhood. (c) Where the surrounding development is of a different kind (eg commercial as opposed to residential), then prima facie (unless similar development has taken place within the original neighbourhood) the original neighbourhood will not be enlarged.

Borderline properties 19.18 Difficult questions sometimes arise when two distinct neighbourhoods are identified and the application land is on the borderline – for example, between a residential neighbourhood and a commercial neighbourhood. 19.19 In Re C & K Davis’s Application,44 the application land consisted of two corner sites which bordered on the High Street of Shepperton (which was 41

42 43 44

Similarly, in Re Wreford’s Application (1956) 7 P&CR 257, the Tribunal found that the erection of two houses on a plot restricted to one ‘would be quite consistent with the development which has already taken place in this much sought after area which is in the neighbourhood of Worthing’. (1963) 15 P&CR 90. (1972) 25 P&CR 215. (1957) 7 P&CR 172.

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19.20  Grounds giving rise to Upper Tribunal’s powers: para (a) a purely shopping and business street) and had return frontages to a residential road. The Tribunal took the situation as it was and treated the corner sites as the current line of divide between the shopping neighbourhood and the residential neighbourhood (and modified a residential restriction imposed in 1901 so as to permit the erection of shops with dwelling accommodation over provided that the frontage of the shops did not face the residential road).45 19.20 However, in Re Beech’s Application46 an application to modify a residential restriction so as to permit the use of a house and its garden as an annexe to the adjoining solicitors’ offices and car park was refused. The house stood in the middle of a row of properties, those on one side consisting of residences and those on the other consisting of the solicitors’ offices and shops, but the Tribunal found no case made out for moving the line of divide. Similarly, in Re Davies’s Application,47 the Tribunal refused to modify a restriction against building affecting a site of 2.263 acres which had originally adjoined agricultural land but which had been developed as residential land, even though there was evidence that it would be difficult to let the land for agricultural purposes. But a highly relevant factor in this decision was a finding that the principal object of the restriction was to preserve the peace and quiet and feeling of openness of the benefited land. 19.21 On the other hand, in Re A H Cole (Designs) Ltd’s Application,48 the Tribunal discharged a residential restriction affecting about 225 square yards of land on the fringe of a residential estate in Bromsgrove to enable it to be used as an access by the owners of light industrial premises immediately adjoining the residential area. In this case, however, although six house owners on the residential estate entered objections, none appeared at the hearing and the Tribunal referred to this fact in stating its conclusions.49

(4) The character of the present neighbourhood at the date of the application50 (or, at the discretion of the Tribunal, at the date of the hearing51) 19.22 The exercise of identifying the present neighbourhood automatically provides the lead to identifying the constituent elements which go to make up

45 See, also, Re Notley’s Application (1955) 7 P&CR 157, where the same Tribunal found there was evidence of significant change of conditions in the area of the application land (in Beckenham) since 1898 and modified residential restrictions so as to permit the erection of six shops with maisonettes and garages. 46 (1990) 59 P&CR 502. However, this application related to a house formerly belonging to the covenantee council and purchased under the Housing Act 1985 only some three years prior to the date of the hearing. 47 (1973) 25 P&CR 115. 48 (1963) 15 P&CR 101. 49 See, also, Re Beecham Group Ltd’s Application (1980) 41 P&CR 369 where part of a large site between a playing field and an industrial area was subject to a building restriction which the Tribunal was not satisfied was obsolete but where a modification to permit the construction of a building for the manufacture of vaccines was ordered under paragraph (aa). 50 See, eg Re Holmans’ Application (1952) 7 P&CR 56, at 57. 51 In Re Quaffers Ltd’s Application (1988) 56 P&CR 142 the Tribunal saw no difficulty in admitting evidence of events which had occurred after the issue (some six years previously) of the originating application.

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‘Changes in the character of ... the neighbourhood’ 19.25 its character both in terms of the type of user (or mix of user) and the nature, quality and layout of the buildings. This, of course, demonstrates the importance of establishing the neighbourhood limits since what goes on outside those limits is (in most cases52) irrelevant.53

(5) Differences between the character of the original neighbourhood and the character of the present neighbourhood of a kind which establish changes sufficient to satisfy the Tribunal that the restriction ought to be deemed obsolete 19.23 The only differences in the character of the present neighbourhood as compared with its character at the date of the covenant which are material are those which show that the restriction is now obsolete. It is therefore necessary to consider the meaning of the word ‘obsolete’ in order to determine the nature and magnitude of the differences which are required to be shown to justify the conclusion that the restriction is obsolete.

Meaning of ‘obsolete’ 19.24 The first set of meanings of ‘obsolete’ given in the Oxford English Dictionary54 is: ‘No longer used or practised; outmoded, out of date’. The views expressed by Romer LJ in Re Truman, Hanbury, Buxton & Co Ltd’s Application,55 and in many later Tribunal decisions, show the first two of these meanings to be apposite but the fact that the language of a covenant may be out of date does not affect the continuing validity of the intentions behind it.56 19.25 In Re Truman, Hanbury, Buxton & Co Ltd’s Application, Romer LJ (with whose judgment Lord Evershed MR and Birkett LJ agreed) said (at p 272): ‘It seems to me that the meaning of the term “obsolete” may very well vary according to the subject-matter to which it is applied. Many things have some value, even though they are out of date in kind or in form—for example, motor-cars or bicycles, or things of that kind—but here we are concerned with its application to restrictive covenants as to user, and these covenants are imposed when a building estate is laid out, as was the case here of this

52 Ie, except where a neighbourhood is tainted by the proximity of ‘environmentally unfriendly’ development, such as a sewage works (see Re Herbert Ferryman Ltd’s Application (1952) 7 P&CR 69, at 74) or, perhaps, by the proximity of qualitatively different development, such as a public housing estate adjoining a neighbourhood restricted to small (not less than 30-foot frontages) detached houses (see Re George Reed (Builders) Ltd’s Application (1956) 7 P&CR 227 – modification granted allowing semi-detached houses and bungalows). 53 Compare the evidence which was relevant in Re Davis’ Application (1973) 25 P&CR 115, LT, where a more limited neighbourhood was identified, with that which was relevant in Re F & H Joyce Ltd’s Application (1956) 7 P&CR 245, where an enlarged neighbourhood was identified. 54 Third edition (2004). 55 [1956] 1 QB 261, at 271. 56 See Re Kalsi’s Application (1993) 66 P&CR 313 (HH Judge Marder QC, President); Re Dr Barnardo’s Homes’ Application (1955) 7 P&CR 176, at 180.

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19.26  Grounds giving rise to Upper Tribunal’s powers: para (a) estate in 1898, for the purpose of preserving the character of the estate as a residential area for the mutual benefit of all those who build houses on the estate or subsequently buy them. It seems to me that if, as sometimes happens, the character of an estate as a whole or of a particular part of it gradually changes, a time may come when the purpose [of preserving the character of the estate as a residential area] to which I have referred can no longer be achieved, for what was intended at first to be a residential area has become, either through express or tacit waiver of the covenants, substantially a commercial area. When that time does come, it may be said that the covenants have become obsolete, because their original purpose can no longer be served, and in my opinion, it is in that sense that the word ‘obsolete’ is used in section 84(1)(a).’ [Emphasis added.] In most modern Tribunal cases under paragraph (a) the Tribunal begins by referring to the test of whether a restriction is obsolete as being whether it can still achieve its original purpose, by reference to this case. In it, the Lands Tribunal had found against a restriction, not to use the premises for the purpose of an innkeeper and victualler of wines, spirits or beer, being obsolete on the ground that certain objectors entitled to the benefit of the restriction would be ‘seriously injured’ by the erection and use of on-licensed premises, thus appearing to decide that because a case could not be made out under paragraph (c), the covenant was not obsolete under paragraph (a). The Court of Appeal held that on the basis of the finding that the discharge of the restriction would seriously injure persons entitled to the benefit of the covenant it necessarily followed that the object of the restriction was still capable of fulfilment with the result, in turn, that it could not be described as obsolete. Romer LJ said:57 ‘As I say, I think that the finding that the discharge, which the company are asking for, would seriously injure those persons, renders it almost impossible in itself to say that the covenant has become obsolete in the light of the interpretation which I have given to the word “obsolete”.’ This statement leaves open the question whether if any injury would be suffered, by persons entitled to the benefit of a covenant, as a result of the discharge of the covenant, it is ever possible to say that the object of the covenant could no longer be fulfilled. 19.26 This question arose in Re Luton Trade Unionist Club and Institute Ltd’s Application,58 where 12 lots had been laid out in 1893 and subjected to covenants under a building scheme including one which restricted each lot to a single private dwelling house. At the time of the application (for discharge of the private house restriction) nine of the lots had various commercial and industrial buildings built upon them which were being used as such, two others each had two houses on their frontages the back parts of which were used as a vegetable garden and the twelfth was still a single private dwelling house. The applicants wished to erect club premises with a substantial parking area for cars on the vegetable garden and sought the discharge of the dwelling house

57 58

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Ibid, at p 273. (1969) 20 P&CR 1131 (JS Daniel QC).

‘Changes in the character of ... the neighbourhood’ 19.27 covenant under paragraphs (a) and (c). Three of the objectors were the owners of three of the houses on the frontages of the vegetable garden lots and on the assumption that these objectors were entitled to the benefit of the covenant,59 the Tribunal found: (i) that because of the club’s intended evening activities, those objectors would be injured albeit (by implication) not seriously. The application would therefore not have succeeded under paragraph (c); (ii) that, by reason of the changes in the character of the neighbourhood, the original purpose of the covenants (to create and preserve a small residential estate of good quality low-density houses) had been ‘entirely defeated by events’. The question then arose whether, because of finding (i), the Tribunal was precluded from finding a case made out under paragraph (a). If (as mooted in Re Truman, Hanbury, Buxton & Co Ltd’s Application) ‘obsolete’ in paragraph (a) meant ‘valueless’, then in protecting the three objectors from any injury (disregarding an injury covered by the de minimus principle), the covenants would clearly have some value and they could not be treated as obsolete. However, the Tribunal interpreted certain remarks of Romer LJ in that case as leaving ‘the door open’ for the Tribunal to decide that ‘obsolete’ did not mean ‘absolutely valueless’60 and concluded that, the original purpose of the covenants having been defeated, the injury which would be caused to the three objectors by the club was ‘coincidental’ and did not prevent the Tribunal from being satisfied that the covenant was obsolete. It is respectfully submitted that this conclusion was correct. Paragraph (a) is directing attention not to the question whether the covenant now serves any useful purpose but whether the covenant serves the purpose originally intended.61 19.27 Once the Tribunal had found62 that the purpose of the covenants was ‘to create and preserve, in the area to which they applied, a small residential estate of good quality low-density houses’ and that that purpose had been ‘entirely defeated by events’, then that showed that the covenants were obsolete – the original purpose having become spent. Analysing the Tribunal’s approach, it is difficult to see how the Tribunal could have failed to find that the purpose of the covenants was to create a small residential estate over the whole area but if, by reason of special factors, it had also found that the purpose was not only to preserve such estate as a whole but also to preserve any part or parts of it

59 There was a building scheme and on the basis (assumed at that time to be applicable) that the Tribunal was not qualified to decide whether these objectors had locus standi, it proceeded, in the absence of a reference of that question to the Court, on the assumption that they were entitled to enforce the covenants. As to the question whether, where there is a building scheme, the owner of part of a lot can enforce the covenants against the owner of another part of the same lot, see above, para 8.22(4), footnote 52. In the present case, a negative answer to this question would not, in any event, have excluded the objectors since the vegetable garden straddled the rear land of two lots, and the owner of a house on the frontage of either of those lots would clearly have been entitled to the benefit of the covenants vis à vis the part of the vegetable garden at the rear of the other lot. 60 See the remarks of Romer LJ ibid, at p 272, cited by the Tribunal at p 1139. It is respectfully submitted that the Tribunal’s interpretation is correct. 61 Compare the present day use of a veteran motor vehicle with its original intended use. 62 At p 1137.

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19.28  Grounds giving rise to Upper Tribunal’s powers: para (a) regardless of changes affecting the remainder, then the outcome might well have been different. Under paragraph (a), to ask the question in vacuum whether any person entitled to the benefit of the covenant will be injured (perhaps, even seriously injured) by the discharge, is, at that stage, to ask a question which serves no useful purpose (other than one – if not identified as such -of potential prejudice!). The primary question must always be ‘what was the original purpose of the covenant?’. The answer to this question will then identify the type of injury which the covenant was intended to prevent. If the injury sustained falls outside this type, then it is an injury which is merely ‘coincidental’63 and no impediment to the Tribunal being satisfied that the covenant is obsolete. 19.28 This approach was adopted by the Tribunal in Re Bradley Clare Estates Ltd’s Application,64 where in 1920, the common owner of Nos 2, 12 and 14 The Street, Rustington, Sussex, sold No 14 and mutual restrictions intended to bind and to be for the benefit severally of Nos 2, 12 and 14 The Street, Rustington, Sussex were entered into which provided that one private residence only should be constructed on Nos 2 and 12 combined and one on No 14. One house was built on No 2 and the ownership was severed from No 12. Following subsequent releases by the owner of No 14, a doctor’s surgery of substantial size was built on No 12. The owners of No 14 now sought the discharge of the covenants to enable them to build a number of sheltered housing units for occupation by active, elderly people. The only persons entitled to the benefit of the restrictions were the medical practitioners who owned and occupied the surgery and they objected to the proposed sheltered housing units claiming that their outlook would be destroyed, some of their consulting rooms would be overlooked and they would suffer loss of light. The Tribunal held that the construction of the surgery had destroyed the residential purpose of the mutual covenants and that ‘even if the objectors may suffer some injury resulting from the proposed discharge or modification that will not prevent the restriction being obsolete’.65 19.29 On the other hand, in Re O’Briens’ Application,66 value in the original purpose of the covenant was found to remain where, despite the erection of large numbers of conservatories on houses on the estate of which the application land was part,67 a covenant preventing any such structure (or other extension) was found to still have value in serving the purpose of protecting the benefited land from development that might have a material effect on its visual amenity. This was so notwithstanding that the conservatories and extensions already permitted on the estate did not have any such effect.

63

64 65 66 67

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This is the word used by the Tribunal in the Luton Trade Union Club case, above, at p 1139, to describe the injury caused to the three objectors and as ‘therefore’ not preventing the Tribunal from being satisifed that the covenant was obsolete. Of course, the question of the original object of the covenant (and therefore the type of injury) is not relevant to the question of whether there is injury under paragraph (c) since, that paragraph not being concerned with obsolesence, it is the present impact and effect of the actual words of covenant which is relevant. (1987) 55 P&CR 126. Ibid, at p 130. (2008) LP/8/2005. Over a quarter of them, it seems from para 12 of the judgement.

‘Changes in the character of ... the neighbourhood’ 19.32 19.30 In view of the remarks of Romer LJ in Re Truman, Hanbury, Buxton & Co Ltd’s Application,68 and the decision of the Court in that case, the further question arises whether, if a person entitled to the benefit of a covenant would be seriously injured by its discharge, the covenant can ever be treated as obsolete. Romer LJ said: ‘If serious injury would result to the opponents and others if the covenant was discharged (and having regard to the proposed user for the benefit of motorcoach travellers between Southend and London, it is very easy to imagine the kind of result that would happen), I cannot see how, on any view, the covenant can be described as obsolete, because the object of the covenant is still capable of fulfilment, and the covenant still affords a real protection to those who are entitled to enforce it. As I say, I think that the finding that the discharge, which the company are asking for, would seriously injure these persons, renders it almost impossible in itself to say that the covenant has become obsolete in the light of the interpretation which I have given to the word “obsolete” …’ 19.31 It is to be noted that the above observations were made on the basis that ‘the object of the covenant is still capable of fulfilment’ – and this was manifestly apparent on the facts which were as follows: In 1898, a large building estate at Leigh-on-Sea having a frontage to the London/Southend road was sold off in plots subject to covenants indicating that the whole estate should be residential and including an express covenant that the ‘trade of a hotel keeper, innkeeper, victualler of wines, spirits or beer is not to be carried on upon’ any of the plots. At the time of the application, the buildings on a number of the plots fronting the London Road had for some years been used as shops, including one off-licence. The applicants sought modification of the covenants in respect of two plots fronting the London Road to permit the erection and use of a public house. The gardens of four of the objectors adjoined the applicants’ plots. The Tribunal found that although there had been a change as far as the London Road was concerned, that change did not render the covenant in relation to on-licensed premises obsolete and that the use of such premises by casual visitors travelling by coach or motor-car to or from Southend would seriously interfere with the amenities of those objectors. 19.32 Clearly, in so far as some object, separate and distinct from the object of the residential restrictions, prima facie fell to be attributed to the express covenant relating to the sale of wines, spirits and beer in on-licensed premises, that object was, on the facts, still capable of being fulfilled. In Re Luton Trade Unionist Club and Institute Ltd’s Application69 there was no such express covenant so that there was no specifically prohibited non-residential object (such as a club with a bar) which was still capable of being achieved. This being so, it would seem that even if, instead of a club, the application had been for a public house of the kind envisaged in the Truman case and the three objectors would thereby have suffered serious injury to their amenities, nevertheless such injury would still have been ‘coincidental’ so that there would still have been

68 69

[1956] 1 QB 261, at 272. Above, para 19.26.

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19.33  Grounds giving rise to Upper Tribunal’s powers: para (a) nothing to prevent the Tribunal being satisfied that the residential restrictions were obsolete.70 19.33 The importance (for the purposes of paragraph (a)) of the enquiry into the original purpose of the covenants is further illustrated by Re Quaffers Ltd’s Application.71 There the Tribunal found that the object of covenants against the use of land as an inn, public house, beer house or beer shop was to protect neighbouring land from loss of amenity and not trade competition with the results that: (i) a nearby hotel (which had been constructed on part of the benefited land) and which would, or might, suffer competition, had ceased (as to protection of residential amenity) to be within the scope of the covenants and could not (for the reason given above) claim protection from competition; (ii) by reason of the construction of a motorway network isolating the application land from the remaining residential land, the residential land was no longer effectively protected from loss of residential amenity; and (iii) the object of the covenants having thus been defeated, the restrictions should be discharged as obsolete. 19.34 In Driscoll v Church Comrs for England,72 between 1865 and 1870, the Church Commissioners granted leases for 99 years to different lessees of a number of houses in Croydon subject to a covenant that ‘the premises shall not be used for any trade or business or otherwise than as a private dwelling house save with the previous written consent of the lessor’. The houses were large – 10 rooms or more. Over the years prior to the application, most of them had, with the consent of the lessors, been converted into flats or guest houses but a few were still occupied as private residences. Mr Driscoll had acquired nine of the leases and applied to the Lands Tribunal for the discharge or modification of the covenant so as to permit the demised houses to be used as hostels and residential clubs for Commonwealth students. He contended that by reason of changes in the character of the neighbourhood and other circumstances, the covenant was obsolete. The Lands Tribunal found as a fact that the area was ‘still essentially a residential area’ and rejected the contention. On appeal to the Court of Appeal, the Tribunal’s decision was upheld: per Hodson and Morris LJJ, on the basis that the Tribunal’s finding of fact was sufficient to justify the Tribunal’s conclusion that the covenant was not obsolete, and per Denning LJ and Morris LJJ, on the basis that the covenant still served the purpose (which, per Morris LJ may have been contemplated when the leases were granted) of enabling the lessors to keep control over the use to which the houses were put so as to preserve the character and amenities of the area. 19.35 Driscoll v Church Comrs for England does not appear to have been cited in Re Bents Brewery Co Ltd’s Application73 where the facts found were that the area was at one time a select district of large houses in Liverpool, the bulk of which in the immediate neighbourhood had been converted into flats – there also being two clubs. Notwithstanding that the Tribunal found ‘the area is still residential’ and that the objector lived in ‘one of the remaining private houses’, an application for the modification of restrictions against the erection of any buildings other than dwelling houses so as to permit the construction of

70 Of course, the likelihood of such injury might then have lead the Tribunal, in the exercise its discretion, to refuse the application. 71 (1988) 56 P&CR 142. 72 [1957] 1 QB 330, CA. 73 (1964) 16 P&CR 103.

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‘Changes in the character of ... the neighbourhood’ 19.38 a ‘medium-sized’ (220 square yards) public house with car park was granted. The Tribunal took account of changes in the character of the neighbourhood as revealed by comparing the Ordnance Survey sheet dated 1893 with plans of the same area at the date of the application and expressed the opinion that the modification ‘would not injure anybody’. 19.36 In contrast, in Re Stafford-Flowers’ Application,74 a bungalow on a site of some 278 bungalows was subject to a restriction, like other bungalows, not to use the bungalow other than a holiday bungalow for leisure purposes only and not to occupy or allow the bungalow to be occupied, during certain winter periods. About 70 per cent of the bungalows were unoccupied by holidaymakers even in the summertime, the short-term holiday lets originally taking place had considerably reduced (with the bungalows, where occupied, generally being used as second homes instead), and the on-site leisure facilities had been closed. The Upper Tribunal refused to modify the covenant to remove the restriction on occupation of the bungalows during the prohibited periods because, despite these changes, the site remained a peaceful holiday park the nature of which would ‘change very much for the worse’ if it became a standard residential estate with full-time occupation of the units, and the overnight restriction during the winter periods was ‘the anchor by which the nature of the site can continue to be maintained, and will ensure that it does not eventually become a housing estate, to which it is undoubtedly most unsuited’.75 19.37 Re Barclays Bank plc’s Application76 illustrates that a restriction may be obsolete (and vulnerable as such) even when it was imposed.77 In that case a section 52 agreement78 restricted the occupation of a bungalow to a person employed, or last employed, locally in agriculture or forestry. The Tribunal found that the original object of the restriction was to assist in the process of making a farm development scheme viable. The Tribunal further found that the scheme was not viable from its inception and that it could never have been made viable and held that the restriction ought to be deemed obsolete. 19.38 The relevance of a declared or ascertainable pattern for the grant or refusal of planning permission has already been considered in Chapter 16 in the context of the exercise by the Tribunal of its discretion. But the grant of planning permission will not, in itself, bring about a change in the character of the neighbourhood except to the extent that it is otherwise legally able to be, and is in fact, carried into effect by actual development.79 Re Kalsi’s Application80 demonstrates that the test of obsoleteness of a restriction has nothing to do with its language which, with the passage of time, may have

74 [2015] UKUT 82 (LC). 75 Paragraph 84. The objector management company for the site agreed, however, that the covenant ought to be modified to the limited extent of removing the requirement for ‘holiday purposes’ only, on the basis occupation as second homes for more lengthy periods than that of a normal holiday would not defeat the purpose of the covenant, and it was modified by the Tribunal to that extent. 76 (1990) 60 P&CR 354, at 366. 77 See, also, Re Quaffers Ltd’s Application (1988) 56 P&CR 142. 78 Made under the former Town and Country Planning Act 1971; see now ss 106 and 106A of the Town and Country Planning Act 1990. 79 Cf Wheeler v JJ Saunders Ltd [1995] 2 All ER 697, at 704g–h, 707b, 711h–j, 714c, CA. 80 (1993) 66 P&CR 313.

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19.39  Grounds giving rise to Upper Tribunal’s powers: para (a) become archaic or unsuitable.81 If the restrictions taken as a whole would result in an estate being developed with low-density, high-quality houses, development of such kind may readily be taken to have been the object of the restrictions and if that object can still be achieved then the restrictions will not be treated as obsolete.82

General conclusion 19.39 ●● ●●

What emerges from all the above cases is twofold:

First, that the basic ‘test for obsoleteness is whether the original object of the restriction can still be achieved’.83 Second, when considering whether changes in the character of the neighbourhood have rendered a particular covenant obsolete (especially where it is claimed that one or more persons entitled to the benefit of the restriction would be injured) the cases of Re Truman, Hanbury, Buxton & Co Ltd’s Application; Driscoll v Church Comrs for England; Re Bradley Clare Estates Ltd’s Application; Re Luton Trade Unionist Club’s Application; and Re Quaffers Ltd’s Application, need to be considered as a group in the context of the facts applicable to the case.

Treating a restriction as obsolete for the purposes only of a modification 19.40 Whether injury would be likely to result, and if so to what extent, might well depend upon whether the applicant is seeking a discharge of the covenant or only a modification. The majority of the applications based upon a claim of obsoleteness of the covenant have sought a discharge of the covenant – which necessarily involves showing that none of the original objects of the covenant can now be fulfilled. But in a number of cases, the applicant has sought modification only. Thus, in Re Associated Property Owners Ltd’s Application,84 restrictions on 4.9 acres confining development to one detached dwelling house to the acre were modified, on the sole ground of the obsoleteness of the restrictions in relation to density and type of housing, so as to permit the erection of 16 detached dwelling houses and 21 flats. 19.41 Similarly, in Re Briarwood Estates Ltd,85 when, in 1945, an underlease for 981 years was granted containing a restriction limiting development to three detached or semi-detached dwelling houses, the neighbourhood consisted of large houses in large grounds. The Tribunal found that since then the character

81 Restrictions entered into in 1925 included references to ‘usual motorhouse’, ‘a proper and suitable lodge for the use only of a servant’ and ‘prime cost of not less than £4,400’. 82 See also Re Afzar’s Application [2002] 1 P&CR 17, LT. 83 Per Fox LJ (with whose judgment the other members of the court agreed) in Re Martin’s Application (1988) 57 P&CR 119, citing Re Truman, Hanbury, Buxton & Co Ltd’s Application and Driscoll v Church Comrs for England, above. 84 (1964) 16 P&CR 89 (H P Hobbs FRICS). 85 (1979) 39 P&CR 419 (Sir Douglas Frank QC).

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‘Changes in the character of ... the neighbourhood’ 19.44 of the neighbourhood had changed appreciably in that the grounds of houses had been sold off as sites for modern dwellings. In the context of an application for modification to permit the division into two dwellings of one large house built on the demised premises (in addition to the proposed erection of two houses in the grounds) the Tribunal decided that the restriction ought to be deemed obsolete for the purposes of the modification proposed. In both these cases, the residential object of the restrictions was left unimpaired and the density object was superseded to the extent that that object was found to be obsolete. 19.42 Again, in Re Hackney Borough Council’s Application,86 the applicant council sought modification (on the ground, inter alia, of obsoleteness) of restrictions imposed in 1869 restricting the use of a garden square to that of a private garden for the use of the occupiers of the surrounding residences. The modification applied for was one permitting the council to build an open-air theatre on the square. Although the Tribunal found that ‘profound changes’ had taken place in the character of the neighbourhood which enjoyed the benefit of the restrictions, it did not consider them sufficient to justify complete discharge; but, on finding that the proposed modification of the use of the square for the purpose of an open-air theatre would not injure the persons claiming the benefit of the restrictions, granted the modification sought on all three of the grounds relied on (including obsoleteness). The result was that the restrictions were deemed obsolete as to part of their original objects and scope of operation but remained on foot so far as concerned the remainder of those objects and scope of operation. 19.43 To a similar effect is the decision in Re Forestmere Properties Ltd’s Application,87 where a restriction on the use of a building otherwise than as a cinema was held to have become obsolete so far as the object of its use as a cinema was concerned, but where the further object of development control was held not to be obsolete. The Tribunal indicated that it was only willing to ‘discharge’88 the restriction if the applicants were willing to accept a ‘control’ restriction (pursuant to section 84(1C) which fitted in with the lessors’ general scheme of development control in Hampstead Garden Suburb.89 19.44 As indicated in Chapter 17 above, however, in Re Towner’s and Goddard’s Application,90 the Tribunal appeared to question whether it had power to deem a restriction to be obsolete as to part only of its original objects (as opposed to part only of the actual language of the restriction. Likewise, in Re Fisher & Gimson (Builders) Ltd’s Application,91 and in Re Lloyd’s and Lloyd’s Application,92 where the Tribunal expressed the view that it was not possible to deem a covenant against carrying on any trade or business (except

86 (1951) 7 P&CR 37 (Sir William Fitzgerald KC and JPC Done FRICS). 87 (1980) 41 P&CR 390 (VG Wellings QC). 88 As to whether the Tribunal’s power to add further restrictions technically arises in the case of a discharge, see above, para 16.138. 89 Another decision of modification of the restrictions, and not their discharge, following a finding that the restrictions ought to be deemed obsolete is Re Chaumel’s Application (1952) 7 P&CR 75. 90 (1989) 58 P&CR 316, at 318 (VG Wellings QC, President). 91 (1992) 65 P&CR 312, at 317 (VG Wellings QC, President). 92 (1993) 66 P&CR 112, at 122 (HH Judge Marder QC).

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19.45  Grounds giving rise to Upper Tribunal’s powers: para (a) specified ones) as obsolete in so far as it prevented use as a communal care home, since93 if the covenant ‘cannot be deemed obsolete as a whole, it cannot be deemed obsolete at all’. 19.45 However, the decisions in Re Associated Property Owners Ltd’s Application,94 and Re Hackney Borough Council’s Application,95 referred to above, where such a power was exercised were not cited in any of these three cases and the language of section 84(1) clearly contemplates that there may be either a discharge or a modification of a restriction which is deemed to be obsolete so that a restriction may be modified as to one or more of its objects, either absolutely (as by the removal of a restriction on the density of housing but not on the prohibition of non-housing development) or to the extent required (and no further) to enable a particular modification to be ordered. 19.46 In Re Afzar’s Application,96 the Upper Tribunal, concurred in this view,97 as expressed in the first edition of this book, declined to follow Re Lloyd’s and Lloyd’s Application, and held in clear terms98 that: ‘… where modification on ground (a) is sought, the question of obsoleteness falls to be considered in relation to the particular object or objects of the restriction that is or are in issue.’99 The Tribunal also referred to an earlier unreported decision of the Lands Tribunal in Re Marcello Development’s Ltd’s Application100 in which it was similarly said that ‘the question of obsoleteness falls to be considered in relation to the development that is proposed’. Accordingly,101 a restriction may be deemed to be obsolete as to just one (or more) of its objects so as to enable a particular modification to be ordered.

‘BY REASON OF … OTHER CIRCUMSTANCES OF THE CASE WHICH THE UPPER TRIBUNAL MAY DEEM MATERIAL’ The scope of ‘other circumstances’ 19.47 The first question which arises is whether the ejusdem generis rule applies so as to restrict such circumstances to the same genus as those previously specifically mentioned, namely ‘changes in the character of the property or the neighbourhood’. 93 Relying on the cases of Re Towner’s and Goddard’s Application (1989) 58 P&CR 316 and Re Jones’ and White & Co’s Application (1989) 58 P&CR 512 which, however, were both concerned with the question of severance in respect of part only of the burdened land (as to which, see para 17.9) and not with severance of part of the activities falling within the scope of the restriction. 94 (1964) 16 P&CR 89. 95 (1951) 7 P&CR 37. 96 [2002] 1 P&CR 17. 97 Ibid, at para 39. 98 Ibid, in para 41. 99 Although it then held on the facts of the case that the covenant was not in fact obsolete in requiring low-density housing, which low-density housing remained the character of the neighbourhood, on an application for a large scale extension to create a 30-bed residential home on the site of such a house. 100 LP/18/1999 and LP/31/2000. 101 As again indicated in Chapter 17 above.

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‘Other circumstances which the upper tribunal may deem material’ 19.50 19.48 In Re Abbey Homesteads (Developments) Ltd’s Application,102 the Tribunal, giving its ‘alternative decision’ (on the footing, which it had held was not the case, that a covenant with the South Northamptonshire District Council that ‘An area of 1.3 hectares adjacent to the playing field and amenity open space areas shall be reserved for school purposes’ was a restrictive covenant), held that the restriction affecting the 1.3 hectares had been rendered obsolete by reason of ‘other circumstances’ consisting of the Northampton County Council (which was the education authority) having made a compulsory acquisition order, served a notice to treat, entered upon the land for its educational purposes and been granted planning permission by the district council for such purposes. The result was that the compensation payable to the applicant in respect of the 1.3 hectares would fall to be assessed on the basis that the use of the land was not restricted to educational purposes. On appeal by way of case stated to the Court of Appeal103 it was held by all three Lords Justices: (i) that the covenant was a restrictive covenant; (ii) that it was of unlimited duration; and (iii) that far from its purpose being spent by the ‘other circumstances’ relied upon, it was thereby currently in the course of achievement.104 In addition, Nourse LJ, after referring to paragraph (a) of section 84(1), said:105 ‘The general words must be construed ejusdem generis with the particular words, and it seems to me that the matters relied on by the Lands Tribunal come nowhere near the genus.’ 19.49 On the basis that the rule applies, the genus appears to consist of circumstances relating to the property or the neighbourhood or to the character of other property (such as the benefited land) or the character of another neighbourhood (deemed by the Tribunal to be material) – and those circumstances alone could properly be taken into account. A review of the reported Tribunal decisions where ‘other circumstances’ have been identified and taken into account shows that the Tribunal has substantially confined itself to that genus – the relevant decisions being classifiable under the following heads.

‘Other circumstances’ deemed by the Tribunal to have been material (1)  Character of an adjoining neighbourhood106 19.50 In Re Associated Property Owners Ltd’s Application,107 covenants imposed in 1882 and 1895 restricting the development of 4.9 acres of ground,

102 (1984) 49 P&CR 263. 103 Abbey Homesteads (Development) Ltd v Northamptonshire County Council (1986) 53 P&CR 1 (Lawton, Parker and Nourse LJJ). 104 Notwithstanding this reversal of the Tribunal’s decision, the Tribunal subsequently assessed the compensation payable on the footing that the depreciation in value caused by the restrictive covenant was to be disregarded under the Pointe Gourde principle, see: Abbey Homesteads (Developments) Ltd v Northamptonshire County Council (1990) 61 P&CR 295 (VG Wellings QC, President). 105 Ibid at p 12. 106 As to the meaning of ‘neighbourhood’, see para 19.7 et seq above. 107 (1964) 16 P&CR 89.

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19.51  Grounds giving rise to Upper Tribunal’s powers: para (a) located in what was still a good residential neighbourhood, to one detached house to the acre, were held to have become obsolete in the matter of density and type of dwelling so as to permit a modification of the covenants, by ministerial decisions foreshadowing the imminent development of 51 acres to the west for corporation housing at a density equal to 80 persons to the acre and 108 acres to the south for private housing development at a similar density. On the basis of this degree of obsoleteness the Tribunal modified the covenants so as to permit the erection on the 4.9 acres of 16 detached dwelling houses and 21 flats. Similarly, in Re Hathway’s Application,108 in addition to changes which had taken place on an estate restricted to detached and semi-detached houses, which had originally been developed by the construction of large Edwardian houses, the Tribunal took into account the imminent building of council dwellings a short distance away, and modified the restriction so as to permit (subject to conditions) the demolition of the existing house and its replacement by a three-storey block of flats with garages.109

(2)  Matters relating to the property 19.51 In Re Cox’s Application,110 restrictions linking the occupation of a single storey annexe to the occupation of a house were ‘discharged’111 on both grounds (a) and (c), the restrictions being held to be obsolete having regard (inter alia) to the grant of a 999-year lease of the house and its subsequent occupation by persons unrelated to the owner of the annexe.112 Similarly, in Re Heath’s Application,113 a restriction requiring the submission of plans for approval by the vendors of the Withdean Estate was discharged where the estate had completely broken up and there was no person from whom approval could be sought. Again, in Re Hickman & Sons Ltd’s Application,114 where only two houses had been built on 24.5 acres of land which had been laid out in 179 lots for residential development intended to start in 1934, and a large proportion of the estate (including the six plots comprising the application land) had more recently

108 (1968) 20 P&CR 505. 109 On the other hand, in Re Gossip’s Application (1972) 25 P&CR 215, where the applicant unsuccessfully argued that ‘the neighbourhood’ included a council estate to the west of land which was subject to the building scheme, the council estate appears to have been left out of account altogether and not treated as a ‘material circumstance’. 110 (1985) 51 P&CR 335, at 344. 111 As to whether it was technically a discharge or modification see above, para 16.138, footnote 340. 112 Contrast Re Quartleys’ Application (1989) 58 P&CR 518 where a restriction limiting occupation of a house to a farmworker was held not to be obsolete because of the ‘possibility’ that a farm principal might buy the property for the occupation of one of his workers on a rented basis. As to the distinction between a ‘realistic assessment’ and ‘pure speculation’ in relation to the prospects of the object of a restriction being capable of fulfilment, see, in the context of a somewhat similar question in relation to applications for the discharge of planning conditions, Millbank (Executors) v Secretary of State for the Environment and Rochford District Council (1989) 61 P&CR 11, CA. 113 (1953) 7 P&CR 104. 114 (1951) 7 P&CR 33.

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‘Other circumstances which the upper tribunal may deem material’ 19.55 been zoned in the development plan for industrial purposes, the restrictions were discharged as being ‘obsolete and ineffective’. 19.52 In Re Quaffers Ltd’s Application,115 covenants in standard form which were imposed in conveyances of 1972 and 1974 were found to be ‘obsolete’ from the moment they were imposed since motorway construction and other development close to the application land had, at those dates, already taken place with the result that the rest of the estate could not benefit from the covenants and they were discharged. Similarly, in Re Barclays Bank plc’s Application,116 a restriction confining the occupation of a bungalow to a person employed or last employed in agriculture locally, was found to be ‘not viable from its inception’ and further that ‘it could never have been made viable’ and on the basis of those circumstances the restriction was discharged. Likewise, in Re Houdret & Co Ltd’s Application,117 evidence was adduced of circumstances in an attempt to show that a restriction entered into in 1981 confining the use of a house opposite the town hall in Henley-on-Thames to private residential purposes was ‘doomed’ from the start. Those circumstances included traffic noise (72dBA measured externally), lack of a garden, absence of direct sunlight and inconvenient internal layout. But in the face of evidence from surveyors – on both sides – that notwithstanding these disadvantages the house would be readily saleable for residential user, the Tribunal found that the restriction was and remained viable. 19.53 In Re Mansfield District Council’s Application,118 the Tribunal expressed the view that ‘“other circumstances” refers to physical circumstances and not a change in legal status’. This case is considered further under para 19.56, but it is submitted with respect that there is nothing in paragraph (a) which would exclude non-physical circumstances from qualifying as material. An example of non-physical circumstances affecting the burdened property would be where the only use permitted by the restriction was one which was or became unlawful, for example if land was restricted by covenant to use as professional offices but that use was, or became, unlawful under the planning laws.119 19.54 In such circumstances, it is submitted that it is inconceivable that the Tribunal would find itself unable to take the legal (albeit not physical) unfitness of the property into account in deciding whether the covenant was obsolete. 19.55 This statement was cited by the Upper Tribunal in Re Coombes’ Application,120 where the Tribunal held that the relevant covenants were

115 (1988) 56 P&CR 142. For the facts and decision in greater detail, see above, para 19.33. 116 (1990) 60 P&CR 354. 117 (1989) 58 P&CR 310. 118 (1976) 33 P&CR 141, at 144. 119 Cf Edler v Auerbach [1950] 1 KB 359; Best v Glenville [1960] 1 WLR 1198; Hill v Harris [1965] 2 QB 601. 120 [2012] UKUT 112 (LC).

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19.56  Grounds giving rise to Upper Tribunal’s powers: para (a) imposed to protect the amenity and enjoyment of the Guyzance Estate as a whole, including in relation to sporting rights. That was therefore the purpose of the covenants. The application related to a very small part of the Estate that was retained by the objector (which contained no buildings other than the remains of a priory). The great majority of the Estate had subsequently been sold to a third party, against whom the covenants were unenforceable. This disposal of the great majority of the Estate to such a party was considered to be a material change in circumstance and the covenants did not protect the amenity of the retained land. Accordingly, the covenants were obsolete. The only covenant which was not obsolete was another covenant which protected the eastward extent of any development, which adequately protected the ruins of the priory and its burial ground.

(3)  Changes affecting the benefited land 19.56 In Re Mansfield District Council’s Application,121 the Tribunal appears to have taken the view that the main emphasis of paragraph (a) is directed not to the burdened land but to the benefited land. For the reasons given above,122 this view is considered to be too narrow, in that ‘changes in the property’ in paragraph (a) means changes in the burdened land. However, when it comes to considering ‘other circumstances of the case which the Upper Tribunal may deem material’ in deciding whether the covenant is obsolete, circumstances affecting the benefited land equally clearly form one of the types of ‘other circumstances’ which the Tribunal may deem material to its decision. However, in the Mansfield case the Tribunal rejected a contention that restrictions relating to the Mansfield Cattle Market were obsolete because the benefited land originally consisted largely of tenanted copyhold land in the Manor of Mansfield and that land had, by the Law of Property Act 1922, been enfranchised, adding: ‘Moreover, I think “other circumstances” refers to physical circumstances and not a change in legal status’.123 19.57 It is not clear, however, that all changes in legal status ought to be regarded as irrelevant. If, for example, the use of the benefited premises for some purpose which a restrictive covenant over adjoining land was designed to protect had become illegal, so that there was no longer any purpose to be served by the covenant, it is difficult to see why this would not be sufficient to render the covenant obsolete. 19.58 In Moody v Vercan Ltd124 a fundamental physical change in the character of the benefited land had taken place consisting of the demolition of the bungalow which existed at the date of the covenant and its replacement by a three-storey block of six flats. The Tribunal discharged a covenant affecting the adjoining burdened land which restricted its use to that of a private dwelling house only on the ground that the covenant could no longer serve its original purpose and was therefore obsolete. The Court of Appeal upheld the Tribunal’s decision. 121 122 123 124

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(1976) 33 P&CR 141, at 144. Above, para 19.4. As to this point, see para 19.53 above. [1991] 2 EGLR 288, CA.

‘Other circumstances which the upper tribunal may deem material’ 19.60 19.59 In Waggot v Yip,125 the covenant, for the benefit of the adjoining property of the vendor, was not to use any part of the property conveyed for any purpose other than as offices. At the time, the restriction was imposed the benefited land was owned by the vendor brewery company and operated as a public house. Other restrictions in the conveyance prevented the sale of liquor in any way on the burdened land. The public house on the benefited land ceased trading at some time prior to March 1984 when the benefited land was transferred to the current owner, who obtained planning permission for the conversion of the premises to a restaurant. It was operated as a Chinese restaurant until it ceased trading in 2010, but it remained in the hands of the same owner, Mr Yip. He contended that the restriction was not obsolete in that it conferred on him a valuable benefit in that office users were far less likely than residential occupiers to complain about noise and cooking smells from a restaurant, and he objected to discharge. The Tribunal considered that the restriction of the burdened land to office use was not just to protect the benefited pub land from the risk of commercial competition (which the restriction on the sale of alcohol would have been sufficient to achieve) but to protect the public house business from the risk of complaints from residential occupiers of the adjoining site. However, the Tribunal concluded that this risk ceased to be relevant when the pub closed, on the basis of its assessment that there was on the evidence no realistic prospect of the premises being used as a pub again. Accordingly, it considered the restriction intended to protect that use was redundant. It also considered there was ‘no realistic prospect’ of the objector’s premises again being used as a restaurant. The Tribunal may be considered to have taken a somewhat narrow view in terms of the purpose of the covenant. It may have been thought to have been to allow the use of the benefited land for any purpose free from the risk of complaints from adjoining residential occupants, not confined just to the existing use of it as a pub. The Tribunal, however, went on to say: ‘… even if it is appropriate to consider the purpose of the covenant as being to protect the benefited land, whatever it may be used for, from the risk of objections from residential occupiers, that risk is not currently real. Even if the restaurant were to reopen I am of the view that the levels of noise that might be expected from a small operation like this would be much less likely to lead to complaints than might have been the case under the previous user.’ The Tribunal decided the restriction should be deemed obsolete, and the application thus succeeded under ground (a). 19.60 Again, this may be thought to focus overmuch on the last use, as a small restaurant operation. However, in the current context, the point is that the Tribunal clearly accepted that changes in the benefited land in terms both of the physical conversion of the buildings on them and in relation to their use (though it is considered it is appropriate to consider also the potential use of the land) were relevant to the question of whether the restrictions imposed by the covenant should be considered obsolete.

125 [2017] UKUT 108 (LC).

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19.61  Grounds giving rise to Upper Tribunal’s powers: para (a)

(4)  Loss of the ability for anyone to enforce the covenant 19.61 In Re Land at Sandy Lane, Dee Banks Chester,126 the Deputy President,127 expressly confirmed that if circumstances are such that a covenant has become unenforceable that could justify treating the covenant as obsolete. Accordingly, where there has been acquiescence by the person entitled to the benefit of a covenant, to the extent that no-one is any longer entitled to enforce it,128 that would be sufficient for it to be declared obsolete (this being what was relied on in Sandy Lane, but which was rejected on the facts). 19.62 Similarly, where a covenant requires that no building shall be erected without the consent first of the vendor (ie covenantee) to plans to be submitted in advance, and the demise of the vendor means that the requirement for the approval of the plans is at end,129 this means the covenant is obsolete: see Re Rae’s Application130 where the Upper Tribunal held131 that such a covenant fell to be discharged on ground (a) of section 84(1) of the 1925 Act, the vendor company, whose consent to plans was required, having been dissolved.

‘Other circumstances’ which appear not to be material 19.63 On the basis that the ejusdem generis rule applies to the construction of the statutory words ‘other circumstances’, it follows that the Tribunal should disregard circumstances which fall outside the parameters permitted by the application of that rule.132 These would appear to include the following.

(1)  Planning matters Development plan and pattern of planning permissions 19.64 In determining whether a case is made out under paragraph (aa), the Tribunal is bound to take into account ‘the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas’. But there is no similar requirement in relation to a case under paragraphs (a), (b) or (c).133 The implication is that these matters are not considered as relevant under these paragraphs (unless and until the stage is reached for the exercise by the Tribunal of its discretion) and that they therefore do not qualify as ‘other circumstances’ in paragraph (a).

126 127 128 129 130 131 132 133

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[2016] UKUT 475 (LC), at para 60. Martin Rodger QC, sitting with Peter D McCrea FRICS. As to which, see paras 13.128 and 13.148 above. As to which, see para 11.84 et seq above. Cf where the demise of the vendor means merely that a dispensing power can no longer be exercised, so that the covenant becomes absolute: see para 11.167 above. [2016] UKUT 552 (LC). Ibid, at para 60. As to these parameters, see above, para 19.47 et seq. Although once a case is otherwise made out under any of these paragraphs, in deciding how to exercise its discretion, the same subsection provides that the Tribunal must then consider these planning matters. See, as to this, Chapter 16.

‘Other circumstances which the upper tribunal may deem material’ 19.66

The existence of planning permission for the development of the application land 19.65 The fact that planning permission has been granted for development which a restrictive covenant prohibits can have no direct bearing on whether the covenant is obsolete. The whole raison d’être of restrictive covenants when they first came into common use in the second half of the 19th century was that, without them, the landowner would be at liberty to use his land in any way he pleased. At that time, so far as public law was concerned, land ownership conferred liberty to use the land for any purpose (other than a purpose prohibited by the criminal law) for which the land was physically suitable – and this substantially remained the position in 1926 when section 84(1) came into operation. Accordingly, to demonstrate that there was no public law objection to an owner using his land for the purpose prohibited by a restrictive covenant would be merely to demonstrate the continuance of the raison d’etre of the covenant.134 Since the introduction of universal planning control in 1948,135 the effect of the grant of planning permission is to restore to the landowner part of his former public law freedom already presupposed by the restrictive covenant and the existence of planning permission for the prohibited use can therefore hardly be set up as a basis for discarding the covenant as obsolete: on the contrary, the covenant thereby comes into its own as the effective ban on the use in question. 19.66 Thus, in Re Martin’s Application,136 the Court of Appeal held that the fact that the Secretary of State had, on appeal under the Town and Country Planning Act, granted planning permission for development prohibited by a restrictive covenant entered into in the local planning authority’s favour under section 52 of the Town and Country Planning Act 1971,137 did not render the restrictive covenant obsolete. In the course of his judgment Fox LJ, after referring to planning restrictions and restrictions under restrictive covenants as being subject to two different regimes said:138 ‘It seems to me that, while the two regimes impinge upon each other to some extent, they constitute different systems of control and each has, and retains, an independent existence. In my view, the applicants’ contention is wrong in so far as it suggests that the granting of planning permission by the Secretary of State necessarily involves the result that the Lands Tribunal must discharge the covenant. The granting of planning permission is, it seems to me, merely a circumstance which the Lands Tribunal can and should take into account when exercising its jurisdiction under section 84. To give the grant of planning permission a wider effect is, I think, destructive of the express

134 Similarly, the grant of planning permission does not authorise the commission of a nuisance: Wheeler v JJ Saunders Ltd [1995] 2 All ER 697. Of course in relation to a covenant, the position would be different if, as a result of the revocation of planning permission, or by reason of other circumstances, the only use permitted by a restrictive covenant became unlawful as a matter of public law. 135 Originally by the Town and Country Planning Act 1947. For a radical view of the sweeping change in the nature of land ownership effected by this Act, see Harold Potter, ‘Caveat Emptor, or Conveyancing under the Planning Acts’ (1948) The Conveyancer and Property Lawyer, vol 13, p 37. 136 (1988) 57 P&CR 119, CA. 137 As to which, see para 10.8 above. 138 (1988) 57 P&CR 119, CA, at pp 124–125. Balcombe LJ and Sir Frederick Lawton agreed with Fox LJ’s judgment.

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19.67  Grounds giving rise to Upper Tribunal’s powers: para (a) statutory jurisdiction conferred by section 84. It is for the Tribunal to make up its own mind whether the requirements of section 84 are satisfied. The grant of permission by the Secretary of State is no more conclusive of that than is, for example, the deemed grant of planning permission under the provisions of the General Development Order. All the facts of the case have to be examined by the Lands Tribunal. There is nothing in the Town and Country Planning Acts 1962 or 1971 which suggests that these are intended to interfere in any way with the jurisdiction of the Lands Tribunal under section 84.’ 19.67 It is submitted that the sentence in the above extract ‘The granting of planning permission is, it seems to me, merely a circumstance which the Lands Tribunal can and should take into account when exercising its jurisdiction under section 84’ is intended to emphasise the materiality of the existence of planning permission in the exercise by the Tribunal of its discretion139 once jurisdiction is established and that it is not suggesting that planning permission as such is a material circumstance within the meaning of ‘other circumstances’ in paragraph (a) for the purpose of determining whether it has jurisdiction under that paragraph.140 19.68 Further, the fact that planning permission for the use prohibited by a section 52 agreement under the Town and Country Planning Act 1971 is granted by the local planning authority itself (and not by the Secretary of State on appeal as in Re Martin’s Application), makes no difference – although that permission may provide material relevant to the Tribunal assessing the strength of the local authority’s objections in the course of the Tribunal examining the facts and reaching its own conclusions as to whether one or other of the statutory grounds has been established.141

(2)  The public interest 19.69 In Re Reid’s Application,142 the applicant purchased three allotments which (together with 92 others) were regulated by restrictions prohibiting the keeping of animals on the plots. During the 1939–1945 war, when the enforceability of such restrictions was suspended under Defence

139 See as to this, paras 16.112–16.113 above. 140 Of course, where there are findings of fact and conclusions drawn therefrom in the Secretary of State’s reasoned decision which happen to be relevant to the issues with which the Lands Tribunal is concerned, then if the same facts are established before the Tribunal, it may well treat the Secretary of State’s conclusions from those facts as material to its own conclusions. See, for example, Re Beecham Group Ltd’s Application (1980) 41 P&CR 369, at 380 where, in granting an application on ground (aa) (the Tribunal not being satisfied that paragraph (a) was established) the President of the Tribunal,VG Wellings QC, listed four particular features of the case of which the fourth was: ‘(4) The decision of the Secretary of State. I ask myself why should the Lands Tribunal differ from his very carefully reasoned decision?’. In R v Tunbridge Wells Borough Council, ex p Blue Boys Development Ltd (1989) 59 P&CR 315, Popplewell J held that a determination by the local planning authority under s 53 of the Town and Country Planning Act 1971 (see now s 192 of the 1990 Act) that a particular change of use would not constitute development had no effect on the enforceability by the planning authority of either conditions attached to a previous planning permission or covenants in an existing s 52 agreement. 141 Re Hopcraft’s Application (1993) 66 P&CR 475. See also Re Rasbridge’s Application [2012] UKUT 246 (LC). 142 (1955) 7 P&CR 165.

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‘Other circumstances which the upper tribunal may deem material’ 19.70 Regulation  62B, the applicant built an extensive range of first-class pig sties and other buildings on two of the plots and thereafter reared pigs in a manner so as to minimise their smell. After Regulation 62B had ceased to apply, the applicant claimed the restrictions ought to be deemed obsolete by reason of the continuing national interest in maximising food production. The Tribunal held that such circumstances did not justify treating the restrictions as obsolete.143 19.70 Since this decision, paragraph (aa) now entitles the Tribunal, if the other requirements of that paragraph are satisfied, to discharge or modify a restriction under that paragraph if it is contrary to the public interest, and this would appear to confirm that the public interest, if material at all, is not decisive to a decision under paragraph (a).144

143 The Tribunal was fortified in its view by the fact that Parliament did not make permanent the effect of Regulation 62B in relation to pig-keeping as it had done by s 12 of the Allotments Act 1950 in relation to hens and rabbits. 144 Cf Wheeler v JJ Saunders Ltd [1995] 2 All ER 697, CA (grant of planning permission permitting two pig housing units held not to authorise a nuisance occasioned to an adjoining owner from the resulting smell).

557

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20 Section 84(1) of the Law of Property Act 1925: paragraph (aa)

INTRODUCTION 20.1 As originally enacted, paragraph (a) of section 84(1) enabled a restriction to be discharged or modified where: ●●

●●

by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the Tribunal] may deem material, the restriction ought to be deemed obsolete (the first limb – which has been considered, in Chapter 19); or ‘the continued existence thereof would impede the reasonable user of the land for public or private purposes without securing practical benefits to other persons, or, as the case may be, would unless modified so impede such user’ (the second limb).

However, the second limb was interpreted to mean that where any practical benefits were secured the covenant could not be released, so that it was, ‘in practice … rare for the restriction to be modified or discharged unless it is obsolete or of no value to the person entitled to enjoy its benefits’, as the Lord Chancellor said in introducing the 1969 bill containing amendments.1 In consequence, it was considered the development of land was being frustrated by restrictive covenants or it was being carried out in breach of them, or excessive prices were being paid for release, which led to inflated prices then being charged for developed land when it came to be sold. The amendments were made by the Law of Property Act 1969. Most significantly, (i) ‘some’ was substituted for ‘the’ in the reference to reasonable user, and (ii) the practical benefits secured by the covenant to prevent release were required to be of ‘substantial value or advantage’. 20.2 The provisions of paragraph (aa), and subsections (1A) and (1B), with which it is to be read, are now as follows: ‘(aa) that (in a case falling within subsection (1A) below) the continued existence thereof would impede some reasonable user of the land for public or private purposes or, as the case may be, would unless modified impede such user;’

1

Hansard HL vol 301, col 583.

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20.3  Section 84(1) of Law of Property Act 1925: para (aa) ‘(1A) Subsection (1)(aa) above authorises the discharge or modification of a restriction by reference to its impeding some reasonable user of land in any case in which the Upper Tribunal is satisfied that the restriction, in impeding that user, either (a) does not secure to persons entitled to the benefit of it any practical benefits of substantial value or advantage to them; or (b) is contrary to the public interest; and that money will be an adequate compensation for the loss or disadvantage (if any) which any such person will suffer from the discharge or modification.’ ‘(1B) In determining whether a case is one falling within subsection (1A) above, and in determining whether (in any such case or otherwise) a restriction ought to be discharged or modified, the Upper Tribunal shall take into account the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas, as well as the period at which and context in which the restriction was created or imposed and any other material circumstances.’ 20.3 In Re Bass Ltd’s Application,2 a certain analogy was pointed out between the jurisdiction conferred on the Tribunal by the above provisions and the statutory jurisdiction of the court to grant damages in substitution for an injunction3 – thereby effectively sanctioning a departure from a covenant subject to the payment of a sum by way of damages. However, the analogy cannot be taken too far; amongst other things, the court’s jurisdiction operates only as between the parties whereas an order of the Tribunal operates in rem4 and whilst both jurisdictions are discretionary, the judicial criteria for their exercise are different.5 20.4 The questions for the Tribunal under ground (aa) are often taken by it from Re Bass’s Application (1973) 26 P&CR 156, where they were set out in submissions by Graham Eyre QC, and accepted by the Tribunal to be as follows: Question 1 (under subsection (1)(aa)):

Is the proposed user reasonable?

Question 2 (under subsection (1)(aa)):

Do the covenants impede that user?

Question 3 (under subsection (1A)):

Does impeding the proposed user secure practical benefits to the objectors?

Question 4 (under subsection (1A)(a)):

If the answer to Question 3 is affirmative, are those benefits of substantial value or advantage?

Question 5 (under subsection (1A)(b)):

Is impeding the proposed user contrary to the public interest?

Question 6 (under subsection (1A)):

If the answer to Question 4 is negative, would money be an adequate compensation?

Question 7 (under subsection (1A)):

If the answer to Question 5 above is affirmative, would money be an adequate compensation?

2 3 4 5

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(1973) 26 P&CR 156 (J Stuart Daniel QC). As to which, see above, para 13.81 et seq. Under s 84(5) of the Law of Property Act 1925. As to the exercise of the court’s discretion, see 13.81 et seq; and as to the exercise of the Upper Tribunal’s discretion, see above, para 16.59 et seq.

Is proposed user reasonable (for public/private purposes)? 20.7 20.5 To make out a case under paragraph (aa) the onus is on the applicant to satisfy the Tribunal as to each of the matters relied on. Each of these will be considered in turn.

QUESTION 1: IS THE PROPOSED USER REASONABLE (FOR PUBLIC OR PRIVATE PURPOSES)? Reasonable user 20.6 To establish this, all that has to be shown is that, on the assumption that the restriction did not exist,6 the proposed user is reasonable. It is not necessary to show that, if the restriction remains, there is no reasonable use to which the land can be put.7 20.7 However, the Tribunal must be placed in a position where it can consider the reasonableness or otherwise of the proposal and make an appropriate order and this requires the proposed user to be specified in some detail.8 In Re Glevum Estates (Western Counties)’ Application,9 Sir Douglas Frank QC, President of the Tribunal, said: ‘Perhaps I should add that as a general proposition any applicant seeking to rely upon that paragraph [(aa)] should be armed not only with the planning permission but also with detailed plans of a kind which could be incorporated in an order. What the applicants are in effect asking for is a blank cheque, which I should not have been disposed to grant in any event.’ Separately, it is also important because the onus is on the applicant to provide sufficient information to assess the effects of the proposed development on those entitled to the benefit of the restrictions (to show the restriction, in impeding the proposed user, does not secure any practical benefits or advantage to them): see below, para 20.31 et seq.10 However, provided that detailed plans of the proposal are laid before the Tribunal, the fact that only outline planning permission has been obtained will not necessarily prevent the Tribunal from dealing with the proposal on its merits under paragraph (aa): see Re Whiting’s Application.11 The point made in Re Davies’ Application,12 that on a subsequent planning application the local planning authority might not grant permission in the form sought would need to be borne in mind, however. If, in the absence of such a permission, modification

6 7

8 9 10 11 12

Re Bass Ltd’s Application (1973) 26 P&CR 156, at 158. The Tribunal pointed out that if this assumption is not made, then the question whether the proposed user is reasonable is begged. Under the second limb of the original paragraph (a), it was necessary to show the latter since the wording of the earlier provision was ‘the’ reasonable user of the land, not, as now, ‘some’ reasonable user. As to the meaning of the earlier provision, see Re Ghey and Galton’s Application [1957] 2 QB 650, per Evershed MR at p 653. The same applies, a fortiori, in relation to the determination by the Tribunal of whether the case is one falling within sub-s (1A). LP/53/1972 unreported but referred to, including the cited passage, in Re Lloyds Bank Ltd’s Application (1976) 35 P&CR 128. And the case of Re Davies’ Application (2006) LP/65/2006 there referred to. (1988) 58 P&CR 321. (2006) LP/65/2006.

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20.8  Section 84(1) of Law of Property Act 1925: para (aa) was ordered by the Tribunal in accordance with plans and specification submitted to the Tribunal (as in Re Whiting’s Application, for example), this would not permit anything different in accordance with a subsequent variation at the behest of the planning authority. 20.8 The test of reasonableness in the present context is in part subjective and in part objective. It is considered to be subjective in the sense that all that need be looked at for this purpose is the reasonableness of the proposed user vis-à-vis the applicant’s land, not whether it is reasonable from the point of view of neighbouring owners. In this connection, the effect of the proposed user on certain other persons (namely, persons entitled to the benefit of the restriction) falls to be considered as a separate requirement under subsection (1A) and in view of this requirement it cannot be supposed that the interests of a wider category of persons were intended to be considered independently under the ‘reasonable user’ heading. But the test of reasonableness appears to be objective in the sense that the question is not merely whether the applicant’s proposals represent a reasonable user of the land having regard to the applicant’s personal circumstances, but whether an objective observer would so consider them. This is a question of fact for the Tribunal. Thus, in Re Bass Ltd’s Application,13 the applicant brewery company’s proposal (in relation to land which was restricted by covenants to use as dwelling houses) was for the use of the application land as an additional ‘trunker park’ to its brewery, that is an area into which very large articulated vehicles could be brought for the purpose of their cargoes being loaded and unloaded. The effect of the proposal would be that an additional 48 vehicles would arrive and depart from the application land daily and this additional facility was reasonably required by the applicant. Planning permission had been granted for the proposed use but the development plan placed a good deal of emphasis on the need to relieve traffic congestion.14 One Tribunal witness expressed the view that the proposal seemed to go directly contrary to this policy. Whilst expressing surprise that planning permission had been granted, the Tribunal felt constrained, in the absence of any representative of the planning authority having been called to explain its decision, to treat the planning permission as ‘very persuasive’ that the applicant’s proposal was reasonable. In the course of its decision, the Tribunal observed:15 ‘I would not like it to be thought that the first question arising, that of reasonable user, could always be concluded in the affirmative by the production of a planning permission, but on balance and after some doubt, and assuming that the covenants were not there, I have decided that in the present case the proposal does in all the difficulties of the situation constitute a reasonable user of the land for private purposes.’

13 (1973) 26 P&CR 156. 14 By sub-s (1B), the Tribunal is required to take (inter alia) the development plan into account ‘In determining whether a case is one falling within sub-s (1A) …’ The ‘reasonable user’ requirement is supernumerary to the sub-s (1A) requirements, technically coming in under paragraph (aa) only once the case has been shown to fall under sub-s (1A). Accordingly, whether it is appropriate for the Tribunal to consider the development plan in determining whether what is proposed is a reasonable user seems problematical – certainly it is not obliged to do so under sub-s (1A). 15 (1973) 26 P&CR 156, at p 159.

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Would continued existence [of restriction] impede proposed user? 20.12

‘For public or private purposes’ 20.9 In Re Davies’s Application,16 the observation was made, obiter, that in this context ‘public purposes’ ‘mean proposals by a public authority for the benefit of the public’. 20.10 Where, however, a public authority has statutory power to acquire land compulsorily for a particular public purpose, then any land it acquires for that purpose (whether compulsorily or by private agreement) would automatically not then be impeded by the existence of any restrictive covenant in using the land for that purpose, as the covenants would no longer be enforceable whilst so held.17 Accordingly, it is submitted that it would not be open to a public authority, once it had acquired an interest in the land in the circumstances referred to above, to apply to the Tribunal under paragraph (aa), as it could not validly claim that its proposed user of the land for the public purpose was in any way impeded by the restriction. It would be otherwise if the public authority had no statutory power to acquire the burdened land compulsorily or (if ‘public purposes’ includes purposes of a public character undertaken by private bodies) if the applicant were a private body. 20.11 Apart from the foregoing, it would seem that in applying the words of paragraph (aa), nothing turns on whether the proposed user is for public or private purposes, the use of these words simply making clear that either is sufficient.

QUESTION 2: WOULD THE CONTINUED EXISTENCE [OF THE RESTRICTION] IMPEDE THE PROPOSED USER? 20.12 In order to be able to decide whether the restriction would impede the proposed user, the Tribunal must be furnished with the following: (a) Particulars of the restriction(s) In Re Fisher & Gimson (Builders) Ltd’s Application,18 the applicants had built a dwelling house and separate garage with snooker room and bedroom above on a third of an acre of land in breach of a covenant imposed in a conveyance of 1950 that the land should only be used as garden land. Proceedings by the objectors for a mandatory injunction to have the buildings pulled down had been adjourned pending the outcome of the present application for retrospective discharge or modification to allow the buildings to remain. The Tribunal made the required modification under paragraph (aa) but pointed out that the objectors might still seek a remedy in respect of a restriction against annoyance, nuisance or damage to the benefited land contained in a conveyance of 1905, no relief from which was asked for in the application.

16 17 18

(1971) 25 P&CR 115, at 134. See para 10.37 et seq. (1992) 65 P&CR 312.

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20.13  Section 84(1) of Law of Property Act 1925: para (aa) (b) Sufficient details of the proposed user to enable the Tribunal to determine whether the restriction would bite on it An example of the scope of the facts required to be proved in order to show that the restrictions in question would bite is provided by Re Lloyds Bank Ltd’s Application.19 In that case, there were two restrictions, one against building and the other against user for any purpose which might cause annoyance to the occupiers of the benefited land. The applicant sought discharge or modification of both restrictions to enable the application land to be used simply ‘for residential development’20 for which there was no planning permission or specific project of development. The Tribunal held that in the absence of a specific proposal for development of the application land, it could not be said that the continued existence of the restrictions would impede that development. Whilst ‘residential development’ simpliciter might have been impeded by the building restriction, it could not be said, in the absence of details, whether such development would be impeded by the ‘annoyance’ restriction. (c) Evidence that, apart from the restriction, the proposed user would not otherwise be prevented This is prima facie required in order to show that the restriction itself ‘would impede’ the user.Thus, if planning permission is required for the proposed user but has not been obtained, the Tribunal may not be satisfied that the continuance of the restriction itself would impede the user. Again, if two separate covenants prohibited the user, but discharge or modification was sought only in respect of one of them, the Tribunal might similarly not be satisfied.21

QUESTION 3: DOES IMPEDING THE PROPOSED USER NOT SECURE PRACTICAL BENEFITS TO THE PERSONS ENTITLED TO THE BENEFIT OF IT? 20.13 This question relating to paragraph (aa) arises by reason of section 84(1A)(a). The way paragraph (aa) is drawn makes clear the onus is on the applicant to satisfy the Tribunal as to the absence of any such practical benefits. 20.14 To do this, the applicant must place evidence before the Tribunal to enable it to answer each of the following sub-questions, namely: (1) Who (for the purposes of the provision) are the ‘persons entitled to the benefit of’ the restriction?

19 (1976) 35 P&CR 128. 20 The headnote refers to ‘a house’ but the decision refers only to ‘residential development’. 21 In Re London Trade Unionist Club and Institute Ltd’s Application (1969) 20 P&CR 1131, the Tribunal was hesitant about exercising its discretion to discharge a covenant which it found to be obsolete when another covenant would still remain which would preclude the proposed development. But no question under the present paragraph (or its predecessor in the shape of the second limb of the original paragraph (a) arose. The point did potentially arise in Re Fisher & Gimson (Builders) Ltd’s Application (1992) 65 P&CR 312 but was not referred to. In that case (referred to above), the second covenant (against nuisance or annoyance etc) might or might not have impeded the retention of the offending buildings.

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Does impeding proposed user not secure benefits etc? 20.16 (2) In impeding the proposed user, does the restriction secure ‘practical benefits’ to those persons? In this connection, subsection (1B) requires the Tribunal to ‘take into account the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas, as well as the period at which and context in which the restriction was created or imposed and any other material circumstances’. Evidence as to these matters must accordingly be adduced. The scope of these factors has already been considered in detail in Chapter 16 in relation to the exercise of the Tribunal’s discretion. Their relevance in the context of the present enquiry is clearly confined to sub-question(2) above.22 Their impact, if any, will naturally depend upon the facts in each case,23 and the obligation of the Tribunal is, in any event, merely to ‘take into account’ such factors.

(1) Who (for the purposes of the provision) are the ‘persons entitled to the benefit of the restriction? 20.15 Whilst the observance of a restrictive covenant may in fact benefit persons who own land in the area of the burdened land, only those persons (if any) who, as a matter of technical law, have a right to enforce it are ‘entitled to the benefit of it’. The diverse ways in which a person may become so entitled are dealt with in detail in Chapters 2 to 8 inclusive. 20.16 If the applicant relies on paragraph (aa) the onus is on him to satisfy the Tribunal as to the categories of persons who appear to be entitled and, so far as practicable, their identities so as to enable the Tribunal to determine whether or not the restriction secures any of the specified benefits to such persons. However, so far as concerns all such persons who have been served with notice of the application and who do not object either in writing or by appearing before the Tribunal, the Tribunal has in practice usually accepted thereby that the restriction does not secure any practical benefit of substantial value or advantage to them so that the Tribunal need not take those persons into account under paragraph (aa).

22 It is also, of course, relevant to Question 4 below as to whether the benefits are ‘of substantial benefit or advantage’ to the persons entitled to those benefits of the covenant (as to which, see para 20.35 below et seq below). Their relevance clearly does not extend to the question as to who are the persons entitled to the benefit of the restriction. Further, the question whether the proposed user is reasonable falls under sub-s (1)(aa) and forms the presupposition for (and not part of) the ‘case’ as to which the Tribunal is required to be satisfied under sub-s (1 A). However, in determining, at large, whether the proposed use is reasonable, the planning and other considerations referred to in sub-s (1B) may well be relevant in any particular case: see, eg, Re Bass Ltd’s Application (1973) 26 P&CR 156, where the Tribunal said at p 158; ‘It is difficult in the face of these [planning] permissions to say that the proposal is not a reasonable user.’ Subsection (1B) does, of course, apply in relation to the alternative question posed by sub-s (1A)(b) (considered below at para 20.54 et seq), namely, whether in impeding the proposed use, the restriction is contrary to the public interest. 23 Compare, for example, Re Bass Ltd’s Application (1973) 26 P&CR 156, at 160 with Re Beecham Group Ltd’s Application (1980) 41 P&CR 369, at 380.

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20.17  Section 84(1) of Law of Property Act 1925: para (aa) The Tribunal will need to consider with care, however, what the objectors’ failure to pursue objections can fairly be taken to mean: see Re University of Westminster’s Application.24 Another approach to treating the restriction as not securing any benefit of substantial value or advantage on the basis of no-one served with notice having come forward to object is to treat such persons as having impliedly consented to the discharge or modification of the restriction under ground (b).25 In the University of Westminster case, where consideration of both paragraph (aa) and paragraph (b) arose, the Tribunal made clear that care needs to be taken in drawing conclusions as to what the non-pursuit of objections actually means, as did the Court of Appeal.26 20.17

The practical result of the above appears to be as follows:

(a) If the Tribunal is satisfied that all persons who may reasonably be supposed to be entitled to the benefit of the restriction have been duly served with notice of the application, the Tribunal may, depending on the circumstances, be satisfied that ‘persons entitled to the benefit of the restriction’ other than those who persist in their objections before the Tribunal, will not have any practical benefit of substantial value or advantage to them, so that it will only be the persons who pursue objections that it will in practical terms be concerned with. (b) If it should appear to the Tribunal that there may be persons entitled to the benefit of the restriction apart from those who have been identified and served with notice of the application, it is submitted that the Tribunal would also be concerned with those persons in the present context.27

(2) In impeding the proposed user, does the restriction not secure ‘practical benefits’ to those persons? 20.18 In the first place, it is to be observed that the restriction will only ‘secure’ a benefit if that benefit results directly from the observance of its terms.28 Thus, a benefit consisting of the price which might be paid for a release or modification of a restriction is not one which is derived from its observance and so cannot feature as a ‘practical benefit’ under subsection (1A)(a). 24 (1999) 78 P&CR 82); see para 21.13 below. 25 See Re Fettishaw’s Application (No 2) (1973) 27 P&CR 292, at p 293. 26 There, the notice delivered to potential objectors, and the form of application seeking discharge or alternatively modification, made plain that the applicant intended to continue to use the premises in question for educational purposes, albeit for wider educational purposes than those permitted by the covenant. No-one came forward to object, but the Tribunal emphasised the need for care in drawing conclusions as to what potential objectors have by the non-pursuit of objections actually indicated they will not be adversely affected by, as did the Court of Appeal, which upheld the Tribunal’s decision that it had not been shown paragraph (aa) was satisfied or under paragraph (b) that potential objectors were consenting to discharge rather than modification. It is to be noted in passing that an application cannot succeed in part under paragraph (b) and in part under another paragraph of s 84(1): see para 18.4 above (and para 21.15 below). 27 See R v Westminster City Council, ex p Leicester Square Coventry Street Association (1989) 59 P&CR 51 (Simon Brown J) – a case of judicial review where although ‘no-one has discovered who now enjoys the benefit of the covenant’ (at p 57), the court pronounced its decision on the footing that the covenant remained enforceable. 28 See the remarks of Eveleigh LJ in Stockport Metropolitan Borough Council v Alwiyah Developments (1986) 52 P&CR 278, at 281.

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Does impeding proposed user not secure benefits etc? 20.20 20.19 This is well illustrated by the decision of the Court of Appeal in Stockport Metropolitan Borough Council v Alwiyah Developments.29 The facts in that case were as follows: In 1960 the Stockport Borough Council sold 4.5 acres of land (including the application site consisting of 4 acres) and took a covenant from the purchaser not to use the land for any purpose other than agriculture. The respondents, having obtained detailed planning permission for the erection of 42 houses on the site, sought the modification of the covenant under paragraph (aa) so as to permit the erection and use of the houses. Some of the council’s houses built on a part of the benefited land enjoyed a pleasant view over the site. The Lands Tribunal granted the modification applied for subject to the payment of £2,250 by way of compensation to the council. On appeal, the council claimed that the loss of ‘practical benefits’ which they would suffer if the covenant were modified consisted of: (a) a reduction in the value of certain council houses which enjoyed a view over the application site, referable to the loss of the view (fixed by the Tribunal at £2,250); and (b) loss of the power to bargain with the developers for the release of the covenant on the basis of sharing half of the development value (estimated to be £150,000). The Court of Appeal, whilst accepting (a) as a practical benefit secured by the restriction rejected (b) as such a benefit. In the course of his judgment, Dillon LJ said (at pp 283–284): ‘No doubt, in a certain sense, a right to receive £75,000 or a strong bargaining position to negotiate for a payment of £75,000 may be said to be a practical benefit of substantial value. In the context of subsection (1A) of section 84, however, I do not think that that sort of possibility of financial advantage is to be regarded as a “practical benefit” to the persons entitled to the benefit of the restriction at all. In the context of the section as a whole the subsection is concerned with practical benefits on the land amenities and not with merely financial bargaining position which the person entitled to the benefit of the covenant could have used to extract money for his consent to a release or modification of the restriction if the section had never been enacted. The possibility, therefore, that in the absence of any order of the Lands Tribunal modifying the covenant the council might have been able to hold out for a very substantial Stokes v Cambridge Corpn30 payment for its consent to the development of the subject land is not relevant to the question whether the restriction can be modified under subhead (aa) of subsection (1) of section 84.’ 20.20 Further, to qualify as a practical benefit ‘secured’ by the restriction, the benefit must flow as a direct consequence of the observance of the terms of the restriction.31 Thus, in Gilbert v Spoor32 the practical benefit of a pleasant view was directly ‘secured’ by observance of a covenant not to build in the only way that covenant could be observed, namely, by not building. 29 (1986) 52 P&CR 278, CA. The Lands Tribunal decision to the contrary in Re Phillips’ Application (1955) 7 P&CR 182 is accordingly overruled. 30 (1961) 13 P&CR 77, LT. 31 Though it need not have been the original purpose of it: see Stanard v Issa, below. 32 [1983] Ch 27, CA.

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20.21  Section 84(1) of Law of Property Act 1925: para (aa) 20.21 However, with some restrictions, there may be more than one way in which the terms of the restriction can be observed and in which a practical benefit would result from observance in one way but not in another. In such a case, whether it can be said that the benefit is ‘secured’ by the restriction would seem to depend upon whether the way in which the restriction is in fact being observed results in that benefit. Thus, in Re Mansfield District Council’s Application,33 the predecessors in title of the applicant council had covenanted to use land comprising the Mansfield Cattle Market for the purposes of markets and fairs generally and especially of a cattle market and not to erect any buildings for purposes other than those. The applicant sought the discharge of the covenant, its intention being to develop the land as a leisure and sporting centre for the local inhabitants. The evidence showed that at the time of the application the land was in fact being actively used as a cattle market by farmers. That being so, the Tribunal was in ‘no doubt that the covenant does secure benefits of substantial value or advantage to farmers and others within the Manor and certainly substantial potential advantages to the objectors themselves so far as their own land is concerned and that, as the objectors are the moral guardians of those advantages, the covenant does secure practical benefits of substantial value or advantage to the objectors’. This conclusion was reached notwithstanding that the Tribunal accepted ‘that the enforcement of the covenant cannot ensure that the land is used as a cattle market … [and] win or lose this application, the applicants intend to close the market at the end of the year …’. Similarly, in Stannard v Issa,34 covenants provided that each of two plots of land on the coast of Jamaica should not be subdivided. Whilst not, in terms, restricting the land to one dwelling house per plot, the covenants had in fact been observed by the construction of one detached villa on each plot. The applicant sought an order under Jamaican legislation35 modifying the covenants so as to permit the erection on the two plots of six blocks of three-storey buildings comprising 40 residential apartments which it was proposed would be subdivided horizontally  into strata lots. The Privy Council held obiter (the decision proceeding primarily on another ground) that although the covenant could theoretically be observed consistently with the construction of a complex of sixstorey castles covering the entirety of the lots, on the facts, development by low density housing had (albeit indirectly) been achieved by the covenants and therefore showed that they were ‘securing … practical benefits’. In the course of delivering the judgment of the Privy Council, Lord Oliver said, at p 188: ‘The question is not “what was the original intention of the restriction and is it still being achieved?” but “does the restriction achieve some practical benefit and if so is it a benefit of sufficient weight” …’ 20.22 In Re O’Reilly’s Application36 the Tribunal adopted a much stricter approach to the meaning of the word ‘secure’ in subsection (1A)(a) to that in 33 (1976) 33 P&CR 141. 34 [1987] AC 175, PC. 35 The relevant Act, the Restrictive Covenants (Discharge and Modification) Act (No 2 of 1960) is modelled on s 84 of the Law of Property Act 1925 in its original form and it was accepted on both sides that English authorities on the construction of s 84 were applicable to the construction of the Jamaican Act. 36 (1993) 66 P&CR 485 (HH Judge Marder QC, President).

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Does impeding proposed user not secure benefits etc? 20.23 the previous cases. In O’Reilly, the claimed benefit of a reduction in on-street parking was held not to be secured by a covenant ‘Not … to use the land or any part thereof otherwise than for the purpose of parking and garaging of cars’ notwithstanding the fact that the land was being actively used for that purpose. The Tribunal’s view was expressed in the following terms:37 ‘I consider that in order to secure a practical benefit for the purposes of subsection (1A) the restriction must itself in consequence of its wording and effect be capable of providing a benefit. It may well be a desirable objective of the local authority to make off-street parking available. I have no doubt that this was the intention of the local authority in imposing the restriction on sale. It is clear that the applicant has so far offered off-street parking to those who wish to use the application site, and that a diminishing number of residents in the locality have chosen to make use of the facility. It is equally clear that the applicant could cease to use the land for this purpose at any time and would not thereby be in breach of covenant. It follows, as was submitted, that such practical benefit as there may be in providing off-street parking is not a benefit which is secured by the restriction. I am satisfied, therefore, that in impeding the proposed user of the application site the restriction does not secure to persons entitled to the benefit of it any practical benefit.’ 20.23 However, this would leave the way open to achieve discharge of a covenant by leaving land out of use, and it is submitted that this narrow construction of subsection (1A)(a) is incorrect and inconsistent both with the earlier decision of the Lands Tribunal in Re Mansfield District Council’s Application38 and with the remarks of Lord Oliver in Stannard v Issa39 referred to above, and that the true meaning of the word ‘secure’ in the subsection is as set out above. As the Court of Appeal40 pointed out in Shephard v Turner:41 ‘… in considering the practicality and substantiality of the benefits to the objectors of being able to prevent that use, there must be an element of comparison with what would happen if the modifications are not allowed. If an equally damaging development could be carried out without breaching the restrictions, and there is evidence that it is likely to happen, then the apparent benefits of impeding the proposed development may be illusory.’ The Court referred42 to the passage from the judgment of Lord Oliver on behalf of the Privy Council in Stannard v Issa above, and emphasised that in judging the effectiveness of the protection provided by the covenants, the Tribunal is concerned with practicality, not theory. It also referred,43 with approval, to the

37 Ibid, at p 489. 38 Apparently not cited in Re O’Reilly’s Application – see, ibid, at p 488 of the report, referring to no previous reported case on the point being cited. 39 Stannard v Issa was referred to by the Tribunal in Re O’Reilly’s Application, ibid, at p 489, but the Tribunal appears to have treated the restriction in question as a density restriction. In fact, it was a restriction against subdivision of a plot and not on the number of buildings which could be built. The restriction therefore only indirectly resulted in one building per plot having been erected – and other buildings in the same ownership might have been erected at any time. 40 Through Carnwath LJ, with whom the other Lord Justices agreed. 41 [2006] 2 P&CR 28. 42 Ibid, para 38. 43 Ibid, para 40.

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20.24  Section 84(1) of Law of Property Act 1925: para (aa) judgment of the President, George Bartlett QC, in Re Fairclough Homes Ltd where he said as follows:44 ‘… how the character of the area and the amenities would be affected by the modification of the restriction is not in my view to be judged by envisaging the worst that could be done without breaching the restriction and comparing it with what the proposed modification is intended to permit … In such a case as this, the provision, it seems to me, operates in this way. By preventing development that would have an adverse affect on the persons entitled to his benefit, the restriction may be said to secure practical benefits to them but if other developments having adverse affects could be carried out without breaching the covenant, these practical benefits may not be of substantial value or advantage. Whether they are of substantial value or advantage is likely to depend on the degree of probability of such other development being carried out and how bad, in comparison to the appellant’s scheme, the effects of that development would be.’45 In relation to ‘incidental benefits’ from the observance of the covenant as compared to the position in relation to any alternative development permitted by it, however, the Court (through Carnwath LJ) said: ‘The purpose of the present restrictions is … apparent on their face: in summary, to preserve the character and environment of the Close, by limiting density, preventing disturbing activity, and restricting building and other clutter in the garden areas in front of the houses. Notably absent is any restriction designed to protect the continuity of the facades. The “largely unbroken façade” may be an attractive feature of the Close, but its protection is not part of the contractual scheme of which the restrictions form part. At most it can only be an incidental and uncovenanted benefit of the achievement of the other contractual objectives. That does not mean that such a benefit is irrelevant. It does however mean that it is a factor which the Tribunal is entitled to give less weight in the overall judgment of substantiality.’ 20.24 In seeking to satisfy the Tribunal that, in impeding the proposed user, the restriction does not confer any practical benefits on the objectors, the applicant must (i) deal with the matters which the Tribunal is required by

44 LP/30/2001, at paras 29–30. 45 In Re Fairclough Homes’ Application itself, the Tribunal said in relation to the alternative development which the applicant said it should have regard to, that there was no evidence as to the probability of it being carried out, so that it was hard to see how the applicant could rely on it for the purpose of establishing its case, but that even if it was to assume that such development would be likely to be carried out, the applicant’s proposed development would be likely to be much worse. Re Boultons’ Application (2004) LP/301/2003, following the President’s judgment in Re Fairclough Homes gives a useful example of the application of the approach in practice. The Tribunal said, ‘although no evidence was produced in respect of what else might be done with the Gate House without breaching the restriction, I suspect that conversion of the existing house to multi-occupation, or its replacement with a development of flats would be feasible, and could well occur (subject to planning) if this application fails. However, I think the proposed children’s day nursery use would be much worse in terms of disturbance to the quiet enjoyment that the majority of those with the benefit of the restriction currently enjoy. In my view, even if there were to be a development of 20 flats on the application land, with associated traffic generation and general disturbance, that would never result in the intensive traffic problems which will undoubtedly occur under the applicants’ proposals, those problems being particularly focused early in the morning. The practical benefits in preventing the use are, therefore, of substantial advantage to the objectors’.

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Does impeding proposed user not secure benefits etc? 20.26 section 84(1B) to take into account when determining that issue46 and (ii) be ready to refute any practical benefits which might be claimed by the objectors. 20.25 A wide view is taken of ‘practical benefits’. In Gilbert v Spoor,47 Eveleigh LJ said: ‘… the words … are used quite generally. The phrase “any practical benefits of substantial value or advantage to them” is wide. The subsection does not speak of a restriction for the benefit or protection of land, which is a reasonably common phrase, but rather of a restriction which secures any practical benefits. The expression “any practical benefits” is so wide that I would require very compelling considerations before I felt able to limit it in the matter contended for. When one remembers that Parliament is authorising the Lands Tribunal to take away from a person a vested right either in law or in equity, it is not surprising that the Tribunal is required to consider the adverse effect upon a broad basis.’ The Court of Appeal accordingly held that loss of a ‘resplendent’ landscape view, visible from land in the immediate vicinity of the objectors’ properties (where seats had been placed for public use, giving a commanding view) and along the road leading to them, was a sufficient reason to refuse modification.

Practical benefits: examples 20.26 Examples of practical benefits which have been treated by the courts or the Tribunal as flowing from the observance of restrictions include the following:48 ●●

Preserving a view over the burdened land and beyond: Re Saddington’s Application (1964) 16 P&CR 81 (view from large house over park-like surroundings which included the application site); Re Collett’s Application (1963) 15 P&CR 106 (view from house in Torquay over sea as far as Portland Bill); Re Carter’s Application (1973) 25 P&CR 542 (sea views from four houses on Hampton Estate at Babbacombe, near Torquay, would to some extent, but not to any substantial extent, be impaired – Re Collett’s Application distinguished and application granted subject to small compensation for three of the objectors); Re Banks Application (1976) 33 P&CR 138 (sea views across application site from terrace of three-storey houses in Devon – but direct obstruction would be slight –application granted); Gilbert v Spoor [1983] Ch 27 (view over scenic Green Belt from approach road to housing estate, although not visible from the houses themselves); Re Bushell’s Application (1987) 54 P&CR 386 (view overburdened plot on Wimbledon House Estate ‘both unusual in an urban setting and of great importance to those who enjoy it’);

46 47 48

As to which, see above, para 16.68. [1983] Ch 27, at p 32. Though in some cases (where indicated) those benefits were in the instant case found not to be ‘of substantial value or advantage’ (Question 4 below).

571

20.26  Section 84(1) of Law of Property Act 1925: para (aa)

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Stockport Metropolitan Borough Council v Alwiyah Developments (1986) 52 P&CR 278 (uninterrupted view from 11 council houses in Romiley, Stockport, Cheshire, over open space which included the four-acre application site, but application granted because interest of owner of benefited land was reversionary and therefore the benefit secured by the restriction was not substantial). Freedom from objectors’ gardens being overlooked, eg: Re Henderson’s Conveyance [1940] Ch 835 (Farwell J, at p 849 said: ‘Moreover, I think there is a practical benefit in having a garden which is not overlooked by a house or houses immediately adjoining it’; Re Gossip’s Application (1972) 25 P&CR 215, at 220 (gardens of some objectors of houses in New Milton, Hampshire, would be overlooked by proposed new houses); Cf Re Zopat Developments’ Application (1966) 18 P&CR 156, the Tribunal disregarded the risk of a garden being overlooked by upstairs windows of the proposed house on the ground (at p 159) that ‘I cannot believe that the occupants of the proposed house will spend their days looking out of the bedroom windows. It is, I am satisfied, a case where the prospect terrifies while the reality will prove harmless. … I am not satisfied that there will be any material effect on Mr Kepple’s [an objector’s] privacy’; And in Re John Twiname Ltd’s Application (1971) 23 P&CR 413, at 418, (covenant not to build within 200 feet of any part of ‘the Towers’) where the Tribunal considered that a belt of trees would ‘go a long way towards preserving the seclusion and privacy enjoyed within the grounds of The Towers’ and granted an application to build three pairs of semi-detached houses within the 200-foot zone. It was otherwise in Re Williams’ Application [2017] UKUT 341 (LC) (proposed chalet bungalow close to and directly overlooking objector’s garden ‘would completely alter the setting and ambience of [the objector’s] garden and his enjoyment of it’). The continuance of a scheme of covenants, eg: Re Henman’s Application (1970) 23 P&CR 102, LT (large plot on the Wentworth Estate restricted to one house with lodge for servants – large house built but no lodge – plot subdivided – application to permit second house refused). Cf Re Kalsi’s Application (1993) 66 P&CR 313, at 325, LT, relating to another plot on the same estate, an application to permit the construction of a bungalow (but not a house) was granted; Re Bromor Properties Ltd’s Application (1995) 70 P&CR 569 (‘The benefit to all residents of the Hill House Estate, lies in the right to the maintenance of the status quo’); Re Smith and Dolding’s Application (1996) 71 P&CR 104, at 118 (Wildernesse Estate, Sevenoaks: ‘where such an application would, if granted, have the effect of opening a breach in a carefully maintained and outstandingly successful scheme of development this must be regarded as depriving the objectors of a substantial practical benefit, namely the assurance of the integrity of the building scheme’); Re Stafford-Flowers’ Application [2015] UKUT 82 (LC) (holiday estate of 278 bungalows – removal of restriction on occupation in winter months of application bungalow would open up a breach in the building scheme

Does impeding proposed user not secure benefits etc? 20.26

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which would lead to others following, with potentially severe effects on the character of the site which could eventually become a normal housing estate); See also Zenios v Hampstead Garden Suburb [2010] UKUT 260 (LC) (Upper Tribunal) and [2011] EWCA Civ 1645 (Court of Appeal) (preservation of the Suburb’s character and amenities by scheme in relation to which the Trust with the benefit of the covenant were custodians of the public interest, in relation to which they were not bound to allow development by reason of the grant of planning permission for what was proposed). Freedom from the disadvantage of high density development, eg: Re S J C Construction Co Ltd’s Application (1974) 28 P&CR 200, at 204 (attracting six families in six flats instead of one family in the permitted single dwelling house); Re Collins’ Application (1974) 30 P&CR 527 (covenants on the Stockton House Estate, Fleet, Hampshire, restricting use of each plot to one house and prohibiting use as a road serving other land: ‘it is not merely the arithmetic of the density which matters, but the general effect on the amenity of the area’). The maintenance of the ‘ethos’ of an estate, even though the proposed development would not result in any depreciation of the market value of the objectors’ houses, eg: In Re Munday’s Application (1954) 7 P&CR 130 (freedom from a proposed use for public entertainment in a seafront house, to one side of which two properties were already being used as a rifle range, snack bar and cafe, was held to be a practical benefit to residential occupiers of houses which adjoined on the other side notwithstanding that if the application were granted, the value of those houses would be greatly increased by the prospect that they too could be used for public entertainment. In this case, the wish of the objectors to preserve the residential character of the houses was found to be genuine and reasonable. If their wish had been found to be ‘the outcome of prejudice against innovation’ or expressed ‘with some ulterior motive’ then it appears that the Tribunal’s decision may have been different); Re Dobbin’s Application (2006) LP/ LP/59/2004 (low density development giving a ‘pleasant and peaceful ambience’ – application refused; upheld by the Court of Appeal at [2007] 4 All ER 465). Freedom from complaints by residents of a new house about activities, even though unjustified: Re Wake’s Application (2002) LP/2/2001 (covenant having the effect of imposing a cordon sanitaire in relation to a nearby working farm with the benefit of the covenant, avoiding complaints that could be made by occupiers of a new dwellinghouse about noise, smell and disturbance, which, even though they would have no legitimate complaint, would be capable of being time consuming, stressful, and costly to deal with). Freedom from interference by building operations involved in the proposed development: Compare: Re Tarhale Ltd’s Application (1990) 60 P&CR 368, at 373 (‘intolerable nuisances … during the construction period’, where there was not only 573

20.26  Section 84(1) of Law of Property Act 1925: para (aa)

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49

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a covenant to build no more than one house on plot, but also a specific covenant preventing use of an access drive by construction vehicles apart from those required for a particular development); Re Kershaw’s Application (1975) 31 P&CR 187, where the covenant preventing building on open space land was essentially directed at longterm enjoyment of the benefited property and prevention of short-term inconvenience and noise caused by construction works though temporarily substantial was not regarded as being substantial in the context of the longterm use of the land). In relation to these two cases concerning disturbance to the occupiers of benefited land during the construction period (to be borne in mind also in relation to Tribunal decisions based on one or other of them), see the Court of Appeal case of Shephard v Turner [2006] 2 P&CR 611, below.49 Freedom from ‘the concomitants of living’, eg: The fact of a house being lived in and occupied, lights from it, noise from car doors, effect of car headlights, television aerials, clothes lines, dustbins etc: see Re Banks Application (1976) 33 P&CR 138, LT (borderline case – application granted); Re Doig’s Application (1980) 41 P&CR 261, at 267, LT (application granted); Re Osborn’s and Easton’s Application (1978) 38 P&CR 251, LT (would substantially increase noise, by traffic, tradesmen and the shutting of car doors late at night – application refused). The preservation of privacy and sense of spaciousness, eg: Re Williams’ Application (1987) 55 P&CR 400, at 404 (application refused); Re Austin’s Application (1980) 42 P&CR 102, at 104 (application granted subject to compensation); Re Davies’s Application (1971) 25 P&CR 115, at 129 and 137, LT (covenant not to erect any building within 100 yards of vendor’s property – application to permit building of 11 houses on land of which 2.263 acres was located inside the restricted area, refused); Re Barry’s Application (1980) 41 P&CR 383 (application to erect additional house which would overlook the houses of three objectors and result in considerable loss of privacy with consequential loss in value refused); Re Walker [2010] UKUT 16 (LC) (perception of being overlooked in what was currently an ‘extremely private’, secluded garden); Re Coldmans’Application [2012] UKUT 6 (LC) (avoidance of unacceptable sense of enclosure); Re Lynch [2016] UKUT 488 (LC) (ability to resist a house being ‘shoehorned’ into adjacent land a practical benefit; and, in the case of another objector, ability to resist a house being erected that he could see from his patio, that would probably also block some light to his garden). The wish to retain a feeling of space and quiet, eg: Re Wards Construction (Medway) Ltd’s Application (1973) 25 P&CR 223, at 231 (application to erect block of 12 flats on land in Gillingham, Kent, restricted to detached and semi-detached houses, refused); Re Fisher & Gimson Builders Ltd’s Application (1992) 65 P&CR 312, at 317 (application to permit retention of dwelling house and separate See para 20.52 et seq below.

Does impeding proposed user not secure benefits etc? 20.26

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garage with snooker room built in breach of covenant, granted subject to compensation, since practical benefits were not substantial); Re Dobbin’s Application LP/59/2004 (low density development giving a ‘pleasant and peaceful ambience’ – refusal of application; upheld by the Court of Appeal at [2007] 4 All ER 465). Levels of daylight, eg: Re Coldmans’ Application [2012] UKUT 6 (LC). The prevention of a material alteration in the ‘character’ of a residential road, eg: Re Beardsley’s Application (1972) 25 P&CR 233, at 237 (application to permit erection of a block of 12 flats with 12 garages on land restricted to two private residences, refused); The prevention of a material alteration in the ‘neighbourhood’ of the benefited dwelling: (Re Fisher (2008) LP/31/206) (covenant preventing the building and use of more than one dwelling sought to be modified to allow additional dwelling(s)). The loss of an attractive entrance to an exclusive cul de-sac: Re Tillotsons’ Application (2008) LP/56/2006. Preserving open development with large gardens, eg: Re Purnell’s Application (1987) 55 P&CR 133, at 136) (application to permit an additional house, a chalet-bungalow, on a plot on the Chelsfield Park Estate near Orpington described as having ‘an almost unique character in this area’, refused); Re Sheehy’s Application (1991) 63 P&CR 95, at 107 (covenant to maintain land immediately opposite objectors’ house as open garden constituted a practical benefit of substantial value); Cf Re Gaffney’s Application (1974) 35 P&CR 440 where an application made solely under paragraph (aa) for modification to allow an additional house on part of a 0.88 acre site restricted to one house, was granted on a finding that the size of the new plot and the character of the house as proposed to be built would conform to those of the existing houses on the Goldhill Estate at Chalfont St Peter, Buckinghamshire and ‘would in no sense alter the character of the estate’ and that the instant case was ‘the sort of case which the amendment to the law then [by the 1969 Act] introduced was designed to meet’; A borderline case where an additional house was permitted on the Wimbledon House Estate SW19 is Re Doig’s Application (1980) 41 P&CR 261, at 267 where the Tribunal found that ‘the new house would readily fit in with its neighbours’ and that the application land was currently untidy and unkempt; Also, in Re Austin’s Application (1980) 42 P&CR 102 (Douglas Frank QC), an application for modification to permit an additional house on half of a one-acre plot restricted to one house was granted, the Tribunal finding (at p 105) that the half plot ‘is by reason of geography, the screen of trees and bushes on the western and northern flanks, a separate part of the estate which does not contribute to its character. It is an inferior part of the estate’; But in Re Bushell’s Application (1987) 54 P&CR 386 (VG Wellings QC) an application to build an additional house on part of an existing developed plot on the Wimbledon House Estate was refused even though when the 575

20.26  Section 84(1) of Law of Property Act 1925: para (aa)

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576

plot was divided, each sub-plot would be larger than any of the objector’s plots except one. The refusal was based principally on the loss by one objector of a view over the application land which was ‘both unusual in an urban setting and of great importance to those who enjoy it’; Contrast Re Hornsby’s Application (1968) 20 P&CR 495 (J S Daniel QC) relating to the same estate. Enclosure of amenity land: Re Clarkes’ Application [2015] UKUT 44 (LC) (enclosure of amenity land as part of the applicants’ gardens on a small housing estate, held to secure practical benefits of substantial advantage notwithstanding the land was overgrown on the basis it could still be used for recreational activities such as bird-watching, and otherwise relating to nature). Implementation of a moral obligation on vendors of plots on an estate to maintain (or ‘police’) a scheme of covenants imposed on the plots and enforceable by the vendors, eg: Re Sheehy’s Application (1991) 63 P&CR 95, at 107 (control by trustees of the St Aubyn Estate, Devonport, held to be a practical benefit of substantial value even though its rental income was exceeded by the cost of administering the Estate); Re Brierfield’s Application (1976) 35 P&CR 124, at 127 (covenants affecting plots on Onslow Village Estate, Guildford, Surrey, policed by a registered friendly society); Re Mansfield District Council’s Application (1976) 33 P&CR 141 (covenantees held entitled to regard themselves as ‘quasi-trustees with a moral obligation towards their former [copyhold] tenants’; However, in Re Kalsi’s Application (1993) 66 P&CR 313, at 325, the Tribunal, whilst finding that the Roads Committee of the Wentworth Estate (which had power to enforce estate covenants under the Wentworth Estate Act 1964) had decided on reasonable grounds to oppose the applicant’s proposal for the erection of a house or bungalow on a plot restricted to one dwelling house and a servants’ lodge, nevertheless permitted the erection of a bungalow on the basis that such permission would not afford a precedent or weaken the Roads Committee’s position in any other case. This decision, if of general application, would appear to restrict the ‘practical benefit’ status of policing estate covenants to cases where the Tribunal considers that the applicant’s proposal would constitute the ‘thin end of the wedge’ (as to which, see further, at paras 16.102 et seq and 16.116–16.117 above). See, also, Re Solarfilms (Sales) Ltd’s Application (1993) 67 P&CR 110, and Re Bromor Properties Ltd’s Application (1995) 70 P&CR 569. That the person with the benefit of the covenant holds it as the custodian of the public interest and it is reasonably considered by it to conflict with that interest – see: Re Martins’ Application (1989) 57 P&CR 119 (cramped appearance of house causing visual detriment to the amenity of the area which the council had a duty to protect as custodian of the public interest notwithstanding the grant of planning permission for what was proposed); Cf Re Willis [1997] 6 P&CR 97 – (covenant not to use premises for business purposes modified to allow a bed and breakfast establishment on the basis the restriction did not result in a deterioration in the amenity of the area

Does impeding proposed user not secure benefits etc? 20.26

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for reasons set out, unlike other commercial uses, or therefore secure any benefit to the local authority as the custodian of the public interest. See similarly Re Graham’s Application (2008) LP/83/2005); Zenios v Hampstead Garden Suburb [2010] UKUT 260 (LC) (Upper Tribunal) and [2011] EWCA Civ 1645 (Court of Appeal) (preservation of the suburb’s character and amenities by scheme in relation to which the Trust with the benefit of the covenant were custodians of the public interest, in relation to which they were not bound to allow development by reason of the grant of planning permission for what was proposed); Cf Re Vertical Properties Ltd [2010] UKUT 51 (LC), where a covenant seeking a different form of modification was earlier allowed in relation to the adjoining property, that decision being said by the Court of Appeal, at para 28, in Zenios to have been ‘fact sensitive’. Freedom from a 50 per cent reduction in the height of a tree screen and from the roofs of houses appearing above their shorn height, eg: Re Beechwood Homes Ltd’s Application (1992) 64 P&CR 535, at 549 (covenant not to use any part of plot as a road without the vendors’ consent – vendors no longer in existence – application dismissed). Freedom from increased use of vehicles, eg: Re Wallace & Co’s Application (1993) 66 P&CR 124, at 127 (modification to allow the erection of six garages refused); Re Solarfilms (Sales) Ltd’s Application (1993) 67 P&CR 110, at 115 (use of bungalow as day nursery refused); Re Azfar’s Application [2002] 1 P&CR 17 (modification of restriction not to use land other for a private dwellinghouse to allow for use as a 30-bed home for the elderly refused on grounds including traffic and on-road parking: ‘Notwithstanding the grant of planning permission, implying the provision of a technically adequate number of spaces on the site … people visiting the premises will inevitably park in the road … There will be visits to the residents from family and friends, staff coming and going, ambulances, trades-people, catering vehicles, doctors’ cars and refuse lorries’). Assuaging the fear and dislike of the proposed development, eg: Re Bass Ltd’s Application (1973) 26 P&CR 156, at 161 (application to permit use of land for loading and unloading articulated lorries dismissed). Re Marcello Developments Ltd’s Application [2002] RVR 146; LP18/1999 and LP31/2000 (the use restriction conferred a practical benefit to particular objectors in that it enabled ‘their present personal preference, which is for houses rather than flats, to be realised to a greater extent than if the restriction were not modified, and reduces the anxiety which some of them feel, but for which there is no justifying evidence, about subsidence’ – £2,500 per house was awarded as ‘adequate compensation for these personal disadvantages’; But see Re Lloyd’s and Lloyd’s Application (1993) 66 P&CR 112 (application to permit house to be used as a community care home for 10 psychiatric patients; covenant impeding this use held not to confer any substantial benefit or advantage despite fears of objectors as to possible behaviour of residents); Re Duffields’ Application (2007) LP/36/2006 (Tribunal satisfied the effect of the proposed neighbouring bungalow on the amenities of the benefited land ‘would be very limited indeed’, but having regard to the ‘personal 577

20.27  Section 84(1) of Law of Property Act 1925: para (aa)

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circumstances’ of the beneficiary of the restriction in that the restriction was a major factor in the purchase of the property, it was intended to be her last house move, she would be aware of the presence of neighbours on the other side of a hedge, would tend to feel uncomfortable and to some extent inhibited in the use of the garden, and would be ‘devastated’ if the covenant was discharged or modified to this, money was considered insufficient to compensate her). Freedom from increased traffic noise, fumes, vibration, dirt, the appearance of things and the risk of accidents, eg: Re Bass Ltd’s Application (1973) 26 P&CR 156. Freedom from the noise created by children playing in the open, eg: Re Solarfilms (Sales) Ltd’s Application (1993) 67 P&CR 110, at 115. And from disturbance from additional residential activity, eg Re Cordwell’s Application (2008) LP/40/2006. Freedom from the risk of vandalism or rowdyism at night and at weekends, eg: Re Solarfilms (Sales) Ltd’s Application (1993) 67 P&CR 110 (bungalow proposed to be used as a day nursery, meaning the property would be unattended at night and on weekends). Freedom from damage to visual amenity, eg: Re Hopcraft’s Application (1993) 66 P&CR 475, at 483 (storage of caravans on farmland); Re Livingstones’ Application (1982) 47 P&CR 462, at 464–465 (car port consisting of translucent PVC sheeting on a steel frame in a residential close); Re Martins’ Application (1986) 53 P&CR 146, at 154 (LT), affirmed by Court of Appeal (1989) 57 P&CR 119; Re Bass Ltd’s Application (1973) 26 P&CR 156 (appearance of articulated lorries on land proposed to be used for loading and unloading). Sanctity of ‘small private community’ in an area generally containing seaside amusements and similar businesses: Re Munday’s Application (1957) 7 P&CR 130.

Further points 20.27 The benefits secured must obviously be considered not only individually, but also cumulatively, and many cases involve various types of benefit taken together. 20.28 The benefits to be considered are also not limited to those enjoyed only on the benefited land itself, but can extend to benefits to occupiers enjoyed off site, as in Re Henderson’s Conveyance50 (where Farwell J said, ‘In my view it is a practical benefit to the owner of property to have an open space, and a space which must be kept an open space, in the immediate neighbourhood of his property’, and, by way of more recent example, Gilbert v Spoor51 (above), 50 51

578

[1940] Ch 835. [1983] Ch 27.

Does impeding proposed user not secure benefits etc? 20.32 where the loss was of a view over the green belt enjoyed from a road leading to the benefited land, which view would be affected by the development.52 20.29 What will happen if the discharge or modification is not granted may be relevant to whether it secures practical benefits. Whereas, for example, a restriction on the use of premises other than as a public house would have benefits to the objectors’ land if in the absence of a modification it would continue to trade, if the pub was unviable and would have to cease to trade anyway in the foreseeable future (and, presumably, be unlikely to re-open), the restraint would provide no practical benefits to the objectors (unless something else could be pointed to): see Re James Hall and Company’s Application.53 20.30 Practical benefits may still be secured by the covenants even though the properties benefited by them may be of more financial value if the covenant was released to permit other uses, as Re Munday’s Application (above) shows. Discharge of the restrictions was refused even though it was accepted by the Tribunal that all the benefited properties would be more readily saleable and therefore more valuable if the covenant was discharged.

Applicant must provide sufficient information to show the effects of the discharge or modification sought on those with the benefit of the covenant 20.31 The onus being on the applicant to establish the ground is made out, it is necessary for the applicant to provide sufficient information to assess the effects of the proposed development on those entitled to the benefit of the restrictions. 20.32 In Re Davies’ Application, the Tribunal pointed out that:54 ‘If the Tribunal is to assess the extent of the benefit to an objector of impeding a particular user of land, it is essential for the Tribunal to be provided with full details of that user. It is true that the applicants have provided a general description of the form of development which they have in mind, and I infer that they would be prepared to agree that any modification should be subject to those conditions being adhered to in any future development of the application site. But without the benefit of a formal planning permission any description of the proposed house or houses would be difficult to express satisfactorily …’ The Tribunal went on: ‘It is true that the applicants have provided a general description of the form of development which they have in mind, and I infer that they would be prepared to agree that any modification should be subject to those conditions being adhered to in any future development of the application site. But without the benefit of a formal planning permission any description of the proposed house or houses would be difficult to express satisfactorily and enforcement problems could arise.’

52 Cf the recent Tribunal case of Re Williams’ Application [2017] UKUT 341 (LC) at paras 29 and 30, which seems somewhat out of line with this, though the point was made that Gilbert v Spoor concerned a building scheme. 53 [2017] UKUT 240 (LC). See also para 20.53 below. 54 (2006) LP/65/2006, at para 38.

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20.33  Section 84(1) of Law of Property Act 1925: para (aa) And (at para 40): ‘In my judgment, in the absence of detailed planning permission, there is insufficient information available to enable the Tribunal to form a clear conclusion as to the effects of the proposed development on those entitled to the benefit of the restrictions. The applicants have therefore failed to prove that the requirements of ground (aa) have been satisfied.’ 20.33 In that case, examples as to why it could not satisfactorily be considered that ground (aa) (or (c) was satisfied in the absence of a detailed planning permission came from the report of the applicant’s own planning consultant, Mr Gilfrin: ‘As Dr Crossley pointed out, Mr Gilfrin’s report was subject to certain caveats. He said that the overall ridge height of the proposed development would “depend on building design, including roof pitch”. He was unable to specify which trees would remain following development, but limited himself to saying that there would be “a significant number”. Mr Gilfrin’s caution is clearly justified. He made it clear that a full planning application would require floor plans and elevations and the identification of existing site levels, trees, and the location of adjacent buildings and roads. It would need to be supported by a Design and Access Statement “which will examine the design principles and concepts applied in preparing the proposed development on the site and how issues relating to access to the development have been dealt with.” An up-dated arboricultural report, assessing the impact of the proposed development upon existing trees and identifying the steps taken to minimise such impacts, would need to be prepared and submitted as part of any planning application. A noise survey would also be required, to assist the planning authority in deciding whether appropriate conditions could be imposed on any planning permission to ensure an adequate level of protection against noise from the adjoining Portsmouth Road. There can be no certainty that, once the necessary documentation has been prepared, it would be sufficient to satisfy the local authority that permission for development in the form proposed should be granted; Mr Gilfrin made it clear that there was a possibility that consent might be refused and the matter would have to be taken to appeal.’55 The Tribunal accordingly concluded that in the absence of detailed planning permission, there was insufficient information available to enable the Tribunal to form a clear conclusion as to the effects of the proposed development on those entitled to the benefit of the restrictions.56 20.34 The grant of planning permission is in no way determinative of the issues that fall to be considered under ground (aa) in terms of whether the restriction secures to the persons with the benefit of the covenant practical benefits of substantial value and advantage: see, eg Re Cordwell’s Application.57 55 56

57

580

Ibid, para 39. See also Re Snook [2014] UKUT 623 (LC), where Re Davies’ Application was cited and applied (‘The drawings … produced are insufficiently precise for me to make a meaningful assessment on how the proposed house is likely to impact on the objectors. The planning officer had concerns about various aspects of the proposal, and there has been no real explanation as to how these concerns would be alleviated’). (2008) LP/40/2006, at para 65. See also Re Martins’ Application (1989) 57 P&CR 119; Zenios v Hampstead Garden Suburb [2010] UKUT 260 (LC) and [2011] EWCA Civ 1645, and Re Afzar’s Application [2002] 1 P&CR 7, referred to in para 20.26 above.

Are practical benefits of substantial value or advantage? 20.38 The Tribunal must form its own conclusions in relation to that matter. It is only likely to be able to fully assess the likely effects of modification by seeing, however, exactly what is proposed as shown by detailed planning permission. In relation to this, see further para 20.7 et seq above.

QUESTION 4: IF THE RESTRICTION DOES SECURE PRACTICAL BENEFITS TO THE PERSONS ENTITLED TO ENFORCE IT, ARE THOSE PRACTICAL BENEFITS ‘OF SUBSTANTIAL VALUE OR ADVANTAGE TO THEM’? 20.35 Again, this question arises under paragraph (aa) by reason of section 84(1A)(a). To defeat an application under paragraph (aa), the practical benefits must either be of ‘substantial value’ or be of ‘substantial advantage’. As has been seen, a practical benefit may consist of something the loss of which does not depreciate the benefited land58 or the loss of which may even result in the benefited land being increased in value;59 and the alternatives of substantial value or advantage reflect the fact that practical benefits may or may not have a monetary value.60

‘Substantial value’ 20.36 It will initially be for the applicant to lead evidence with a view to showing that any monetary value attaching to any practical benefits which may be claimed is less than substantial. What is ‘substantial’ is ‘essentially a question of fact and degree having regard to all the circumstances.’61 20.37 In Re SJC Construction Co Ltd’s Application,62 the Tribunal (Douglas Frank QC) said applicants have to show, ‘that the benefit is not of any real importance in either money terms or in having some other advantage’, and that: ‘The question I have asked myself in this case is whether the benefits and advantages to the (covenantee) are of so little weight in relation to what is proposed by the appellants that they can regard as having no real importance’. 20.38 said:63

However, Carnwath LJ, for the Court of Appeal, in Shephard v Turner

‘With respect to Mr Frank QC I think that his reformulation of the test may be open to some criticism, although I have no difficulty with his application 58 Re Collins’ Application (1974) 30 P&CR 527. 59 Re Munday’s Application (1954) 7 P&CR 130, as referred to at para 20.30. 60 See Re Bass Ltd’s Application (1973) 26 P&CR 156, at 162, where the fact that the objectors’ expert surveyor could not himself quote figures for depreciation in the value of the objectors’ property if the proposed user went ahead did not prevent the Tribunal from holding that the restrictions secured practical benefits of substantial advantage (namely, assuaging the fear and dislike of the proposed ‘trucker park’ and avoiding fumes, vibration, dirt, the appearance of things and the risk of accidents). 61 Re SJC Construction Co Ltd’s Application (1974) 28 P&CR 200, at 204 (Douglas Frank QC). Affirmed by the Court of Appeal (1975) 29 P&CR 322. No criticism of this part of what was said was made by the Court of Appeal in Shephard v Turner. 62 (1974) 28 P&CR 200, at 204. 63 [2006] 2 P&CR 611, at para 21.

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20.39  Section 84(1) of Law of Property Act 1925: para (aa) of (1A) to the facts of that case. First, the words “of so little weight” may be seen as implying a very low threshold, which is not reflected in the dictionary definitions of the word, and in effect adds very little to the word “practical”. Secondly, I am not sure that I understand what he meant by the words “in relation to what is proposed by the applicants”. The “substantiality” of the benefits, as I understand para (a), is to be judged by their practical value to the covenantee, not by comparison with the importance of the proposed development to the applicant.’ Carnwath LJ referred64 to the word ‘substantial’ being ‘a Protean word, which must take its meaning from its context. The Concise Oxford Dictionary 9th Edn, offers the following definitions: “of real importance”, “of large size”, “of solid material or structure”’. He said the concept was imprecise,65 and66 that ‘considerable, solid, big’ was a safer guide than what was said by Douglas Frank QC. He continued: ‘However, I would prefer not to seek a substitute for the statutory language, nor to seek a degree of precision which Parliament has avoided. It was no doubt thought appropriate to leave it to the Tribunal, as an expert body, with the statutory function of promoting ‘uniformity of decision’ (see Lands Tribunal Act 1949 s.4(1)), to apply the section in a common sense way.’ 20.39

In the earlier case of Re Gaffney’s Application,67 the Tribunal observed:

‘The word “substantial” cannot be interpreted in absolute terms – it is specifically related in the words of the section to the persons entitled to the benefit of the restriction; and although any compensation awarded is to be expressed in money terms, what has to be “substantial” is not the sum of money but the value or advantage. In the present case, the value or advantage lies in the enjoyment of the occupation of “Old Basing” by Mrs Lee. In my opinion, the true measure of its “substantiality” lies in the degree of depreciation in the value of that enjoyment. A depreciation of £1,500 in the value of a property worth £5,000 is not to be compared in degree with the same amount payable in the case of a property worth £45,000. In the one case the loss or disadvantage represents 30 per cent of the value of the whole; the value or advantage is clearly substantial. In the other case the proportion is 3.333 per cent. I do not consider that a value or advantage expressed in this way can be said to be substantial.’68 20.40 However, the substantiality or otherwise of practical benefits will also vary according to whether the interest of the objector in the benefited land is an interest in possession or in reversion subject to the rights of an occupier under a licence, tenancy or lease.

64 65

Ibid, at para 19. As Viscount Simon had pointed out in the different statutory context of the Rent Acts, in Palser v Grinling [1948] AC 291, at 317. 66 At paras 22 and 23. 67 (1974) 35 P&CR 440, at 441–442 (JH Emlyn Jones FRICS). 68 It should be noted, however, that there is no necessary relation between the substantiality (or otherwise) of the benefit and the amount of the compensation – compensation may be substantial without prejudicing a finding that the the benefit is not of substantial value or advantage, since the methods of assessment may properly differ: see, eg, Re Fisher & Gimson (Builders) Ltd’s Application (1992) 65 P&CR 312, at 317–318, and below at paras 20.91–20.93 (and some of the cases discussed at para 20.84).

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Are practical benefits of substantial value or advantage? 20.42 Thus, in Re Vaizey’s Application,69 the only person entitled to enforce a covenant restricting the burdened land to one dwelling house was the owner of a block of flats whose only interest in possession in the benefited land was in the common parts, the flats themselves being subject to leases having at least 80 years to run. The Tribunal held that the covenant did not secure to the objector any practical benefits of substantial value and made an order modifying the covenant so as to permit the erection of three houses on the burdened land. Similarly, where the benefited land is as yet undeveloped and there is no specific estate plan, any practical benefits would prima facie70 be confined to freedom from any adverse effect which the proposed user of the burdened land would have on the market value of the benefited land.71 However, the insubstantial nature (in the present context) of an objector’s reversionary interest in the benefited land may be off-set by the existence of a moral obligation owed by him to purchasers of houses on the estate so as to elevate his interest in enforcing the covenants into one conferring a practical benefit of substantial value or advantage.72 20.41 What is able to be done without breaching the restrictions will be relevant. In Shephard v Turner (above), Carnwath LJ said: ‘It is clear from the wording of the section that the inquiry must begin by considering the proposed use as a whole. However, in considering the practicality and substantiality of the benefits to the objectors of being able to prevent that use, there must be an element of comparison with what would happen if the modifications are not allowed. If an equally damaging development could be carried out without breaching the restrictions, and there is evidence that it is likely to happen, then the apparent benefits of impeding the proposed development may be illusory.’ 20.42 In the case of practical benefits which contribute to the value of the benefited land (such as the enjoyment of a view, freedom from being overlooked or a sense of spaciousness), the value of such benefits would be a matter for expert evidence to establish the amount of depreciation in market value which would be suffered if those benefits were lost.73 69 (1974) 28 P&CR 517, at 519 and 520 (VG Wellings QC). See, also, Stockport Metropolitan Borough Council v Alwiyah Developments (1986) 52 P&CR 278, CA (council’s interest in council houses subject to occupiers’ rights); Re Da Costa’s Application (1986) 52 P&CR 99 (objector’s interest in house subject to a licensee’s indefinite security of tenure under the Rent (Agriculture) Act 1976). 70 And in the absence of some present use being made of that land, deriving benefit from the restrictions imposed. 71 See Re New Ideal Homes Ltd’s Application (1978) 36 P&CR 476, LT. 72 See, eg Re Saviker’s Application (No 2) (1973) 26 P&CR 441, at 442. But in Re Da Costa’s Application (1986) 52 P&CR 99, the Tribunal rejected a claim by the freeholder of a house that he owed a moral obligation to an occupying licensee and held that money (£2,500) would be an adequate compensation for the loss suffered by the freeholder from the erection of a bungalow on adjoining land. 73 See, eg Re Collett’s Application (1963) 15 P&CR 106 (where the Tribunal accepted evidence that marring of a panoramic sea view from the windows of a large family house on the Hampton Estate in Babbacombe, near Torquay, would depreciate its value by at least £2,500); Re Carter’s Application (1973) 25 P&CR 542, at 548 and 549, where the Tribunal rejected claims that minor impairment of sea views (already obscured by trees) would cause depreciation of the order of £2,000 and £1,000 respectively to two houses on the same (Hampton) Estate; Re Tarhale Ltd’s Application (1990) 60 P&CR 368, at 372–373 (increase in density estimated by objectors’ expert to reduce value of one benefited house from £395,000 to £380,000 – a drop

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20.43  Section 84(1) of Law of Property Act 1925: para (aa) It is to be borne in mind, however that ‘capital value is not the only consideration when assessing degree of benefit’ and the covenant may secure practical benefits to the occupiers of the benefited land even though the monetary value of that land may be increased.74

‘Substantial advantage’ 20.43 Where the practical benefit has little or no monetary value75 or insistence upon it even depreciates the benefited land,76 then it is for the Tribunal to assess, as a matter of general impression from the facts, whether the benefit is nevertheless one of substantial advantage. 20.44 In carrying out this assessment, the Tribunal has regard not only to the facts placed before it by oral testimony and documentary evidence but also to ‘real’ evidence in the shape of the Tribunal’s inspection of the application land and the relevant surrounding area. No attempt is made to evaluate such a benefit in money terms although if it is assessed not to be of substantial advantage, then the question will arise whether money will be an adequate compensation for its loss. 20.45 In Re Livingstons’ Application,77 the Tribunal, whilst finding that a carport which had been constructed in breach of covenant deprived the covenantee of a practical advantage, was undecided whether that advantage was substantial but found it unnecessary to resolve the point on the ground that in any event money would not be an adequate compensation for the disadvantage. 20.46 A benefit consisting of the right to approve plans, where such approval is not to be unreasonably withheld,78 will usually not be a benefit of substantial value or advantage.79

of £15,000, or roughly 3.8 per cent, freedom from which together with freedom from ‘intolerable nuisances’ during construction amounted to practical benefits of substantial value or advantage. It may be mentioned, however, that where on this basis of assessment, the loss suffered is less than ‘substantial’, it does not follow that the compensation will be measured in the same way – and it may itself, in appropriate cases, be substantial: see Re Fisher & Gimson (Builders) Ltd’s Application (1992) 65 P&CR 312, and footnote 68 above. 74 See Re Munday’s Application (1957) 7 P&CR 130. 75 As in Re Collins’ Application (1974) 30 P&CR 527 (covenants on the Stockton House Estate, Fleet, Hampshire, restricting use of each plot to one house and prohibiting use as a road serving  other land, held to confer practical benefits of substantial advantage in preserving the ‘ethos’ of the estate although the modification sought would not depreciate the benefited houses). See, also, Re Henman’s Application (1970) 23 P&CR 102 (continuance of the Wentworth Estate scheme of covenants without departure secured a practical benefit of substantial advantage in discouraging others from seeking a departure). Similarly, in Re Saviker’s Application (No 2) (1973) 26 P&CR 441, no attempt was made by the the company entitled to enforce the covenants (on the Orchard Estate, Staines) to prove that the proposed modification for a second house on a plot would involve them in any appreciable financial loss but the Tribunal found that the maintenance of the principle ‘one plot, one house’ was a substantial advantage to the company and refused the proposed modification. 76 As in Re Munday’s Application (1954) 7 P&CR 130 where freedom from a proposed use for public entertainment in a seafront house, was held to be a practical benefit of substantial advantage to residential occupiers of adjoining houses notwithstanding that if the ‘benefit’ were not insisted upon and the application were granted, the value of those houses would be greatly increased by the prospect that they too could be used for public entertainment. 77 (1982) 47 P&CR 462, at 465. 78 Either expressly or impliedly – as to the latter, see paras 11.161–11.167 above. 79 Re Reynolds’ Application (1987) 54 P&CR 121.

584

Are practical benefits of substantial value or advantage? 20.50 20.47 There seems no reason why a benefit capable of having a value (eg in terms of its enhancement of the benefited land) should not (if that value is less than substantial) be separately considered in the context of whether it nevertheless secures a substantial advantage – and the Tribunal in fact not infrequently refers to a particular benefit as being of substantial value and advantage.80 20.48 The Tribunal cases show that it is the overall package of benefits secured by the restriction in relation to which the question of substantial value or advantage falls to be decided. Accordingly, although any one benefit may not in itself be of substantial value or advantage, two or more such benefits may together amount to ‘benefits of substantial value or advantage’.

Temporary effects 20.49 In Re Kershaw,81 there was a proposal to erect two bungalows on land separated from the objectors’ land by an access driveway, which the covenant relied on restricted to use open space use only. The Lands Tribunal, comprising Douglas Frank QC, accepted that during the period of construction, the objectors would ‘suffer considerably from the noise of builder’s vehicles, from the construction of the driveway and by the general disturbance associated with building works’. He accepted that this would be ‘a considerable disadvantage’ for as long as the work lasted which would be about a year. He continued:82 ‘One of the questions, perhaps the most important question I have to decide, is what weight I should give to this intensive inconvenience and noise generated by builders’ traffic for this very limited period. Clearly for that period the restrictive covenant does secure practical benefits of substantial value or advantage to (the objector). On the other hand, I cannot think that such a literal construction of the section is intended, but rather one should look at the matter in a broader context and regard this as a short term, albeit intensive interference but small and not so substantial in relation to the overall long term enjoyment of the property.’ 20.50 In contrast is the decision in Re Tarhale Ltd,83 the proposal there was to erect two five-bedroom houses on the garden of a plot for which only one plot was permitted by the covenant. There was also a covenant preventing the use of an approach drive by lorries or heavy vehicles, apart from those required for a particular development. On the application to modify the covenant to allow the erection of the five houses, the objectors’ contended they would suffer ‘substantial and intolerable nuisance’ from noise, fumes and dust from builder’s traffic using the driveway. The Tribunal (VG Wellings QC, President) refused the application under paragraph (aa) on the grounds that the restrictions secured practical benefits ‘in preventing the intolerable nuisances, which on the evidence will occur during the construction period’. The Tribunal did not refer in its judgment to Re Kershaw.

80 81 82 83

It was specifically so characterised by the Tribunal in Re SJC Construction Co Ltd’s Application (1974) 28 P&CR 200, at 204 and 206; affd by the Court of Appeal sub nom SJC Construction Co Ltd v Sutton Borough Council (1975) 29 P&CR 322. (1976) 31 P&CR 187. Ibid, at p 189. (1990) 60 P&CR 368.

585

20.51  Section 84(1) of Law of Property Act 1925: para (aa) Re Tarhale was subsequently followed by the Tribunal in taking into account disturbance caused by construction works. 20.51 This apparent divergence in the approach of the Tribunal in the two cases of Re Kershaw and Re Tarhale was confronted, and explained, by Carnwath LJ in Shephard v Turner.84 In a judgment with which the other members of the Court of Appeal agreed, he held that: ‘58 … account must be taken of the policy behind para (aa) in the amended statute. The general purpose is to facilitate the development and use of land in the public interest, having regard to the development plan and the pattern of permissions in the area. The section seeks to provide a fair balance between the needs of development in the area, public and private, and the protection of private contractual rights. “Reasonable user” in this context seems to me to refer naturally to a long term use of land, rather than the process of transition to such a use. The primary consideration, therefore, is the value of the covenant in providing protection from the effects of the ultimate use, rather than from the short-term disturbance which is inherent in any ordinary construction project. There may, however, be something in the form of the particular covenant, or in the facts of the particular case, which justifies giving special weight to this factor”.’ Carnwath LJ went on to say85 that: ‘Viewed in this light, the approaches of the two cases can be reconciled. In Re Kershaw, where the covenant was directed simply to the protection of open space, Mr Frank QC was right in my view to put the emphasis on “the overall long-term enjoyment of the property”; and he was entitled to hold on the facts of the case that protection from the short-term, albeit “intensive”, disturbance during the construction period was not sufficient to be regarded as a “substantial” benefit in its own right. By contrast, in Re Tarhale the covenants were designed to provide special protection against heavy construction traffic, and it was found, taking account of the physical relationship of the properties, that the disturbance from construction traffic would be “intolerable”. On its own facts, I see no difficulty with the decision of Mr Wellings in that case. But it cannot be regarded as providing a precedent for other cases, on different covenants and different facts.’ 20.52 In Shephard v Turner itself, in addition to the covenant preventing the use of the property for any other purpose than as a private dwelling house, the objectors also relied on another covenant which provided that: ‘The Purchaser shall not do nor permit to be done upon the property anything which shall be or become a nuisance or annoyance to the owners or occupiers of the adjoining premises’. Carnwath LJ86 agreed with the objectors that such a covenant was intended to provide protection against temporary as well as long-term annoyance. That was also not necessarily to be confined to ‘nuisance’ by analogy with the common law of nuisance.87 However, no case had been identified in which ordinary 84 85 86 87

586

[2006] 2 P&CR 28. Ibid, at para 59. Ibid, at para 60. In the general law of nuisance, temporary disturbance in connection with ordinary building works will not generally be regarded as amounting to a nuisance, being part of the reasonable give and take of land usage.

Is impeding that user ... (b) contrary to the public interest? 20.56 construction works, carried out with reasonable care, had been held to involve a breach of such a covenant, which was not to be equated with a covenant providing specific protection from construction disturbance. It was for the Tribunal in such a case to assess the evidence on the extent of the construction works that would be involved to establish whether there was anything exceptional about the site or the proposed works to treat this as a factor justifying refusal of modification.88 20.53 Even leaving this more general point to one side, it is also to be borne in mind that, as stated above, when the covenant does not prohibit all development, but merely particular type(s) of development (eg no flats, just houses), the amount of disturbance resulting from the modification proposed to allow development of the type sought (eg flats) may not be significantly greater than if the modification was not made and development of the permitted type was to take place: see, eg Re Marcello Developments Ltd’s Application89 (flats proposed, rather than houses). In such circumstances, if development of another type was likely otherwise to proceed at least, the enforcement of the covenant would not plainly not secure any practical benefit in terms of preventing such disturbance in any event.

QUESTION 5: IS IMPEDING THAT USER … (B) CONTRARY TO THE PUBLIC INTEREST? 20.54

This question arises under paragraph (aa) by reason of section 84(1A)(b).

This is alternative to subsection (1A)(a), considered above and, if made out, it is immaterial that the persons entitled to the benefit of the restriction will suffer a substantial loss or disadvantage (provided that the further requirement, considered below, is satisfied in that money will be adequate compensation for that loss).90 20.55 It was said by Douglas Frank QC, President of the Lands Tribunal, in Re Collins’ Application91 that: ‘[F]or an application to succeed on the grounds of public interest it must be shown that the interest is so important and so immediate as to justify the serious interference with private rights and the sanctity of contract.’ 20.56 As with subsection (1A)(a), subsection (1B) applies which requires the Tribunal, in determining whether, in impeding the proposed user, the restriction is contrary to the public interest, to ‘take into account the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas, as well as the period at which and context in which the restriction was created or imposed and any other material circumstances’.92 If the ‘planning scene’ so revealed is consistent with the user provided for by the restriction, then it will be correspondingly more difficult to show that in impeding the proposed user the restriction is contrary to the public interest. 88 On the facts, whilst the reasoning of the Tribunal ‘could have been more fully expressed’, Carnwath LJ concluded that there was ‘nothing to show that this experienced Tribunal member did not fully understand the issue before him or that his decision is flawed in law’ (para 61). 89 LP/18/199 and LP/31/2000, at para 46. 90 See the judgment of Stephenson LJ in SJC Construcion Co Ltd v Sutton London Borough Council (1975) 29 P&CR 322, at 327. 91 (1975) 30 P&CR 527, at p 531. 92 For a detailed consideration of these matters, see above, para 16.68 et seq.

587

20.57  Section 84(1) of Law of Property Act 1925: para (aa) Further, ‘contrary to the public interest’ has been held by the Lands Tribunal to mean only ‘on balance of advantage contrary to the public interest’.93 20.57 Each of the last two propositions is illustrated by the decision in Re Mansfield District Council’s Application.94 In that case: A covenant restricted the use of land known as Mansfield Cattle Market to markets and fairs generally and specifically to a cattle market. The applicant council who owned the land wished to use it as a leisure centre, for which use it had, as planning authority, granted itself planning permission. However, the town map (which had been informally approved by the Secretary of State) whilst allocating the cattle market land for other purposes, did so on the basis of the provision of an alternative site for a cattle market. This was construed by the Tribunal as indicating that a cattle market should be retained either where it was or at another site and since the council did not intend to provide a cattle market elsewhere, the proposed leisure centre without provision for an alternative site for the cattle market was found to be in conflict with the development plan (and, correspondingly, the restriction was consistent with it). Accordingly, the restriction, although impeding the proposed use as a leisure centre (contrary to that public interest), was not contrary to the public interest for the continuance of a cattle market as revealed in the planning documents. The result was that, in the absence of evidence that there was no suitable alternative site for the leisure centre and that it was wholly impracticable or uneconomic to continue the cattle market at the present site or on another site, the restriction had not been shown to be contrary to the public interest.95 20.58 This decision also illustrates that the fact that planning permission has been granted for a different use from that permitted by a covenant does not of itself signify that the covenant, in impeding that use, is contrary to the public interest.96 20.59 Further, the fact that there is, in a given locality, an acute shortage of building land does not mean that any restriction which prevents building is ipso facto contrary to the public interest97 although it is one consideration which, with others, might cumulatively lead to that conclusion.98 20.60 Equally, the fact that it is government policy to encourage the development of building land at the highest density which is reasonable in the circumstances, and to provide more homes for small households, does not mean that it is contrary to the public interest for a restriction to limit redevelopment by 93 In Re Beardsley’s Application (1972) 25 P&CR 233, at 238. 94 (1976) 33 P&CR 141 (Douglas Frank QC, President). 95 As to the circumstances in which a local authority can, without the need for relief from the Upper Tribunal, disregard the provisions of a restrictive covenant in the exercise of its statutory functions, see Chapter 10. In view of the statutory relief (automatically granted) in such cases, it will only be rarely that a local authority (or certain other public bodies) will have occasion to seek relief from the Upper Tribunal. 96 In the instant case, the significance of the planning permission was minimised by the fact that the applicant council had granted it to itself. But as to the general significance of planning permission in this context, see, also, Re John Twiname Ltd’s Application (1971) 23 P&CR 413, at 419; Re Davies’s Application (1971) 25 P&CR 115, at 135; Re SJC Construction Co Ltd’s Application (1974) 28 P&CR 200, at 205; Re Bromor Properties Ltd’s Application (1995) 70 P&CR 569, 579. 97 Re Beardsley’s Application (1972) 25 P&CR 233, at 238. 98 Re SJC Construction Co Ltd’s Application (1974) 28 P&CR 200, at 205.

588

Is impeding that user ... (b) contrary to the public interest? 20.61 single dwellings at lower densities.99 For that to be the case it would have to be shown to be declared government policy that ‘all low density development, or indeed any existing low density development, is contrary to the public interest and should be replaced by high density development’.100 20.61 Where the user permitted by a covenant is inconsistent with the user designated in the development plan, it equally does not follow that in impeding the designated user, the covenant is contrary to the public interest; and the same applies where the user permitted by a covenant is inconsistent with user permitted by a planning permission. In Re Davies’s Application,101 the Tribunal observed: ‘In effect what a planning permission (or for that matter zoning in a development plan) is saying is that it is not contrary to the public interest that a particular form of development for which application has been made, should be permitted, but that is not the same as saying (as is specifically required under section 84(1A)(b) of the Act), that it “is contrary to the public interest” if that particular form of development is not permitted. The answer to the question whether this present restriction [against building within 100 yards of the benefited land] is “contrary to the public interest” depends, I think, upon the Tribunal being satisfied first that the proposed development is in the public interest, and second that the claims of that interest must be rated above the claims of the private interest served by the restriction, bearing in mind that prima facie the maintenance of contractual obligations is itself an object of public interest. I do not overlook of course the fact of the planning permissions here [for the building of 11 houses on part of the burdened land]. But these are bare permissions; without more evidence they could not possibly prove more than that the permitted development is not contrary to the public interest. The only evidence of public interest here is general evidence as to Somerton’s alleged need for rateable value and to the desirability of building houses to meet a demand from elsewhere in the County of Somerset. Mr Davies [the applicant], I think, had equated public interest with his own personal interest. I have come to the conclusion that such public interest as there may be here is neither so pressing nor so great as to enable me to say that this small application site of only 1.5 acres ought to be made available for building houses and so I am not persuaded that the continuance of the restriction is contrary to the public interest.’ To the same effect is the decision in Re Collins’ Application,102 where a covenant limited the burdened land to one house per acre and the applicant sought modification under paragraph (aa) (and not under any other paragraph) to build 20 houses at an overall density of 3.2 to the acre. The town map, forming part of the approved development plan, zoned the land for residential development, and other policy documents103 showed that it was government policy to encourage 99 100 101 102 103

Nor does the desire to maximise the use of available land mean an existing bungalow ought to be allowed to be developed as a two-storey house: see Re Hawkins [2015] UKUT 564 (LC). Re Osborn’s and Easton’s Application (1978) 38 P&CR 251, at 255. (1971) 25 P&CR 115, at 135. (1974) 30 P&CR 527, at 531 (Douglas Frank QC). See, also, Re Bass Ltd’s Application (1973) 26 P&CR 156, at 159 and 161 (J Smart Daniel QC). Whose admissibility was challenged as being documents not falling under sub-s (1B) and (if that was correct) as amounting to inadmissible hearsay, but which the Tribunal, in the alternative, took into account.

589

20.62  Section 84(1) of Law of Property Act 1925: para (aa) development at high densities and it was the local planning authority’s policy for a density in the area in question of ‘not less than one quarter acre plots’ (thus not ruling out a lower density). In giving his decision, the Tribunal (Douglas Frank QC) said: ‘In my view for an application to succeed on the ground of public interest it must be shown that that interest is so important and immediate as to justify the serious interference with private rights and the sanctity of contract. In my judgment this case comes nowhere near satisfying that test.’104 20.62 Notwithstanding the flavour of the above cases, based on the distinction between planning permission or the development plan, though statutorily relevant for consideration, and the existence of a restrictive covenant, in Graham v Easington District Council,105 the Court of Appeal upheld a decision by the Lands Tribunal to discharge a restrictive covenant in favour of the council imposed on a sale of freehold land in 2000 (‘not to use the property for any purpose other than as a coach depot with an associated bungalow for residential use’ with occupation of the bungalow to be linked with the use of the land as a coach depot) to allow a residential development of 30 houses on the basis the land had been granted planning permission for such development by the council itself as local planning authority based on factors including the need for housing. The practical benefits the council contended were secured by the restriction were its ability to control the development and use of the application land and the prevention of complaints from future householders that would curtail the existing and future industrial use of the industrial estate where the land was located. The Tribunal considered the grant of the planning permission ‘not determinative’ but ‘the best evidence’ there were no practical benefits to it, and discharged the covenant. The Court held that the Tribunal was right to say that the grant of permission was not determinative, but it was otherwise a matter of judgment for the Tribunal and it could not be shown to have gone wrong. 20.63 Where a residential building has been erected, or partly erected, in breach of covenant, then in times of housing shortage, if the Tribunal considers that there is a real risk of a mandatory injunction being granted for its demolition, it may consider that, in ‘impeding’ the development in that way, the restriction in the covenant is contrary to the public interest: see Re SJC Construction Co Ltd.106 The Tribunal in that case found that although the applicants were rash in commencing the development, they acted in good faith in that they did not intend to force the hand of the owner of the benefited land. In deciding to exercise its discretion in the applicant’s favour, it took this into account together with the following factors, namely: (i) that planning permission for the flats had been granted; (ii) that although the flats would have an adverse effect on the benefited land, that effect could not reasonably be described as serious;

104 To the same effect are the decisions in Re Brierfield’s Application (1976) 35 P&CR 124; Re New Ideal Homes Ltd’s Application (1978) 36 P&CR 476, at 480; Re Osborn’s and Easton’s Application (1978) 38 P&CR 251, at 255; Re Bromor Properties Ltd’s Application (1995) 70 P&CR 569, 579. (But for a more recent case which met the requirments, see Re Hounslow and Ealing London Borough Council’s Application (1995) 71 P&CR 100. 105 [2008] EWCA Civ 1503. 106 (1974) 28 P&CR 200.

590

Is impeding that user ... (b) contrary to the public interest? 20.66 (iii) that there was a scarcity of building land in the whole of south-east England, including the area in question; (iv) that the building work so far done would be wasted if modification was not granted; (v) a substantial amount of compensation could be awarded. 20.64 On the other hand, the fact that a restriction on the number of houses to be built on a particular piece of land would result in one part of that land being ‘wasted’ rather than beneficially used if the restriction was not modified, because the developers had already begun building the total permitted number of houses on a small part of it, has been held by the Tribunal not to be contrary to the public interest.107 20.65 Where development which infringes a restriction has already been carried out, as by the erection of houses in excess of the permitted number,108 then an applicant might seek to mount an argument that, unless the restriction is modified, there would be a danger that injunction proceedings might lead to an order for the demolition of the houses and that demolition would in itself be contrary to the public interest. However, the conflicting public interest in avoiding an encouragement to build in breach of covenant to create a favourable status quo (rather than allowing objectors to have their objections determined on their merits unskewed by a state of affairs created in disregard of their interests) ought surely to mean that such an argument should not succeed in the absence of exceptional circumstances, or at least some other factor, such as a pressing social need in the area for houses of the type built. 20.66 In Millgate Developments Ltd v Smith,109 the Tribunal (presided over by the Deputy President),110 considered the position without any express reference to the importance of not allowing developers to steal a march and ordered the modification of a covenant on the basis of the waste that would otherwise be involved in preventing 13 affordable houses built in breach of a restrictive covenant from being used to meet a pressing need for such housing. The 13 affordable houses had been built in breach of a restrictive covenant preventing any buildings from being erected. The persons entitled to the benefit of the covenant were the trustees of a children’s hospice occupying adjoining land. The covenant was found by the Tribunal to secure to them practical benefits of substantial value or advantage, as the setting of the hospice would be adversely affected and recreational areas in the grounds would no longer be as private and secluded as they would otherwise be. There was no evidence the applicant was unaware of the covenant when it proceeded. However, the restrictions were considered to operate contrary to the public interest in that if they were not modified there would be a waste of the affordable units, built in accordance with planning permission, which would otherwise be immediately available to meet a pressing social need for such housing in the area. At the same time, the Tribunal was able to make a substantial award of compensation, including a large sum to enable screening to mitigate the effects.111 107 Re New Ideal Homes Ltd’s Application (1978) 36 P&CR 476, at 480. Cf Millgate Developments Ltd v Smith, below. 108 Cf Wrotham Park Estate Co v Parkside Homes Ltd [1974] 1 WLR 798. 109 [2016] UKUT 515 (LC). 110 Martin Rodger QC, sitting with Paul Francis FRICS. 111 Totalling £150,000 in all.

591

20.67  Section 84(1) of Law of Property Act 1925: para (aa) 20.67 The Tribunal112 made, however, some wider observations which cast doubt on the statement of Douglas Frank QC in Re Collins’ Application (para 20.61 above). It said that: ‘In reaching that conclusion we are mindful of the Tribunal’s early jurisprudence in public interest cases, and in particular of the dictum of Douglas Frank QC in Re Collins’ Application (1975) 30 P&CR 527, 531 that for an application to succeed on the ground of public interest it must be shown that that interest is “so important and immediate as to justify the serious interference with private rights and the sanctity of contract”. Whether that restrictive gloss remains the correct approach may require reconsideration in light of Carnwath LJ’s explanation of the policy underlying ground (aa) in Shephard v Turner113 and Lord Sumption’s observations on the reconciliation of public and private rights in Lawrence v Fen Tigers,114 but it is not necessary to pursue that thought further at this time. We are satisfied that the public interest in play in this case is sufficiently important and immediate to justify the exercise of the Tribunal’s power under section 84(aa) [sic] to override the objector’s private rights.’ Whilst these comments expressly do not constitute a decided view on whether the comments of Dougas Frank QC in Re Collins are still of relevance, the clear suggestion is that the Tribunal might now look more favourably on, and view as more important, the tangible public benefits of modification as compared with the upholding of private rights and the ‘sanctity of contract’. 20.68 However, Carnwath LJ (as he then was) in Shephard v Turner did no more than say, ‘The section seeks to provide a fair balance between the needs of development in the area, public and private, and the protection of private contractual rights’ and the comments of Lord Sumption in Lawrence were made (obiter) in a case where an injunction to restrain a nuisance was being considered. No consideration was given to the weight to be given (in the public interest) to covenants which give land rights to others in the form of protection of their property, which were not there in issue. 20.69 Though the Tribunal in Millgate considered there to be ‘obvious parallels between the approach which the courts should take to the remedies in cases of nuisance sanctioned by planning permission and the approach which the Tribunal should take to the public interest limb of section 84(1)(aa)’, the point just referred to raises a wider issue. 20.70 In Re Land at Sandy Lane, Dee Banks, Chester115 the Tribunal (again headed by the Deputy President)116 stated that the fact that a proposed use of land 112 Martin Rodger QC, sitting with Paul Francis FRICS. 113 [2006] 2 P&CR 28: ‘The general purpose is to facilitate the development and use of land in the public interest, having regard to the development plan and the pattern of permissions in the area. The section seeks to provide a fair balance between the needs of development in the area, public and private, and the protection of private contractual rights’. 114 [2014] AC 822, at para 157, where he pointed out that a use may be a breach of a private right yet may at the same time ‘be a use which is in the interest of very many other people who derive enjoyment or economic benefits from it of precisely the kind with which the planning system is concerned’, and said that, ‘The obvious solution to this problem is to allow the activity to continue but to compensate the claimant financially for the loss of amenity and the diminished value of his property. In a case where planning permission has actually been granted for the use in question, there are particularly strong reasons for adopting this solution. It is what the law normally provides for when a public interest conflicts with a proprietary right’. 115 [2016] UKUT 457 (LC). 116 Martin Rodger QC, sitting on this occasion with Peter D McCrea FRICS.

592

Is impeding that user ... (b) contrary to the public interest? 20.71 would be in the public interest is not enough in itself to satisfy paragraph (b) of section 84(1A). What is required is that in impeding that use the restrictions are contrary to the public interest – with due weight to be given to the public interest in not imposing serious damage on covenant holders unless there is a pressing need to do so. Thus, the fact that Chester University needed to improve facilities for its students and had inadequate rowing club accommodation, with no alternative site available, meant, the Tribunal decided, that the proposed use of the University’s land for a new boathouse would be in the public interest.117 However, it was not considered to outweigh the ‘counterbalancing public interest’ in not imposing on a neighbour the extreme damage that would be caused to the amenity and enjoyment of his garden, and the damage modification of the covenant to allow this would do to the enforceability of the scheme of mutual covenants.118 The statement by Douglas Frank QC in Re Collins’ Application, at para 20.61 above, was quoted119 as meaning that ‘in weighing this balance between public interest and private rights, considerable weight should be given to private rights’. The way it was put subsequently, however, was that the upholding of private rights (the more acute where serious damage would be caused by overriding them) is in itself part of the public interest, against which any public interest in the benefits of what is sought to be done need to be weighed, which was, in fact, how the Tribunal approached the matter. However it is put, it may be thought to amount to much the same thing in terms of the result. 20.71 The focus of the words used in section 84(1A) itself appears to be whether the restriction, in impeding the proposed user, is (b) ‘contrary to the public interest’. The fact the restriction is in place by reason of a freely entered into covenant giving rights to another for the protection of their land could be said, on a narrow view, not to affect the question of whether the restriction itself, in impeding the proposed user, is contrary to the public interest. However, there must be degrees of public interest and varying extents to which a restriction imposed by a covenant in impeding a particular use is contrary to the public interest. Further, even if such a narrow view of the words used was taken, and section 84(1A)(b) was regarded as satisfied, when it comes to the exercise of the Tribunal’s discretion whether to modify or discharge the restriction, which discretion has thereafter to be exercised,120 it must, at least at that stage, be appropriate to take into account that the restriction is there by reason of a covenant freely entered into, giving land rights for the protection of the property of another, in weighing whether the extent to which the restriction imposed by the covenant is ‘contrary to the public interest’ means that it ought to be discharged in the exercise of the Tribunal’s discretion. As part of the exercise, either at stage 1 in deciding whether paragraph (b) is met, or at least at stage 2, when exercising discretion, such things as, on the one hand, the age of the covenant and the extent of the damage that will be done to protected private interests by its modification or discharge, need to be weighed

117 118 119 120

Ibid, at para 81. Ibid, at para 84. Ibid, at para 83. See above para 16.56 et seq.

593

20.72  Section 84(1) of Law of Property Act 1925: para (aa) against the extent of the public benefit in allowing to be done that which is sought. Due weight must surely be given in this exercise to the private rights. Where the damage will be large, the public benefit will need to be greater than where it is small, to justify the exercise of the discretion in the applicant’s favour. A small public benefit might not be sufficient when weighed against major private damage. It is suggested that approached in this way, the statement of Douglas Frank QC in Collins (which has often been followed) remains an appropriate one. 20.72 See above as to the extent to which such things as the recency of the covenant,121 the fact the applicant is the orginal covenantor,122 and past conduct in committing a breach of the restriction sought to be modified or discharged123 are relevant to the exercise by the Tribunal of its resulting discretion. 20.73 In Re Lloyd’s and Lloyd’s Application,124 the Tribunal appeared to have departed from the restraint which it had previously shown in relation to the ‘contrary to the public interest’ test in relation to the need to show that the use sought could not take place on land elsewhere, so that there was a public interest in using the particular land the subject of the application.125 The facts in that case were as follows: The applicants were the owners of a large house (in which they lived) in a primarily residential suburb of Worthing and had obtained planning permission for a ‘change of use to community care home for persons under 65 years of age, with a maximum of 10 residents’. With effect from April 1993, responsibility for community care in the area would pass from the area health authority under the Department of Health to the Worthing local authority and the applicants (who had the necessary nursing and managerial qualifications and experience) wished to contract with the local authority to supply community care. The house (in common with other houses in the area) was subject to a covenant ‘Not to carry on … any trade or business whatsoever (but this restriction shall not prohibit the carrying on of any professions or a school or boarding house)’. They applied to the Tribunal for modification of the restriction so as to permit its use as a residential care home for not more than 10 psychiatric patients. The Tribunal found that pursuant to a recently-introduced government policy for rehabilitation of psychiatric patients within the community, there was a ‘desperate need’ somewhere in the Worthing area for premises suitable for use as such a community care home and held that the existence of this need, coupled with the suitability of the applicants’ large house for the purpose and the fact that the applicants were well qualified and willing to adapt the house for that use, were together sufficient to entitle the applicants to the required modification on the ground that the restriction, in impeding that user, was contrary to the public interest.126 121 122 123 124 125 126

594

See para 16.83 et seq. See para 16.92 et seq. See para 16.123. (1993) 66 P&CR 112. Ibid, at 122 (HH Judge Marder QC). Whilst the Tribunal expressed itself as prepared to grant the application on this ground, it also held that the application succeeded on grounds (aa) and (c) in s 84(1).

Is impeding that user ... (b) contrary to the public interest? 20.76 20.74 However, the Tribunal has generally insisted that in the absence of evidence that there are no alternative premises in which the relevant public interest could readily be met, it cannot be ‘satisfied’ that the public interest is impeded by a covenant affecting the applicant’s particular premises.127 Indeed, in Re O’Reilly’s Application,128 decided just six months after the Lloyd’s case, it was submitted that a restriction confining the use of land to the parking and garaging of cars on land in Chatham, Kent, was contrary to the public interest in that it impeded the building of six houses on the land for which planning permission had been granted. The same Tribunal as sat in Lloyd’s case129 rejected the submission on the ground that no evidence had been adduced as to the availability of housing land in Chatham and that therefore the Tribunal ‘cannot be justified in concluding that withholding this site from development for six dwellings is contrary to the public interest’. A similar conclusion was reached, again by the same Tribunal as in Lloyd’s case, in Re Hopcraft’s Application.130 20.75 In Re Milbury Care Services Ltd’s Application,131 which involved a care home application, the same Tribunal132 again have accepted that evidence of the unavailability of suitable premises elsewhere will generally be necessary, and implied that was the position in Lloyd’s case in fact. The President, distinguishing Lloyd, said: ‘That conclusion points to a fundamental difference between that and the present case. It is evident that there is a need to accommodate these old ladies in the community, that these premises are suitable and that the Applicants provide the necessary service. But it formed no part of the Applicants’ case that accommodation fulfilling the necessary requirements could not be found elsewhere in Sandwell, and there was no evidence that alternative accommodation would be impossible or difficult to find.’133 It held that the Applicants’ public interest case was not made out. 20.76

This approach has been followed since.

In Re Afzar’s Application,134 an application for the modification of a covenant to allow the use of the land for a residential home for the elderly on the basis of the public interest test was dismissed on the basis there was ‘no evidence that the public interest required having an old people’s home on this site’. The words of the President in Milbury, quoted above, were cited. 127 See, eg Re Mansfield District Council’s Application (1976) 33 P&CR 141 at 146 (Douglas Frank QC); Re Wallace & Co’s Application (1993) 66 P&CR 124 at 128 (a decision of His Honour Judge Marder QC given one week before his decision in the Lloyds’ case); Re Hopcraft’s Application (1993) 66 P&CR 475, at 484, and Re O’Reilly’s Application (1993) 66 P&CR 485, at 489 (both decisions by HH Judge Marder QC (now President) given six months after the Lloyds’ case). 128 (1993) 66 P&CR 489, above. 129 HH Judge Marder QC, now President. 130 (1993) 66 P&CR 475, at 484. See also Re Wallace & Co’s Application (1993) 66 P&CR 124 at 128, a decision of Judge Marder QC given a week before Lloyd’s case. 131 (1995) LP/78/1995. 132 HH Judge Marder QC, President. 133 In attempting to distinguish the Lloyd’s case, the Tribunal appeared to suggest it was fundamentally different in this respect, which might perhaps have been based on some indication that the desparate need for the application premises to be used arose out of the unavailability of alternative premises elsewhere, though this is not clear from the report of it. 134 [2002] 1 P&CR 17.

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20.77  Section 84(1) of Law of Property Act 1925: para (aa) Were it otherwise, if in any particular case it was established that the promotion of some activity (such as a trade or industrial process on land restricted to agricultural use) was in the public interest, then subject to the restricted premises being otherwise suitable for the purpose and to there being persons who were able and willing to pursue that activity in them, it would prima facie follow that in impeding that activity, the restriction was contrary to the public interest despite the absence of any evidence showing the same purpose could not be achieved by using a different site.

QUESTION 6 (UNDER SUBSECTION (1A): IF THE ANSWER TO QUESTION 4 IS NEGATIVE (IE THE PRACTICAL BENEFITS TO THE OBJECTOR ARE NOT OF SUBSTANTIAL VALUE OR ADVANTAGE) OR THE ANSWER TO QUESTION 7 IS AFFIRMATIVE (IE THE RESTRICTION IS IMPEDING THE PROPOSED USER CONTRARY TO THE PUBLIC INTEREST), WOULD MONEY BE AN ADEQUATE COMPENSATION? 20.77 If the Tribunal is first satisfied as to one or other of the requirements of section 84(1A) (a) (no loss of practical benefits of substantial value or advantage) or (b) (the restriction is contrary to the public interest) considered above, this is a further requirement set out in section 84(1A) for satisfaction of paragraph (aa) in order for the restriction to be discharged or modified. 20.78 The Tribunal may not be satisfied that money will be an adequate compensation for one of two reasons, namely: (1) because, under (a) (practical benefits not of substantial value or advantage) or under (b) (the restriction is contrary to the public interest) the amount of money which it has power to award as compensation under section 84(1) (i) and (ii) would not be adequate compensation; or (2) because money per se would not be an adequate substitute for the loss or disadvantage which would be suffered from the discharge or modification. 20.79 The topic of the measure of compensation is considered in detail in Chapter 21, but the following points in relation to these two matters fall to be noted here.

(1) Whether the amount of money which the Tribunal has power to award as compensation will be adequate compensation 20.80

Subject to the exceptions set out in paras 20.91–20.93 below:

If the Tribunal has found that the proposed user will not result in the loss of any practical benefits of substantial value or advantage (the first limb of section 84(1A), then that finding will mean that if compensation falls to be assessed under paragraph (i) of section 84(1),135 the level of any compensation will not be substantial (since under that paragraph it would be ‘a sum to make up for any loss or disadvantage suffered’). 135 Set out at para 23.1 below (as well as in Appendix 1).

596

Would money be adequate compensation? 20.83 Conversely, where in the course of the hearing it appears that the compensation for any loss resulting from a modification or discharge would be substantial, then subject to the two exceptions referred to below,136 this may rule out a finding that the practical benefits lost are not of substantial value or advantage.137 20.81 This point was made in Re Vaizey’s Application,138 where the Tribunal observed that if the compensation was substantial: ‘… there will be few cases (and the few will be cases where public interest is concerned) where the new jurisdiction under paragraph (aa) can be exercised at all; because the compensation will almost invariably demonstrate that the benefit is of substantial value to the person entitled to it.’ 20.82 Thus, in Re Wimpey Homes’ Application,139 a diminution in value of 7.5 per cent was held to show that the practical benefits of the restriction to the owners of a benefited property were of substantial value and advantage. The applicant therefore failed to substantiate ground (aa) – and that conclusion meant, as the Tribunal put it, ‘that question 6 (whether money would be an adequate compensation for the modification) does not arise’.140 More recently, in Re Snooks’ Application,141 a reduction of £50,000, which would equate to 13 to 15 per cent of the value of the benefited property, if a house was permitted to be built on the application site, was held by the Tribunal to show that the benefit to the covenants preventing this secured a practical benefit which was of substantial value to the objectors. 20.83 In contrast, in Re Jilla’s Application,142 a payment of £10,000 (representing about 1.5 per cent of the value of the objector’s house) was held to be adequate compensation for the loss of the benefits secured by a covenant preventing an extension to an adjoining house being built, and the benefits secured were not, therefore, in the President’s view, of substantial value or advantage. Similarly, in Re Pottier’s Application,143 compensation of 2.5 per cent (£6,875) representing the diminution of value in the objector’s property was awarded on modification.144 136 Below at paras 20.91–20.93. 137 However, as the cases referred to above show, the test of ‘substantial’ is not necessarily the same in each of the two contexts. 138 (1974) 28 P&CR 517, at 526 (freeholder of a block of flats let on long leases awarded £75 for loss of benefit of no substantial value or advantage). 139 [2011] UKUT 91 (LC). 140 In Re Foleys’ Application (2008) LP/58/2006, a reduction of £75,000, equating to about 8 per cent of the value of the house with the benefit of the covenant was held to be ‘a substantial sum, both in absolute and relative terms’. In refusing to modify the covenant there, the Tribunal added that, ‘Moreover, money aside, the prospect of residential development on the application site would be a particular disadvantage to the objectors, accustomed as they were to the existing situation’, going beyond just the loss in value. 141 [2016] 1 P&CR DG 18. 142 [2000] EGLR 99. 143 [2010] UKUT 206 (LC). 144 Despite somewhat unsatisfactory expert evidence, the Tribunal (Mr Peter D McRea FRICS) doing the best that it could in the circumstances. A similar 2.5 per cent reduction in vaue of the benefited property was found. See also Re Rae [2016] UKUT 0552 (LC), referred to at para 23.10 below, where a diminution in the likely value of benefited houses was, in the absence of convincing expert evidence, found by the Tribunal (HHJ Behrens and Mr Peter D McRea FRICS) using its own judgment to amount to ‘less than 2 per cent’, which was considered not to be substantial.

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20.84  Section 84(1) of Law of Property Act 1925: para (aa) Likewise in Re Lynch,145 where the Tribunal said in relation to a 2.5 per cent reduction in value (£25,000), ‘Having regard to the effect on value of the two adjoining properties as a likely percentage of their capital values, I do not consider that the benefits secured by the covenant are of substantial value or advantage, and I am satisfied that money would be an adequate compensation’.146 In Re Kerais’ Application,147 a reduction in value of £75,000, representing 5 per cent of the £1.5m value of the benefited land was considered by the Tribunal not to be substantial for the purposes of section 84. The covenant was discharged on ground (aa) and this sum awarded as compensation.

Cases in which the sum able to be awarded by the Tribunal was considered an adequate compensation for the loss of practical benefits which were not of substantial value or advantage 20.84 In Re Mercian Housing Society Ltd’s Application (1971) 23 P&CR 116, the Tribunal awarded two objectors sums of £500 and £250 respectively to enable them to pay for certain screening to overcome any loss of seclusion and privacy from the erection of five blocks of flats. In Re John Twiname Ltd’s Application (1971) 23 P&CR 413, awards of £250 and £100 respectively were made to two objectors for loss of amenity in respect of the building of nine houses of which the nearest would be 50 feet inside the restricted area of 200 feet measured from the benefited land. In Re Carter’s Application (1973) 25 P&CR 542, the Tribunal found that views (or glimpses) of the sea from four houses would be impaired to some small extent by the construction of a semi-bungalow on the restricted land. However, the Tribunal also found that this would not result in any depreciation in the market value of any of the houses but it made awards of compensation ‘by way of solatium’ to three of the owners as follows: to one, £200 for partial loss of sea view; to another, £100 for loss of outlook over a pleasant garden; and to the third, £200 for the partial loss of a pleasant outlook and for general disturbance during building operations. In Re Kershaw’s Application (1975) 31 P&CR 187, awards of £250, £500 and £750 were made in respect of the disadvantages which would be suffered from the erection of three bungalows, including disturbance during construction and ‘consumer surplus’ described as ‘loss peculiar to the occupier of a house, for example, the mere alteration in the local environment’. In Re Dransfield’s Application (1975) 31 P&CR 192, £1000 was awarded primarily in respect of depreciation of the benefited house in Wimbledon valued (in 1975) at £60,000 which would result from the construction of an additional house on adjoining land. In Re Banks Application (1976) 33 P&CR 138, a sum of £2,000 to each of two objectors was awarded in respect of a slight obstruction by the proposed bungalow

145 [2016] UKUT 488 (LC). 146 Ibid, at para 70. 147 [2014] UKUT 153 (LC): see para 89.

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Would money be adequate compensation? 20.84 of the view to the sea from the objectors’ terrace houses plus interference from ‘the concomitants of living’ (lights, car noises, car headlights, television aerials, clothes lines, dustbins, etc). In Re Gaffney’s Application (1974) 35 P&CR 440, £1,500 was awarded in 1974 for depreciation of an objector’s house (then worth £45,000) resulting from the construction of an additional house 50 yards away. In Re Doig’s Application (1980) 41 P&CR 261, £2,500 was awarded for depreciation to the owner of a house on the Wimbledon House Estate adjacent to a strip on which an additional house would be built. In Re Austin’s Application (1980) 42 P&CR 102, sums of £750 and £2,000 respectively were awarded in respect of depreciation to two houses resulting from an additional house proposed to be built on a sub-plot of one-quarter of an acre (the estate covenants providing for two houses to the acre). In Re Edwards’ Application (1983) 47 P&CR 458, a sum of £500 was awarded to the next-door neighbour of the applicant in respect of a minor ‘change in the environment’ (but specifically not in respect of any depreciation in the value of the objector’s property – no depreciation being found) attributable to the proposed user as a general village stores of a building newly-erected (pursuant to planning permission) between the applicant’s house and garage. In Re Da Costa’s Application (1986) 52 P&CR 99, an award of £2,500 was made in respect of depreciation in the value of the freehold of a house which was occupied by a licensee who had indefinite security of tenure under the Rent (Agriculture) Act 1976, by reason of the proposed construction of a bungalow on adjoining land. In Stockport Metropolitan Borough Council v Alwiyah Developments (1986) 52 P&CR 278, CA, the Court of Appeal upheld the Tribunal’s award of £2,250 in respect of the diminution in the sale value of 11 of the council’s houses (occupied by tenants) due to the loss of a pleasant view over the burdened land when the proposed houses were built. In Re Reynolds’ Application (1987) 54 P&CR 121,148 a covenant requiring plans to be submitted for approval before erecting any building was modified so as to dispense with such approval. It was not disputed that the covenant did no more than require approval of plans and could not have been used to prevent the erection of a house (which had in fact already been built). The Tribunal awarded the sum of £500 to the persons entitled to the benefit of the covenant to compensate them for their loss consisting of the possibility that they might have obtained some minor changes in the plans to their advantage. In Re Hextall’s Application (2000) 79 P&CR 382, two objectors were awarded a figure representing a 2.5 per cent diminution in the value of the benefited land (£2,500), together with £500 each for the effects of increased traffic and construction disturbance. In Re Marcello Development Ltd’s Application LP18/1999 and LP31/2000, there was no loss of value, but the use restriction conferred a practical benefit to

148 At 123.

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20.85  Section 84(1) of Law of Property Act 1925: para (aa) particular objectors in that it enabled ‘their present personal preference, which is for houses rather than flats, to be realised to a greater extent than if the restriction were not modified, and reduces the anxiety which some of them feel, but for which there is no justifying evidence, about subsidence’, and ‘a small payment of £2,500 per house to those who have maintained their objections’ was awarded as ‘adequate compensation for these personal disadvantages’. In Re Coles’ Application (2004) LP/2/2003 there was some intrusion to the objector’s front garden, which would have little if any effect on the sale price that would be achieved if the property were sold – £10,000 awarded for ‘this marginal loss of privacy’. In Re Turner’s Application (2005) LP/45/2003 eight objectors were awarded between £200 and £750 because they would suffer temporary losses while the new house is in course of construction, in the form of noise, dust, disturbance and possible parking and access difficulties. In Re Chojecki’s Application (2005) LP/32/2003 £500 was awarded to reflect the displeasure the objectors, as existing owners and residents, would feel about the appearance of the new house when passing the application land and their concern about the increased risk to the existing trees on the site (though currently protected by a planning condition). In Re Carbury 2000 Ltd’s Application (2006) LP/84/2004 £3,000 was awarded for temporary disruption to the adjoining owner during construction works, changes to the boundary treatment and for the marginal changes in outlook and overlooking. In Re Robinson’s Application [2010] 1 P&CR 20 two properties were awarded £5,000 and £10,000 respectively for diminution in value (under two per cent of their open market value) plus additional compensation of £1,000 to each of the objectors to reflect the disruption and possibility of damage from temporary construction traffic. In Re Perkins [2013] JPL 236 (on remission by the CA) in respect of overlooking: £2,000 was awarded in the case of two houses affected and £1,000 in the case of a third. In Re Lynch [2016] UKUT 488 (LC) £25,000 was awarded to one objector for reduction in value (of 2.5 per cent) due to having a house ‘shoehorned’ into adjacent land with some overshadowing and £15,000 (1.5 per cent) was awarded to another objector for overshadowing of their garden (reduction of 1.5 per cent in value). In Re Rae’s Application [2016] UKUT 552 (LC) diminution in value of £5,000 was awarded in respect of one property and £2,500 in respect of another property (amounting to less than two per cent of the likely value of the properties) as a result of factors such as an increase in traffic at the end of a cul-de-sac, the proximity of the new dwelling house proposed and some effects on views. 20.85 In each of the above cases, although under section 84(1)(i) the sum which the Tribunal could award could not exceed the sum required ‘to make up for’ the ‘loss or disadvantage suffered … in consequence of the discharge or modification’, the Tribunal was satisfied that the sum which it could and did award was ‘adequate compensation for the loss or disadvantage’ in the circumstances of the case. Naturally, in so far as the sums awarded reflected 600

Would money be adequate compensation? 20.86 assessments by reference to the monetary values of the day, an appropriate multiplier would now have to be applied to take account of the effects on such sums of subsequent changes in the value of money.

Cases in which applications have been granted under paragraph (aa) without compensation 20.86 Occasionally,149 the Tribunal has made an order for modification under paragraph (aa) without awarding any compensation: see for example EMI Social Centres Ltd’s Application,150 Re Bennett’s and Tamarlin Ltd’s Applications,151 Re Lloyd’s and Lloyd’s Application152 and Re Poulton’s Application.153 In the first three cases, there was no loss of amenity or any diminution in the value of the objectors’ properties and their claims for compensation for loss of bargaining power were rejected on the ground that the Tribunal had no power to award compensation for that type of loss154 or alternatively (in the Bennett and Tamarlin case) if it had power, it would, as a matter of discretion, decline to exercise that power.155 In the fourth case, a restriction in a section 52 agreement156 which prohibited the use for habitable purposes of the existing roof space in a bungalow was discharged without compensation under both paragraphs (aa) and (c) on the ground that there would be no injury to the covenantee council.

149 See also the pre-1970 case of Re Harte-Lovelace’s Application (1954) 7 P&CR 147 (Sir William Fitzgerald QC). 150 (1979) 39 P&CR 421. 151 (1987) 54 P&CR 378, at 385.See, also, Re Lloyds’ and Lloyds’ Application (1993) 66 P&CR 112, at 123. 152 (1993) 66 P&CR 112. 153 (1992) 65 P&CR 319, at 323. 154 See below, para 23.38 et seq. 155 As has been seen (at para 20.18 above), loss of bargaining power is not a ‘practical benefit’, so that it is not an impediment to the Tribunal exercising its jurisdiction under paragraph (aa). However, this does not, in itself, conclude the question whether compensation ought to be awarded for such loss since the only requirement under sub-s (1A) (which is part of paragraph (aa)) for such an award is that the compensation must be considered to be adequate for the loss or disadvantage which will be suffered ‘from the discharge or modification’ (not from the loss of any ‘practical benefit’). However, the power to award the compensation referred to in sub-s (1A) is conferred by s 1(1)(i) which permits the making of an award only for a ‘loss or disadvantage suffered … in consequence of the discharge or modification’. In Re EMI Social Centres Ltd’s Application (1979) 39 P&CR 421, at 427 (VG Wellings QC), the Tribunal held that loss of bargaining power ‘derived, not from the modification permitted by the Tribunal, but from the exercise by the Tribunal of its statutory power’. This reasoning was further elaborated by Eveleigh LJ in Stockport Metropolitan Borough Council v Alwiyah Developments (1986) 52 P&CR 278, at 282, CA as follows. ‘It may be possible to envisage a case where a loss of disadvantage which is only a financial one and not a practical benefit is a proper subject for consideration. I would not wish to decide that the loss or disadvantage can only be a practical one … However, it must always be shown that the loss has been suffered in consequence of the modification … Any loss of a greater sum that might have been obtained by bargaining is not, in my opinion, a consequence of the discharge or modification of the covenant, but a consequence of the failure to negotiate some other sum before the powers of the Lands Tribunal under s 84 were invoked’. But where the practical benefit or advantage lost consists of or includes loss of amenity then the compensation may be assessed on the basis of the sum which might have been regotiated for the release or modification of the restriction and thus may be substantial. 156 Ie an agreement under s 52 of the Town and Country Planning Act 1971, as to which, see para 10.8 above.

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20.87  Section 84(1) of Law of Property Act 1925: para (aa)

Cases in which applications have been refused under paragraph (aa) because the Tribunal was not satisfied that money would be an adequate compensation 20.87 In Re Beardsley’s Application,157 the Tribunal, whilst expressing the view that a proposed block of 12 flats and 12 garages (on land restricted to two dwelling houses) would materially affect the objectors’ enjoyment of their properties so as to be not far from the borderline of practical benefits of substantial value, added that in any event the case was not one where money would be an adequate compensation on the basis that the objector’s views in relation to noise and disturbance in the garden were subjective and personal though they may not adversely affect value of her property and that she did not want to move, which may not be capable of measurement in money terms. Similarly, in Re Livingstones’ Application,158 the Tribunal found it unnecessary to resolve the conflict of evidence as to whether the practical benefits which a restriction against external alterations and additions conferred on the objector were (in the context of an offending car port) substantial since ‘the loss or disadvantage which would be suffered by the company [objector] if the proposed modification [permitting the applicants to retain the car port they regarded as an ‘eyesore’] were to be allowed cannot be adequately met by payment of compensation expressed in monetary terms’. Again, in Re Quartleys’ Application,159 a covenant with the Waveney District Council under section 52 of the Town and Country Planning Act 1971160 restricting the occupation of a bungalow to a person solely or mainly employed or last employed in the locality in agriculture, was held, on the facts, not to secure practical benefits of substantial value or advantage to the council. But the Tribunal added that it was unable to hold that money would be an adequate compensation for the loss of the insubstantial practical benefit in question, namely an increase, however slight, in the pressure on the council to permit the erection of a new house for occupation by an agricultural worker in the open countryside, contrary to its planning policies. The application for the discharge of the covenant accordingly failed. 20.88 As in all section 84(1) cases, the amount which the Tribunal could have awarded in the last two cases as compensation was circumscribed by the limits imposed by section 84(1)(i). In the Beardsley case, the evidence adduced on behalf of the applicant was to the effect that the proposed block of flats would not diminish the value of the objectors’ properties and there appears to have been no conflicting evidence on this point. Accordingly, the only loss for which the Tribunal could have awarded a sum as compensation was the loss referable to the interference with the objectors personal enjoyment of their properties – which (unless there was interference with amenity, such as a view) would almost inevitably have been limited to small

157 158 159 160

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(1972) 25 P&CR 233, at 237. (1982) 47 P&CR 462, at 465. (1989) 58 P&CR 518, at 525. See footnote 156 above, and now ss 106 and 106A of the Town and Country Planning Act 1990, considered in Chapter 32.

Would money be adequate compensation? 20.90 sums by way of solatium161 or in respect of ‘consumer surplus’162 and which in turn no doubt led to the Tribunal finding itself unable to be satisfied that money would be an adequate compensation. The decision may well have been different if the evidence had shown a significant (but still not substantial) loss consisting of a reduction in the capital value of the objectors’ properties.163 In the Livingstones case, it is not clear whether the Tribunal’s decision that monetary compensation would be inadequate was based upon the inadequacy of the level of compensation which the Tribunal had power to award or whether money per se would not, in the circumstances, be an adequate compensation. In that particular case, the issue was no doubt of little or no importance, but such an issue may arise in an acute form in the cases (considered below) where the Tribunal has power to award substantial compensation. Similarly, in the Quartleys case, the slight additional pressure which the council might have been subject to in the future to grant planning permission for a further house restricted to agricultural occupancy would no doubt have justified only a small amount of compensation which would not adequately compensate the council for its loss. But this was, in any event, a ‘section 52’ covenant which may be considered as giving rise to uncompensatable losses by members of the public for whose interests the council is the guardian.164 It may well be, therefore, that the Tribunal was taking the view that, quite apart from the question whether the level of compensation which it could award would be an adequate substitute for the loss or disadvantage which would be suffered from the discharge, money per se would not, in the circumstances, be an adequate substitute.165 20.89 Where the covenant is modified on the public interest ground in s 84(1A)(b), the compensation may be substantial. 20.90 An example is Millgate Developments v Smith,166 where 13 affordable houses were built in breach of a restrictive covenant in favour of an adjoining 161 See Re Carter’s Application (1973) 25 P&CR 542 referred to at para 20.84 above, where the application was granted. A comparison of the facts in this case and also of the facts in Re Kershaw’s Application (1975) 31 P&CR 187, referred to at para 20.84 above, with those in Re Beardsley’s Application demonstrates the fineness of the line which may affect the Tribunal’s decision as to whether money will be an adequate compensation. 162 See Re Kershaw’s Application (1975) 31 P&CR 187, referred to at para 20.84 above. Compare, also, the decision in Re Mercian Housing Society Ltd’s Application (1971) 23 P&CR 116. 163 See, for example, Re Gaffney’s Application (1974) 35 P&CR 440 and Re Doig’s Application (1980) 41 P&CR 261, referred to at para 20.84 above. 164 See Gee v National Trust for Places of Historic Interest or Natural Beauty [1966] 1 WLR 170, CA. There appears to be no reported case in which such a covenant has ever been modified under paragraph (aa) with an award of compensation but, exceptionally, it is considered that such a case could occur where, for example, a house had already been built in breach of a covenant not to build since public interest considerations would then lie on both sides: see Re SJC Construction Co Ltd’s Application (1974) 28 P&CR 200 (where, however, the covenant was one privately entered into). 165 See further, Re Jones’ and White & Co’s Application (1989) 58 P&CR 512, at 517 (VG Wellings QC and Mr T Hoyes FRICS), where the Tribunal was not satisfied that a s 52 restriction did not secure to the council practical benefits of substantial value or advantage in preventing the building of a detached house on part of the restricted land (for which the council had granted planning permission), but added: ‘Money could not possibly be an adequate compensation for the loss or disadvantage which the council would suffer if the proposed modification were permitted’. The loss or disadvantage in question had been identified as a right to refuse to agree to a variation of the s 52 agreement looking ‘at matters from its own point of view and from that of members of the public whom it represents’, ie subjective control as opposed to control according to the desiderata which affect planning applications. 166 [2016] UKUT 515 (LC).

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20.91  Section 84(1) of Law of Property Act 1925: para (aa) children’s hospice, which had an adverse impact on the setting of the hospice and meant that recreational areas in its grounds would no longer be as private and secluded as they would otherwise be. The covenant was modified on the basis that although there were benefits of substantial value or advantage, it was in the public interest to meet the pressing need for affordable housing by allowing the houses that had been built to remain on the land. An award of £150,000 compensation was made on the basis that this (which had been offered) was reasonable for mitigation measures in the form of screening (costing £37,000 to £70,000) ‘plus a generous allowance for hassle and intangible consequences’.

Exceptions to the general position set out in para 2.80 above I: Where the covenant is modified on the public interest ground in s 84(1A)(b) and the loss or disadvantage suffered includes loss of amenity the Tribunal can (in theory) decide to assess compensation by reference to a share in the development value of the land subject to the covenant which is modified or discharged to allow the development 20.91 This appears to be somewhat anomalous. The proposition comes from the case of Re SJC Construction Co Ltd’s Application, a Tribunal decision of Douglas Frank QC,167 upheld by the Court of Appeal.168 For the facts and the basis of the decision in the case, see Chapter 23 on Compensation (para 23.17 et seq), where the position in relation to this, as it has subsequently developed, will be considered further. 20.92 In brief summary, however, the courts, whilst not overuling SJC have drawn back strongly from the decision in that case. In Stockport Metropolitan Borough Council v Alwiyah Developments,169 Dillon LJ,170 with whom Griffiths LJ agreed, made clear the decision in SJC should be treated cautiously,171 and emphasised that in it ‘the party entitled to the benefit of the restriction suffered the loss of a practical benefit of substantial value by the modification (on the grounds of public interest) in a case where there had been a ‘very serious loss of amenity’ and ‘what the Court of Appeal was approving was the President’s valuation of the loss of amenity and not the loss of a right to bargain or blackmail position’. In the Stockport case itself, compensation for the loss of a view was instead assessed by reference to the diminution in value of the houses on the Council’s benefited land. In Winter v Traditional & Contemporary Contracts Ltd,172 the Court of Appeal subsequently emphasised that the benefit to the applicant for discharge or

167 168 169 170 171 172

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(1974) 28 P&CR 200. (1975) 29 P&CR 322. (1986) 52 P&CR 278. Ibid, at p 284. See Chapter 23, paras 23.30 et seq. [2007] EWCA Civ 1088.

Would money be adequate compensation? 20.93 modification is a side issue and that and there will not generally be any basis for an award representing a share in the development value of the land on the basis of loss of amenity.173 See further in relation to this, para 23.30 et seq below.

II: The position where the compensation falls to be assessed under paragraph (ii) of section 84(1) 20.93 Where an objector elects for compensation to be assessed under paragraph (ii) of section 84(1), the measure (regardless of the size of any actual loss) is determined solely by reference to the sum required ‘to make up for any effect which the restriction had, at the time when it was imposed, in reducing the consideration then received for the land affected by it’. This may clearly be different from whether and to what extent the covenant now secures practical benefits of substantial value or advantage. Accordingly, substantial compensation may be awarded even though the effect of release or modification would now be small. In Re New Ideal Homes Ltd’s Application,174 a building site comprising 9.66 acres of land in Banstead had been sold in 1973 by a local council to the applicants for £801,000 who covenanted, for the benefit of three areas of land including a 13-acre site now belonging to the Reigate and Banstead Borough Council, not to erect more than 75 houses on the site. The applicants had (on appeal to the Secretary of State) obtained planning permission for the erection of 156 houses on the site and now sought modification of the covenant to permit that number of houses to be erected. The council claimed that if the application were granted, it would be deprived of the option of selling its 13-acre site (which was undeveloped) for low-density private housing. On the facts, the Tribunal found that the exercise of this option was unlikely, that the restriction in impeding the proposed user did not secure to the council any practical benefits of substantial value or advantage and that money would be an adequate compensation for the loss or disadvantage which the council would suffer from the modification. The council claimed compensation under paragraph (ii) of section 84(1) and, the amount having been agreed at £51,000, the Tribunal awarded that sum by way of compensation. Again, in Re O’Reilly’s Application,175 land was sold in 1987 by Rochester upon Medway City Council to the applicant for £31,500 who covenanted not to use it otherwise than for the parking and garaging of cars. In 1988, the council granted planning permission for the erection of six dwellings on part of the site and the applicant now applied for modification of the restriction under paragraph (aa) to permit that development. The Tribunal held that if (contrary to its view) the restriction conferred any practical benefit on the council, that benefit was not of substantial value or advantage. In fact, it appears that in also holding that the modification would not injure the council, the Tribunal considered that the benefit was not of any value or advantage. Nevertheless, since the council

173 And it was made clear in SJC itself it could not be awarded on any other basis: see p 236. See also pp 284–5 of the Stockport case. 174 (1978) 36 P&CR 476. 175 (1993) 66 P&CR 485.

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20.94  Section 84(1) of Law of Property Act 1925: para (aa) claimed compensation under paragraph (ii) of section 84(1), and established that, assuming six houses had been permitted to be constructed on the original sale (but taking into account the further restriction proposed by the Tribunal as to the retention of 27 garages on the remainder of the land) the original purchase price would have been higher by the sum £11,500, that sum was awarded as compensation.176

(2) The question of whether money per se would not be an adequate substitute for the loss or disadvantage which would be suffered from the discharge or modification 20.94 In Re Martins’ Application,177 the restriction was in favour of a council and contained in an agreement in section 37 of the Town and Country Planning Act 1962. In the Court of Appeal, Fox LJ said (at p 126, though obiter): ‘The member said that money would not be an adequate compensation to the corporation for the discharge of the covenant. I think that must be right. If the covenant is of value to the corporation for the protection of the public interest in the preservation of the amenities, it is difficult to see how a money payment could be adequate compensation. Money compensation seems wholly inappropriate.’ 20.95 The comments of Fox LJ in Re Martins’ Application on this point was considered in the decision of the Lands Tribunal in,178 which concerned a restriction imposed in a right to buy conveyance under the Housing Act 1980 of a house on an estate owned by the council. At p 114 the Tribunal said: ‘In my view, a distinction is drawn in section 84 between a discharge or modification which causes loss or disadvantage, where compensation may be ordered, and one which causes no loss or disadvantage, where compensation will not be ordered. Where an objector holds the benefit of the restriction as custodian of the public interest and will suffer some insubstantial loss or disadvantage from the discharge or modification, then the application will fail because money per se cannot be an adequate compensation. But where the objector is custodian and will not suffer any loss or disadvantage

176 Since the method of calculating compensation under paragraph (ii) is unrelated to the value of any loss or disadvantage suffered from the discharge or modification, if compensation is claimed and established under that paragraph, the compensation awarded may be substantially in excess of the value of any such loss or disadvantage (as presumably in the cases cited above) and may also be awarded where there is no loss or disadvantage whatever of that kind as in Re Bowden’s Application (1983) 47 P&CR 455 and Re Harper’s Application (1986) 52 P&CR 104. It should be noted, however, that the Tribunal has no power to uplift the amount by which the consideration received was less by reason of the covenant, either to take account of the effects of intervening inflation (see Re Bowden’s Application (1983) 47 P&CR 455, at 457) or by way of interest (see Thameside Estates Ltd v Greater London Council (1977) 249 Estates Gazette 346, at 451 and Weeks and Weeks v Thames Water Authority (1979) 39 P&CR 208, at 211. 177 (1989) 57 P&CR 119. 178 Re Willis (1997) 76 P&CR 97.

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Would money be adequate compensation? 20.96 from the discharge or modification, then the question of compensation does not arise at all and the absence of compensation will not be fatal to the application.’ 20.96 George Bartlett QC, President, reviewed these cases (together with the Tribunal’s decision in Re Vertical Properties Ltd179) in Re Zenios,180 and said: ‘It appears from the decisions referred to that, with the exception of Vertical Properties, in which Re Martin was not relied on, applications to discharge or modify restriction on ground (aa) have only succeeded against an objecting public body where the conclusion has been that that the body would suffer no disadvantage through the discharge or modification. It may be necessary for an applicant to rely on ground (aa) in such circumstances (rather than simply on ground (c)) where there are private objectors who would suffer a compensatable disadvantage. It is a shortcoming of section 84 that a restriction can only be discharged or modified if at least one of the grounds is made out in relation to all those entitled to the benefit. It is not sufficient that one ground is made out in relation to one objector and another ground is made out in relation to another.’ The benefit of the covenant was there held by the Hampstead Garden Suburb Trust Ltd and the President considered the Trust’s interest to be that of custodian of the public interest. It was given management powers in relation to the estate, at the time it was set up, because the Minister was satisfied that was necessary ‘for the purpose of ensuring the maintenance and preservation’ of the Suburb. The President said: ‘The fact the Trust is not a creature of statute is nothing to the point. It is because of the nature of its interest, in maintaining and preserving the Suburb, that money would not provide compensation for any disadvantage caused by the modification. If, therefore, the modification sought would have some adverse effect on the amenities that the Trust has the function of protecting ground (aa) will not have been made out.’ On appeal, it was argued the Trust could not be considered the custodian of the public interest and that the decision of the planning authority as to what should be permitted should be followed. The Court of Appeal said that ‘the Trust’s powers of control over applications to set aside restrictions such as here in play exist for the preservation of maintenance of the amenities of the suburb’, and it held that: ‘… the Trust’s duty was to consider and act for the promotion of the public interest, not in some sense the general public interest, obviously and not the national public interest; not even perhaps the London wide public interest, but certainly the public interest in the amenities of this area.’181 The Trust had its own decision to make in relation to that, and the grant of planning permission, whilst it fell to be considered, was in no way decisive. It upheld the Tribunal’s decision to dismiss the applications made under grounds (aa) and (c).

179 [2010] UKUT 51 (LC). 180 [2011] UKUT 260 (LC). 181 At para 34.

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20.97  Section 84(1) of Law of Property Act 1925: para (aa) 20.97 Accordingly, despite some doubt having been cast on the decision in Re Martins’ Application by Carnwath J in passing in Re Cardiff City Council, ex p Sears Group Properties Ltd,182 the position in relation to this seems clear. It might, however, be possible to argue that compensation would be adequate to satisfy the protected public interest on the basis that a suitable sum would be one that would enable at least equal benefits of the same kind to be delivered elsewhere: see Re Thames Valley Holdings Ltd’s Application.183

182 [1998] 3 PLR 55, at p 65. 183 [2012] JPL 66. A decision by George Bartlett QC, President, but on no more than a strike-out application. The substantive case does not appear to have subsequently proceeded to a hearing.

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21 Section 84(1) of the Law of Property Act 1925: paragraph (b)

‘(b) that the persons of full age and capacity for the time being or from time to time entitled to the benefit of the restriction, whether in respect of estates in fee simple or any lesser estates or interests in the property to which the benefit of the restriction is annexed, have agreed, either expressly or by implication, by their acts or omissions, to the same being discharged or modified;’

1 ‘PERSONS OF FULL AGE AND CAPACITY … ENTITLED TO THE BENEFIT OF THE RESTRICTION’ 21.1 Having regard to the provisions of sections 1(6) and 19 of the Law of Property Act 1925 and sections 1(1)(ii)(d), 26 and 27 of the Settled Land Act 1925, the entitlement of a minor to a beneficial interest in land1 to which is attached the benefit of a restrictive covenant will, in all cases, operate behind a trust consisting either of a settlement or a trust for sale. 21.2 By virtue of sections 58(1) and (2) and 59(2) of the Settled Land Act 1925, as extended by section 102 of that Act and section 28(1) of the Law of Property Act 1925, it should therefore always be possible, where a minor is beneficially entitled to the benefit of a restriction, to identify a person of full age as being so entitled for the purposes of paragraph (b). 21.3 Other persons suffering from a legal disability who are entitled to the benefit of a restriction are only capable of being bound by the express or implied agreement of a person duly appointed under a lasting power of attorney (or, where made before 1 October 2007, an enduring power of attorney) or the Court of Protection or duly appointed deputy, acting on their behalf.2 The question as to who (if anyone) is entitled to the benefit of a restriction will fall to be determined according to the normal rules considered in Chapters 2 to 8.

1 2

Whether the ‘land’ consists of a legal estate or an equitable interest in land: see the definition of ‘land’ in s 1(1)(ix) of the Settled Land Act 1925, noting the words ‘and any estate or interest in land’. Under the provisions of the Mental Capacity Act 2005.

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21.4  Section 84(1) of the Law of Property Act 1925: para (b)

2 ‘WHETHER IN RESPECT OF ESTATES IN FEE SIMPLE OR ANY LESSER ESTATES OR INTERESTS’ 21.4 As detailed in Chapters 1 and 6, the persons entitled to the benefit of a restriction may include not only the original covenantee but also owners of derivative proprietary interests in the benefited land which subsisted at the date of the covenant and subsequent owners of a legal or equitable proprietary interest in the benefited land. The above words of paragraph (b) appear to be confined to persons ‘for the time being or from time to time’ entitled to a proprietary interest in the benefited land, there being omitted from their scope the case of an original covenantee who has disposed of his proprietary interest in the benefited land but who remains entitled to the benefit of the restriction (as against the original covenantor) in contract. 21.5 Accordingly, it would seem that the Tribunal would have no jurisdiction to discharge or modify a restriction on the application of the original covenantor, in reliance solely upon paragraph (b), where one of the persons entitled to the benefit of the restriction was an original covenantee who had divested himself of his proprietary interest in the benefited land.3 Conversely, any objection from such an original covenantee would not prevent a case being established under this paragraph.

3 ‘THE PROPERTY TO WHICH THE BENEFIT OF THE RESTRICTION IS ANNEXED’ 21.6 It seems unlikely that the legislature intended the word ‘annexed’ to be construed in its strict sense.4 If it were so construed, the effect would be to exclude from the scope of paragraph (b) the express or implied release of the benefit of a restriction which had not been formally annexed to the benefited land.5 Such an exclusion would clearly be arbitrary since it could not logically be argued that there was any good reason for distinguishing between the benefit of a covenant which had been expressly assigned with the benefited land and the benefit of a covenant which had passed with the benefited land by virtue of annexation. 21.7 It is therefore considered that the above words ought to be construed as meaning ‘the property for the benefit of which the restriction was entered into and which is legally capable of benefiting therefrom’.6

3

4 5 6

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Of course, such a covenantee may well not suffer the loss of any practical benefits of substantial value or advantage as a result of the proposed modification or discharge, or be injured thereby, so that as against him the application could succeed under either paragraph (aa) or (c); but this will not necessarily be the case and in the absence of evidence turning on this issue, the Tribunal would prima facie be without jurisdiction by reason of such covenantee’s position not having been shown to fall under either of those lettered paragraphs. As to which, see Chapter 6. As to when a restriction is formally annexed to the benefited land, see Chapter 6. Or, in the case of covenants with public bodies where the statutory provision deems the public body to be possessed of land benefited by the covenant, the property so deemed to be benefited: see eg covenants entered into under the former s 52 of the Town and Country Planning Act 1971.

Agreed, expressly or by implication, acts or omissions etc 21.10

4 ‘HAVE AGREED, EITHER EXPRESSLY OR BY IMPLICATION, BY THEIR ACTS OR OMISSIONS, TO THE SAME BEING DISCHARGED OR MODIFIED’ 21.8 It is in these words that the true significance of paragraph (b) lies. As has been seen in Chapter 15, a person entitled to the benefit of a restriction may release or vary it by agreement under the general law and no order of the Upper Tribunal is necessary to render such agreement effective. However, in order to be effective under the general law, the agreement must (as a minimum) be in writing and be signed by the releasor or his agent.7 In contrast, by virtue of the above words, it is open to the Tribunal either to find an express agreement8 or as an alternative to finding an express agreement, where the circumstances justify it,9 to find an agreement for discharge or modification by implication from the acts or omissions of the persons entitled to the benefit. 21.9 As Sir Keith Lindblom, President, said in Re Clearwater Properties Ltd’s Application,10 the concept of agreement in section 84(1)(b) is a broad one: ‘45 … It is not confined to a formal written agreement embodied in a contract or a deed. Agreement by word of mouth is possible. Indeed, words need not be used at all. Agreement may come about either in bilateral conduct or in unilateral action, or by default. In some cases it may be no more than acquiescence. The subsection embraces agreement either express or “by implication”. Agreement by implication can take the form of either “acts or omissions”. This would include a failure to act in such a way as to assert the benefit of a restriction effectively or unequivocally. Agreement may be found in evidence of a restriction being disregarded or left unenforced (see, for example, Re Child Brothers Ltd’s Application). 46. Consent to a discharge or modification need not extend to the parties agreeing as to the amount of compensation or simply that it will be paid. The statutory scheme leaves the question of compensation ultimately in the hands of the Tribunal. The corollary, however, is that if the parties only agree what a mutually acceptable level of compensation would be were the restriction to be lifted or changed, this will not equate to consent to the discharge or modification itself.’ 21.10

As Sir Keith went on to say:11

‘The essential thing in section 84(1)(b) is that those entitled to the benefit of the covenant have clearly demonstrated their consent to the restriction being 7 8

See further, para 15.13 above. It would also seem to be open to the Tribunal to interpret the words ‘express agreement’ as including any express agreement whether made by duly signed writing or orally or partly in writing and partly orally. For an instance of such a case, see Re Cornick’s Application (1994) 68 P&CR 372 (HH Judge Marder QC, President). 9 See Re Robinson’s and O’Connor’s Application (1964) 16 P&CR 106 (where no final express agreement was found to have been made). It was unsuccessfully argued in this case that the question whether there was an agreement was a preliminary point for the court and not the Tribunal. In Re Dowsett Land Investments Ltd’s Application (1960) 11 P&CR 394, a case of an express agreement during the course of the proceedings seems to have been made out but the order was made under paragraph (c). The same observation applies to Re Hounslow and Ealing London Borough Council’s Application (1995) 71 P&CR 100 where the order was made under paragraph (aa). 10 [2013] UKUT 210 (LC). 11 Ibid, at paras 47–48.

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21.11  Section 84(1) of the Law of Property Act 1925: para (b) removed or varied … To find whether this has been done the Tribunal must examine all the relevant facts.’ In that case, it was held there had been nothing more than without prejudice discussions in which the council with the benefit of the covenant never committed itself to the discharge or modification of it regardless of the amount of money it would receive for doing so or on the understanding that in the absence of agreement as to that the amount of compensation would have to be decided by the Tribunal under section 84. 21.11 Where an agreement is made and the agreement is for the purposes of paragraph (b) only, this would prima facie take effect subject to any claim for compensation under section 84(1) which those agreeing might decide to make. However, if such persons intend to make such a claim then it would clearly be safest for them expressly to reserve their right to claim such compensation and for their agreement to operate for the purposes only of the owner of the burdened land making an application to the Tribunal for an order.12

‘[H]ave agreed … by implication’ 21.12 An implied agreement has been held by the Tribunal to arise from the following acts and omissions: (1) by acquiescence over a substantial period of time in the restricted land being used for a non-conforming use for which modification of the restriction is sought;13 (2) by acquiescence over a substantial period in the restricted land being used for a non-conforming use of a kind which implies further non-conforming uses of a similar kind where modification of the restriction is sought for such a further non-conforming use;14

12 Cf Re Harper’s Application (1986) 52 P& CR104, where the covenantee objected to an application made under paragraph (aa) solely in order to claim compensation. 13 Re W Findlay & Co Ltd’s Application (1963) 15 P&CR 94 (use of buildings as shops over a period of 34 years in breach of a covenant forbidding use except for the purpose of private residences); Re Lloyds Bank Ltd’s Application (1976) 35 P&CR 128 (bungalow built 25 years prior to the application seeking modification to allow its retention in so far as it was partly built on land which was subject to a restriction not to erect any permanent building). 14 Re Child Bros Ltd’s Application (1958) 10 P&CR 71 (restriction under a building scheme imposing a limit (in total) of 20 houses on the application land treated as waived by ‘general disregard’ of similar restrictions on other building scheme land so as to amount to an agreement to permit 100 houses on the application land); Re Hackney Borough Council’s Application (1951) 7 P&CR 37. In this case a privately-owned square (Clapton Square in Hackney) was subject to a restriction imposed in 1869 that it should at all times be kept as an open space or garden for the private use and enjoyment of the owners of properties adjoining the square. In 1922, the London County Council, acting under powers conferred by the Town Gardens Protection Act 1863, vested the freehold of the square in itself ‘to take charge of and maintain the same as an open space in such manner as shall appear to them most advantageous to the public’. On the council’s application for the modification of the restriction to permit the erection in the square of an open-air theatre, the Tribunal (Sir William Fitzgerald KC and JPC Done FRICS) held that by not objecting to the council taking over the square, the owners of the surrounding property had impliedly consented to allowing its use for any purpose within the limits of user to which the square could statutorily be put, including its use ‘for the purpose of an open-air theatre or any other purpose properly deemed by the managing authority as advantageous to the public’. Whilst not detracting from the point under discussion, it may be questioned whether the Tribunal had any jurisdiction to consider the council’s application bearing in mind that the

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Agreed, expressly or by implication, acts or omissions etc 21.13 (3) by an objector expressing his consent (perhaps subject to his right to ask for compensation) in his notice of objection;15 (4) by an objector, in the course of the hearing, indicating his willingness to give his consent, provided such consent is formally given before the Tribunal makes its final decision;16 (5) by an objector’s omission to appear before the Tribunal at the hearing of the application;17 (6) by an objector withdrawing his objection before or at the hearing;18 (7) by a person potentially entitled to the benefit of a restriction failing to come forward to be joined as an objector following the publicity given to an application.19 21.13 In Re University of Westminster’s Application,20 the Court of Appeal held that where an applicant seeks to rely on ground (b) on the basis of the failure of such persons to respond to the notice of application, the Tribunal will have jurisdiction only if it is satisfied that on the balance of probabilities: (1) every entitled person has received notice; (2) any person not in agreement would have thought it necessary to respond; and (3) where there is notice of a composite application for modification or discharge, and discharge is sought following failure to respond, that the notice has drawn a clear distinction between the consequences of modification and discharge so that the failure of the persons with the benefit of the covenant to respond can be shown to be on the basis they did not wish to object to discharge not just modification. In that case, the notice delivered to potential objectors, and the form of application seeking discharge or alternatively modification, made plain that the applicant intended to continue to use the premises in question for educational purposes, albeit for wider educational purposes than those permitted by the covenant. No-one came forward to object, but the Tribunal emphasised the need for care in drawing conclusions as to what potential objectors have actually consented

effect of the council’s compulsory acquisition of the square was, by virtue of other legislation, to entitle the council to disregard the restriction for the purpose of exercising its statutory powers subject only to paying compensation to the persons entitled to the benefit of the restriction for any injurious affection suffered by them. See, further, Chapter 10. 15 As in Re Harper’s Application (1986) 52 P&CR 104, where, however, no reliance appears to have been placed on paragraph (b). 16 Cf Re Whiting’s Application (1988) 58 P&CR 321, 327–328. 17 Re Goodban’s Application (1970) 23 P&CR 110. In the circumstances which occurred in such Tribunal cases as Re Lee’s Application (1962) 14 P&CR 85, Re Southend Corpn’s Application (1965) 17 P&CR 55 and Re Osborne’s Application (1972) 25 P&CR 212 (where the application was granted under paragraph (c)), the application could (subject to discretion) have succeeded under paragraph (b) had it been pleaded. See also Re Hounslow and Ealing London Borough Council’s Application (1995) 71 P&CR 100. 18 Re Dare’s and Beck’s Application (1974) 28 P&CR 354; Re Fettishaw’s Application (1973) 27 P&CR 139. See also, Re John and David Martin Ltd’s Application (1959) 12 P&CR 260, where all 10 of the objectors notified the withdrawal of their objections before the date of the hearing; Re Quickfit and Quartz Ltd’s Application (1964) 16 P&CR 99; Re Laverock’s Application (1966) 18 P&CR 161 (where the only three objectors out of a total of 22 who did not signify their agreement, failed to be present or to be represented at the hearing and the application was granted under paragraph (c)). 19 Re Fettishaw’s Application (No 2) (1973) 27 P&CR 292, per VG Wellings QC at 293. Contrast the effect of a defendant’s failure to respond to an application to the High Court under s 84(2): Griffiths v Band (1974) 29 P&CR 243. 20 (1999) 78 P&CR 82.

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21.14  Section 84(1) of the Law of Property Act 1925: para (b) to, as did the Court of Appeal, which upheld the Tribunal’s decision that it had not been shown that potential objectors were consenting to discharge rather than modification. 21.14 It should be noted that the fact that a person entitled to the benefit of a restrictive covenant has not opposed an application for planning permission for a development that requires the restriction to be discharged or modified is unlikely, without more, to amount to consent. The planning regime is separate to that relating to restrictive covenants. 21.15 A council that has itself granted planning permission for the development may be an objector as a benefited landowner to an application made under section 84, and the grant of permission when acting as local planning authority will not prevent it from pursuing an objection in its capacity of landowner on the basis it has consented to the development. In Re Graham’s Application,21 a council had the benefit of a covenant prohibiting a site from being used other than as a coach depot. The council, as local planning authority, had granted planning permission for residential development on the site. The owner of the land applied for the discharge of the covenant on several grounds, including subsection (1)(b). He contended the council had agreed to the discharge of the covenant by encouraging him to bring forward his development and by granting planning permission for it, and had once been prepared to release the restriction. The Tribunal held that:22 ‘The objector, as a local authority, fulfils multiple functions and the exercise of such a function by one department of that authority does not imply acceptance of that decision in relation to another such function … the grant of planning permission does not imply agreement to the discharge or modification of the restriction.’ The case went to the Court of Appeal, sub nom Graham v Easington District Council.23 This was on a different point, but the court in paragraph 8 of its judgment (given by Carnwath LJ) did refer in passing with implied approval to the case of Re Jones & White & Co’s Application24 in the Lands Tribunal where it was likewise held that in relation to the enforcement of a covenant in an agreement entered into with it under section 52 of the Town and Country Planning Act 1971 (as to which, see para 10.8 above) the council was not bound by its own grant of planning permission as local planning authority for the development prevented by the covenant.

5 CAN RELIANCE BE PLACED PARTLY ON PARAGRAPH (b) AND PARTLY ON PARAGRAPH (aa) OR (c)? 21.16 In all the cases in which the Tribunal has been satisfied that a case has been made out under paragraph (b), the case has been made out in its entirety under that paragraph, the application succeeding either under that

21 LP/83/2005. Quoted by Sir Keith Lindblom, President, in Re Clearwater Properties Ltd’s Application [2013] UKUT 210 (LC). 22 Ibid, at para 114. 23 [2008] EWCA Civ 1503. 24 [1989] 58 P&CR 512.

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When should paragraph (b) be relied upon? 21.20 paragraph alone25 or under that paragraph and (as additional and self-contained grounds) under one or more of the other paragraphs.26 21.17 Suppose, however, that the Tribunal is able to find that some, but not all, of the actual or potential objectors fall within paragraph (b). The question arises as to whether those persons can be left out of account in considering whether a case is made out under paragraph (aa) or (c). As referred to in Chapter 18 above,27 the appearance of the word ‘or’ following each of the lettered paragraphs (except the last) strongly suggests that each paragraph is self-contained and that any particular paragraph can only be successfully relied upon if the whole of the applicant’s case can be brought within its terms. HH Judge Rich QC sitting in the Lands Tribunal so held in Re Kennet Properties’ Application.28 In Re Zenios,29 George Bartlett QC, President, confirmed,30 ‘It is not sufficient that one ground is made out in relation to one objector and another ground is made out in relation to another’.31 21.18 In relation to paragraph (b), however, where there is an express agreement to the proposed discharge or modification which is valid and enforceable under the general law no reliance would need be placed on paragraph (b) since the releasor would simply no longer (in the context of the proposed discharge or modification) be a person ‘entitled to the benefit of the restriction’ for the purposes of paragraph (aa) or (c) so that the Tribunal would not be concerned with him under those paragraphs. Where, however, this is not so and there is merely an express or implied agreement which is not an effective legal release under the general law, the informal releasor would still remain a person ‘entitled to the benefit of the restriction’ and, the informal releasor could not, under paragraphs (aa) or (c), be left out of account merely on the ground that he fell under paragraph (b). On this basis, unless the applicant can show that all the actual or potential objectors have agreed to an express or implied release under paragraph (b), he cannot rely on that paragraph for any purpose. 21.19 The Law Commission have recommended the rule be changed: see ‘Making Land Work: Easements, Covenants and Profits à Prendre’.32

WHEN SHOULD PARAGRAPH (b) BE RELIED UPON? 21.20 In the circumstances, paragraph (b) would only be appropriate for inclusion as a ground of the application if: (1) the applicant considers he can establish the existence of the necessary express or implied agreements; or 25 As in Re Goodban’s Application, above, Re Fettishaw’s Application (No 2), above, and Re Dare and Beck’s Application, above. 26 As in each of the other cases previously referred to. 27 See para 18.4 above. 28 (1996) 72 P&CR 353, at p 356. 29 [2010] UKUT 260 (LC). 30 Ibid, at para 21. 31 Nothing said by the Court of Appeal at [2011] EWCA Civ 1645 on an appeal relating to different points casts any doubt on this statement. 32 Law Com No 327 (2011). See para 33.11(38) below.

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21.21  Section 84(1) of the Law of Property Act 1925: para (b) (2) he wishes to provide for the contingencies of (i) there being no objectors, or (ii) there being objectors who subsequently withdraw, or do not appear at the hearing, or expressly consent to the proposed discharge or modification. 21.21 The advantage of the application being framed so as to include paragraph (b) conditionally as in (2) above is that on the application being advertised and served on potential objectors, the potential and actual objectors will have been made aware in advance of the risks under paragraph (b) attendant upon their failure to object or failure to appear at the hearing. This should serve to reinforce the case for treating such a failure as an implied agreement to the discharge or modification for the purposes of paragraph (b).33 If paragraph (b) is relied upon unconditionally and is not substantiated at the hearing, this may obviously have an adverse effect on the order as to costs. 21.22 However, if the application does not initially refer to paragraph (b), then if at a later stage all opposition comes to an end by reason of the objectors withdrawing, failing to appear or consenting, then: ‘It can now be taken as a settled practice, [that] in such circumstances and upon application being made, the Upper Tribunal will permit the application to be amended so as to add paragraph (b) of subsection (1) of section 84 of the Law of Property Act 1925 as a ground for the application. This will be done without the carrying out of any further procedural steps.’34

PARAGRAPH (b) AND THE TRIBUNAL’S DISCRETION 21.23 Where a case is established under paragraph (b), the Tribunal still has a discretion whether to make an order and, for the purpose of the exercise of its discretion, to require the applicant to adduce evidence or to satisfy itself by any other means (such as by inspection of the application site) that an order should be made.35 This again demonstrates the difference between an agreement for the release or modification of a restriction which is operative under the general law (which leaves no room for any discretion) and an agreement which is effective only by virtue of paragraph (b).

33 In Griffiths v Band (1974) 29 P&CR 243, at 245, Goulding J said of this case: ‘It is not necessary, or desirable, for me to express any view on that’. Any reinforcement of the case would clearly lead to less likelihood of its being undermined if tested in a higher court. 34 Per Douglas Frank QC in Re Dare’s and Beck’s Application (1974) 28 P&CR 354, where such an amendment was allowed. A like amendment had similarly been allowed by VG Wellings QC in Re Fettishaw’s Application (No 2) (1973) 27 P&CR 292. 35 Re Goodban’s Application (1970) 23 P&CR 110, at 111–112; Re Fettishaw’s Application (No 2) (1973) 27 P&CR 292, at 294.

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22 Section 84(1) of the Law of Property Act 1925: paragraph (c)

‘(c) that the proposed discharge or modification will not injure the persons entitled to the benefit of the restriction.’

OVERLAP BETWEEN PARAGRAPH (c) AND OTHER PARAGRAPHS 22.1 Whilst each of the paragraphs of section 84(1) of the Law of Property Act 1925 is self-contained in the sense that a successful case cannot be established  partly under one and partly under another,1 there is nevertheless considerable overlap between them in the sense that a set of facts sufficient to establish a case under one paragraph will frequently also establish, or go a long way towards establishing, a case under one or more of the other paragraphs. Thus, where a restriction is deemed to be obsolete under paragraph (a), its discharge will usually cause no injury to the persons entitled to the benefit of the restriction under (c).2 22.2 An applicant who succeeds under paragraph (aa) may also, but by no means necessarily will, succeed under paragraph (c). In Ridley v Taylor,3 Russell LJ spoke of paragraph (c) as being ‘a long stop against vexatious objections to extended user’ which could be invoked by an applicant against a person who had the technical right to enforce a covenant by injunction pursuant to a sense of duty or moral obligation to others but who was not himself personally interested in or affected by enforcement. In such circumstances, Russell LJ expressed the view that such a person4 could not himself claim to be injured.5 1 2 3 4

5

See above, para 18.4 and para 21.14 et seq. But not necessarily. See, eg Re Luton Trade Unionists Club and Institute Ltd’s Application (1969) 20 P CR 1131, considered above at para 19.26 et seq. [1965] 1 WLR 611, at 622. This observation of Russell LJ was referred to by Nourse LJ in Abbey Homesteads (Developments) Ltd v Northamptonshire County Council (1986) 53 P&CR 1, at 12. Described by Russell LJ, ibid, as raising a ‘proprietorially speaking, frivolous objection’. Objections falling within this description have been found to exist (and as such were dismissed out of hand) in a number of Lands Tribunal cases including Re Star Cinemas (London) Ltd’s Application (1969) 21 P&CR 825, at 831); Re Brown’s Application (1977) 35 P&CR 254 (objection based on misapprehension as to extent of discharge or modification sought, which was minimal, namely, modification to permit rebuilding of defective front elevation of a 100-year-old house and to add a porch). Russell LJ’s observations were obiter. Harman LJ did not advert to this issue and Diplock LJ concurred in both judgments.

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22.3  Section 84(1) of the Law of Property Act 1925: para (c)

MAIN DIFFERENCES BETWEEN PARAGRAPH (c) AND PARAGRAPH (aa) 22.3 In one respect, the requirements of paragraph (c) are more stringent than those of paragraph (aa). Under paragraph (aa), as supplemented by section 84(1A), the applicant can establish a case even though loss or disadvantage will be sustained by the persons entitled to the benefit of the restriction.6 Under paragraph (c) the applicant must show that no injury will be sustained by those persons. It follows that an applicant who fails to satisfy the Tribunal under paragraph (aa) as to the requirements of section 84(1A) will almost certainly7 be unable to satisfy the Tribunal under paragraph (c).8 22.4 However, in each of the following respects, the requirements of paragraph (c) are less stringent than those of paragraph (aa): (1) Under paragraph (aa) it must be shown that the proposed development would constitute ‘some reasonable user of the land for public or private purposes’;9 there is no such requirement under paragraph (c). As has been seen,10 the existence of planning permission for the proposed development goes a long way11 towards showing its reasonableness and conversely where no planning permission has been granted and is unlikely to be granted.12 But the absence of planning permission would be irrelevant to

6 Provided either that loss or disadvantage which will be sustained consists of non-practical benefits or practical benefits which are of no substantial value or advantage, or that in impeding the proposed development, the restriction is contrary to the public interest, and (in either case) that money will be an adequate compensation: see, further Chapter 20. 7 In one respect the position remains obscure. The ability to enforce a restriction for the purpose of giving effect to a supposed duty or moral obligation owed to others may be a ‘practical benefit of substantial value or advantage’ for the purposes of paragraph (aa) (see the Tribunal decisions cited above, at para 20.26 at pp 576–577 above), and yet its loss may not amount to an ‘injury’ for the purposes of paragraph (c) (see Ridley v Taylor [1965] 1 WLR 611, per Russell LJ at 622, referred to at para 22.2 above). 8 In Re Beardsley’s Application (1972) 25 P&CR 233, at 238 the Tribunal (JH Emlyn Jones FRICS) observed that it was ‘difficult to envisage any circumstances in which an application which failed to satisfy the conditions of s 84(1)(aa) and s 84(1A)(a) could succeed under s 84(1)(c)’. In Re Brierfield’s Application (1976) 35 P&CR 124, at 127, the Tribunal (Sir Douglas Frank QC), in finding that a case had not been made out under ground (aa), added: ‘… and it necessarily follows from that that the application also fails under ground (c)’. In so saying, Sir Douglas Frank was referring to a case not having been made out under paragraph (aa) because of failure to satisfy the supplementary requirement of that paragraph set out in s 84(1A)(a). 9 Above, para 20.6 et seq. 10 Above, para 20.8. 11 But not necessarily all the way: See Re Bass Ltd’s Application (1973) 26 P&CR 156, where the Tribunal (J Stuart Daniel QC) said at 159: ‘I would not like it to be thought that the first question arising, that of reasonable user, could always be concluded in the affirmative by the production of a planning permission, but on balance and after some doubt, and assuming that the covenants were not there, I have decided that in the present case the proposal does in all the difficulties of the situation constitute a reasonable user of the land for private purposes’. 12 See the decision of the Lands Tribunal for Scotland in Caledonian Associated Properties Ltd v East Kilbride Development Corpn (1984) 49 P&CR 410. At p 424 the Tribunal said on this issue: ‘… we are reluctant at present to make an order which would run counter to the corporation’s approved proposals and to accept as reasonable a use for which planning permission is unlikely to be granted’. Although the provisions of s 1 of the Conveyancing and Feudal Reform (Scotland) Act 1970 are different in a number of respects from those of s 84(1) (see p 421 of the above report) the words considered in the above case, namely ‘some reasonable use of the land’, are the same in both sets of provisions.

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The constituent elements of paragraph (c) 22.5 establishing a case under paragraph (c), although it might be relevant to the exercise of the Tribunal’s discretion.13 (2) Under paragraph (aa), the Tribunal will be concerned to see whether compensation (and if so of what amount) is required to be paid (pursuant to paragraph (i) of section 84(1)) to make up for any loss or disadvantage suffered in consequence of the discharge or modification; whereas under paragraph (c), since no injury is sustained, this has been treated by the Lands Tribunal as meaning that no ‘loss or disadvantage’ will be suffered in consequence of the discharge or modification.14

THE CONSTITUENT ELEMENTS OF PARAGRAPH (c) ‘The proposed discharge or modification’ 22.5 This expression appears only in paragraph (c). On the face of it, this appears to refer to the discharge or modification for which an order is sought in the application or at the hearing However, in the course of the hearing it may happen that an order for a less extensive form of discharge or modification ultimately commends itself to the Tribunal.15 In such a case the Tribunal has consistently acted on the practical basis that the above words require only that the discharge or modification provided for in the order which the Tribunal

13 Above at para 16.112. The main point under discussion would seem to have been overlooked by the Tribunal (JH Emlyn Jones FRICS) in Re Forgac’s Application (1976) 32 P&CR 464, at 469 where the Tribunal said: ‘… prima facie an application which succeeds under paragraph  (c) should succeed a fortiori under paragraph (aa)’. However, on the facts, the proposed change of user of a coach house from user by domestic staff to user by a separate owner occupier was clearly reasonable. 14 See, eg Re Pearson’s Application (1978) 36 P&CR 285, per VG Wellings QC at 293: ‘I need not consider whether paragraph (aa) is made out nor the question of compensation, because I decide this case in favour of the applicant under paragraph (c)’. These remarks were clearly directed to compensation under head (i) of s 84(1) (compensation for loss or disadvantage suffered in consequence of the discharge or modification). It may, however, be asked whether, if a person entitled to the benefit of a restriction does not suffer a ‘proprietorial’ injury, he necessarily does not suffer a ‘loss or disadvantage’. But whatever the position under head (i), compensation under head (ii) (to make up for any reduction in price occasioned by the imposition of the restriction when it was imposed) can clearly be awarded when the applicant has succeeded under paragraph (c): see Re Gateshead County Borough’s Application (1960) 12 P&CR 265; Re Bowden’s Application (1983) 47 P&CR 455, at 457; Re Richards’ Application, ibid, 467, at 471. 15 As, for example, in Re Lee’s Application (1962) 14 P&CR 85 where the Tribunal rejected a proposal for discharge but allowed an alternative proposal for modification. In Re Ogle and Ministry of Health’s Application (1957) 9 P&CR 526, a proposal for the modification of a ‘private residence only’ restriction affecting (in common with other houses on the estate) an eight-bedroomed house on the Wentworth Estate at Virginia Water in Surrey, to enable the house to be used as a residence by 14 senior members of the nursing staff and two of the domestic staff of a hospital, was granted subject to conditions, the Tribunal finding that such occupation would not injure the amenities of the estate as a whole or the amenities or value of any individual house provided that the safeguards provided for by the conditions were made. In Re Alwoodley Motors Ltd’s Application (1961) 13 P&CR 195, at 208, the Tribunal found that the proposed modification, as then amended by counsel for the applicant (whereby the proposed building would be used for the storage of cars only and not as a workshop) would not injure any of the objectors. As to whether a proposed amendment to the modification sought by the application requires (in addition to the leave of the Tribunal) the application to be re-advertised, see Re Fettishaw’s Application (No 2) (1973) 27 P&CR 292.

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22.6  Section 84(1) of the Law of Property Act 1925: para (c) ultimately proposes to make will not injure the persons entitled to the benefit of the restriction.16 This can be justified logically in that applicants may be said to propose modification as set out, or otherwise, by implication arising out of the fact that they do not say otherwise at any time, such other modification as the Tribunal is prepared to make.

‘Will not injure’ 22.6 It is to be noted that it is the proposed discharge (elimination) or modification (tempering) of the restriction – not the proposed development – which must be shown not to injure.17 However, since the carrying out of the proposed development is usually the object of seeking an order for the proposed discharge or modification, evidence as to the effects of the proposed development on the persons entitled to the benefit of the restriction will usually be indirectly definitive of the effects on those persons of the proposed discharge or modification. 22.7 However, in some cases it may be the direct effect of the discharge or modification on the ability of those persons to maintain the scheme of covenants of which the instant covenant forms part which is of prime importance. Thus, where a set of restrictions exists to control over a particular area, evidence as to the desirability of maintaining that control, and evidence as to the manner of its exercise, for the general benefit of the occupiers of properties in the area would be directly relevant to the Tribunal’s task in determining whether a departure from the set of restrictions would injure those entitled to enforce them. A proposed development, though relatively innocuous in itself, may amount to injury in opening the way to further developments which taken together will undermine the efficacy of the protection afforded by the scheme of covenants.18 22.8 In McMorris v Brown19 – which was a case on the Jamaican equivalent to section 84(1)(c), the Privy Council (at p 151) adopted the following statement by the President of the Lands Tribunal (HH Judge Marder QC) in Re Snaith and Dolding’s Application20 (a ground (aa) case, where the applicants had been seeking modification of a covenant to enable them to build a second house on a single plot within a building scheme): ‘Any application under section 84(1) must be determined upon the facts and merits of the particular case, and the Tribunal is unable to bind itself to a particular course of action in the future in a case which is not before it … It is however legitimate in considering a particular application to have regard to the scheme of covenants as a whole and to assess the importance to the beneficiaries of maintaining the integrity of the scheme. The Tribunal has frequently adopted this approach …

16 See the decisions in the previous footnote. 17 See Re Teagle’s and Sparkes’ Application (1962) 14 P&CR 68, at 72: ‘… the criterion is not whether “the proposed development” will be uninjurious, but whether “the proposed discharge or modification” will be uninjurious’. 18 This statement is taken from the judgment of Carnwath LJ for the Court of Appeal in Shephard v Turner [2006] 2 P&CR 28, at para 26 (though the argument failed on the facts there). 19 [1999] 1 AC 142. 20 [1995] 71 P&CR 104, at p 118.

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The constituent elements of paragraph (c) 22.10 Insofar as this application would have the effect if granted of opening a breach in a carefully maintained and outstandingly successful scheme of development, to grant the application would in my view deprive the objectors of a substantial practical benefit, namely the assurance of the integrity of the building scheme. Furthermore I see the force of the argument that erection of this house could materially alter the context in which possible future applications would be considered.’ 22.9 Any application under section 84(1) must be determined upon the facts and merits of the particular case, and the Tribunal is unable to bind itself to a particular course of action in the future in a case which is not before it. Accordingly, it cannot on granting an application for discharge or modification indicate that it will not allow other applications in the future which seek similar relief: see Re Ghey & Galton,21 and Re Farmiloe.22 As it was put by HH Judge Marder QC, President, in Re Snaith and Dolding’s Application (above): ‘It is however legitimate in considering a particular application to have regard to the scheme of covenants as a whole and to assess the importance to the beneficiaries of maintaining the integrity of the scheme. The Tribunal has frequently adopted this approach. See for example Re Henman (1972) 23 P&CR 102; Re Saviker (No 2 (1973) 26 P&CR 44l; and Re Sheehy (1992) 63 P&CR 95.’ 22.10 Similarly, in Re Zenios23 (where the application was on grounds (aa) and (c), and concerned a restriction in favour of Hampstead Garden Trust), it was contended that each proposal fell to be considered on its own merits, and that the proposal was acceptable in itself. George Bartlett QC, President, said: ‘I do not accept the applicants’ contentions in this respect. It is an important purpose of the controls exercised by the Trust to prevent creeping incrementalism. It is unrealistic to suppose that successive developments of this sort can be permitted, on the basis that each in itself does little harm, up to the point at which one further development would significantly affect the character of the area, with an embargo being imposed from then on. The reasons for this are obvious. Each such development creates pressure to reach a similar decision on the next application (in equity, because it would seem unfair to treat two comparable applications differently; and judgementally, because a similar development will previously have been judged to be acceptable). It is moreover wholly improbable that there could be some identifiable threshold up to which development could be seen to be acceptable and beyond which further development could be seen to be unacceptable. Instead there would be the risk that cumulative developments would gradually erode the character of the area to the point at which the erosion itself was seen to reduce the justification for refusing further applications.’ The Tribunal accepted the objectors’ evidence that the value of additional floorspace in the area was so very high there was in consequence an incentive to extend. The applications under grounds (aa) and (c) were dismissed.

21 22 23

[1957] 2 QB 650. (1983) 48 P&CR 3l7. [2010] UKUT 260 (LC).

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22.11  Section 84(1) of the Law of Property Act 1925: para (c) On appeal, the Court of Appeal, sub nom Zenios v Hampstead Garden Trust Ltd,24 pointed out it was not a question of legal precedent but that the Upper Tribunal was ‘entitled to consider the proposal’s likely precedent effect as a matter of fact’, and described the Tribunal’s conclusion on the point as free from legal error.25 22.11 However, in Re Deans’ Application26 an application succeeded under ground (c) on the basis that the application27 was for an ‘inoffensive development’ which would ‘not in reality … open the floodgates to further applications’ on the basis that ‘allowing an application which does not cause injury to objectors should not be used in future to support an application that does cause injury’. Re Forjac’s Application28 was relied on. It is suggested, however, that it needs to be borne in mind that a number of innocuous developments, each allowed on this basis, could ultimately end up causing injury by reason of the cumulative effect. This is despite the fact that each application viewed individually does not cause injury, save by weakening the scheme and meaning future applications will be unable to be resisted on the same basis. 22.12 See, further, the cases under the ‘Thin End of the Wedge Argument’ at para 16.102 et seq above. 22.13 Where jurisdiction for the granting of the application rests solely on ground (aa) or (c) in section 84(1), then this argument is germane to the question of jurisdiction in the context of whether the discharge or modification would ‘injure’ the persons entitled to the benefit of the restriction (under paragraph (c)) or would remove a ‘practical benefit’ under paragraph (aa) since, as pointed out in Re Teagle’s and Sparkes’ Application,29 if granting the application would make the restriction itself vulnerable to future applications, then that amounts to an ‘injury’ for the purposes of paragraph (c) and the same applies as to a ‘practical benefit’ under paragraph (aa).30 22.14 As has been mentioned above, there is an obvious overlap between grounds (c) and (aa). If a covenant does secure a benefit of practical value to the person with the benefit of a covenant (even if it does not then afford substantial value or advantage under (aa), thought the more obviously so if it does), it is plainly likely to follow that the loss of the benefit would amount to an ‘injury’ to him. 22.15 Many applications have been, and are, brought on the basis both of ground (aa), and of ground (c), but even where applications have proceeded 24 25

[2011] EWCA Civ 1645. See to similar effect in terms of the legal principle involved, Shephard v Turner [2006] 2 P&CR 28, though the argument was rejected on the facts there. 26 [2017] UKUT 203 (LC). 27 Which was substantial in that modification was sought to replace an indoor swimming pool building attached to the applicants’ house with a detached two-storey dwelling house, with garage and parking. 28 (1976) 36 P&CR 464. 29 (1962) 14 P&CR 68. This case was based solely on paragraph (c). 30 See, also, Re Murray’s Application (1962) 14 P&CR 63, at 66, where the member of the Tribunal (RCG Fennell FRICS) in dismissing an application to dispense with the need for approval of plans by the original covenantee, said: ‘… the degree to which they [the covenants] might be relaxed without injury must be dictated by evidence of the nature of the surrounding development and of the extent to which those covenants have been observed and remain effective’.

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The constituent elements of paragraph (c) 22.16 solely on the basis of ground (aa) decisions in relation to what may amount to a practical benefit are relevant also in relation to ground (c) in that the loss of such a benefit will amount to injury under ground (c) where an application is proceeding under that ground. Accordingly, see above at para 20.26 in relation to what may amount to such a benefit. 22.16 Relevant factors specifically identified in cases proceeding under ground (c) have included the following: (1) whether any alternative form of development not controlled by a restriction, and as to which there is a probability that such development would be carried out, would be more injurious than the proposed development;31 (2) the fact that, on a developed estate, there is ‘an unexplained gap’ in the layout which an additional house would ‘round off’;32 (3) the fact that, in an area subject to a building scheme, the application plot was an unexplained ‘odd man out’ in having alone been subjected to a restriction which simply prohibited any buildings or erections of any kind (other than summer houses or greenhouses) whereas all the other plots permitted a house to be built subject to other restrictions;33 (4) the fact that, if the proposed development were carried out, the whole scheme and layout of an estate would be broken into;34

31 See Re Davies’s Application (1971) 25 P&CR 115, at 125 (application to permit construction of 11 houses on a parcel of farmland on which a restriction prohibited any building – restriction did not preclude use of land as a caravan site – the Tribunal found likelihood of such use improbable and therefore disregarded it); Re R H M Wesson’s Application (1963) 15 P&CR 109 (covenant against user except for single dwelling house, lodging house, private school or seminary – application to permit block of 20 fiats and 20 garages – argued that objector would suffer worse injury if school or seminary built – the Tribunal found chances of such development in 1963 remote – application dismissed); Re St Bernards Park Ltd’s Application (1963) 15 P&CR 90 (covenant restricting buildings to use as a private residence only – no density restriction – applicant sought modification to permit erection and use of a four-storey block of 12 flats on a half-acre site. The Tribunal granted the application under paragraph (c) holding that any injurious effect would be less, should the development take place, than other potential development which was not restricted by the covenant. See, also, Re Mercian Housing Society Ltd’s Application (1971) 23 P&CR 116, at 122 (a decision under paragraph (b)). But this factor must only be ‘had regard to’ in considering the question of injury: see Re Ghey and Gallon’s Application [1957] 2 QB 650, CA, where the Tribunal expressed the view that a convalescent home (for which the applicants sought modification) would be preferable to conversion into flats (which the objectors offered to permit), but Lord Evershed said (at p 664) that that was ‘not the question which the Act requires to be answered’. 32 As in Re Hornsby’s Application (1968) 20 P&CR 495. 33 Re Campbell’s Application (1958) 9 P&CR 425, at 429, where the Tribunal found that the objectors (two neighbouring residents) would not be injured provided that the proposed development proceeded in conformity with the restrictions imposed elsewhere on the estate, and made an order accordingly; Re Peyton’s Application (1959) 12 P&CR 263 (application to permit bungalow on plot limited to one dwelling house already built – plot ‘odd man out’ in being two-and-a-half times the size of any other plot and therefore bungalow would not injure objecting neighbours – application granted). 34 Re Emery and Emery’s Application (1956) 8 P&CR 113 (application to permit building of an additional house on a plot of two acres forming part of the Catton Estate in Harpenden refused on the ground (inter alia) that whilst it would not result in any immediate injury to the estate, parts of which were owned by the principal objector who was the son of the original vendor, it would injure the estate by encroaching on a woodland area which was a special feature of the layout of the estate). Compare Re Purnell’s Application (1987) 55 P&CR 133 (application under paragraph (aa) for an additional house on a large plot on the Chelsfield Park Estate in Kent refused).

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22.16  Section 84(1) of the Law of Property Act 1925: para (c) (5) in the case of a freeholder entitled to a reversion subject to a long lease, the fact that the only effect of building an additional house would be to improve the value of the reversion;35 (6) the fact that the proposed user is as equally innocuous as the existing permitted user.36 Where the application plot and the land owned by an objector are some distance apart—so that there is no obvious indication of injury, the fact that there is no evidence of injury;37 (7) the fact that the character of the proposed development would be out of keeping with the existing development;38 (8) the fact that the proposed development consists of a building by way of extension of existing commercial (garage) premises and that, although proposed to be built partly on land confined by the restriction to houses, it would be used only for the storage of cars currently parked in an adjoining road;39 (9) the fact that a proposed television mast was well-designed and suited to the wooded application site would not affect the value of the houses of any of the objectors and was preferable to other uses to which the site might (consistently with the restriction not to use the site except as a public park or public pleasure ground) be put;40 (10) the fact that the proposed development would interfere with the reasonable personal predilections of those entitled to the benefit of the restriction;41 35

36

37

38

39

40 41

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Re St Mary Magdalene Parochial Church Council (1968) 20 P&CR 508, at 511. See, also, Re Stephen’s Application (1969) 20 P&CR 513 at 522, where the President (Sir Michael Rowe QC) found that the proposed use of a house as a private hotel or restaurant, where the house was held under a lease for 99 years from 1926, would not injure the freehold reversioner. Re North Bedfordshire Association for Moral Welfare’s Application (1959) 10 P&CR 429 (application granted to allow a building used as a laundry to be used as a furniture repository); Re Allnatt (London) Ltd’s Application (1959) 12 P&CR 256 (building on land in Ealing prohibited except for a factory or warehouse or workshop or offices – application seeking modification to permit the erection of dwelling houses, maisonettes or flats with garages, granted subject to conditions, there being no evidence that the objectors, assuming they were entitled to the benefit of the restriction, would be injured). Re Gateshead County Borough’s Application (1960) 12 P&CR 265. The same applies, in the absence of evidence that the proposed development is objectionable on aesthetic grounds, where the covenantee is a local authority which is merely ‘deemed’ to own benefited land – the covenant having been entered into pursuant to section 37 of the Town and Country Planning Act 1962 (afterwards s 56 of the 1971 Act and s 106 of the 1990 Act): Re Beecham Group Ltd’s Application (1980) 41 P&CR 369. Re K & C Bhavnani (Holdings) Ltd’s Application (1960) 12 P&CR 269 (application to allow three ‘modern regency chalet bungalows’ on land in Heathfield, Sussex, restricted to one detached dwelling house refused as being injurious to the objectors entitled to the benefit of the restriction who owned neighbouring houses. The proposed regency chalet bungalows were assumed by the member of the Tribunal to be houses of a style ‘likely to have been approved by the Prince Regent, reincarnate …, if in the meantime he had studied domestic architecture first in Geneva and then in Bengal’). Re Alwoodley Motors Ltd’s Application (1961) 13 P&CR 195 (application granted to permit storage building to be erected partly on land restricted to houses such building being ancillary to and immediately adjoining existing commercial garage premises). But see Re Beech’s Application (1990) 59 P&CR 502, where, on the facts, a contrary approach was adopted (Judge Marder QC sitting as a member of the Lands Tribunal). Re Independent Television Authority’s Application (1961) 13 P&CR 222. Re Stevens’ Application (1962) 14 P&CR 59, where the desire of two of the objectors to enjoy the seclusion afforded by the covenant was upheld by the Tribunal even though the proposed development might enhance the value of their property. Similarly, in Re Robinson’s and O’Connor’s Application (1964) 16 P&CR 106, the Tribunal refused to modify a restriction

The constituent elements of paragraph (c) 22.16 (11) the fact that, in the well-preserved Cressington Estate in the City of Liverpool set out more than 100 years previously, the proposed development would infringe a 10-yard building line and result in overlooking of neighbouring gardens.42 But for prospective overlooking by itself to amount to injury there must be a realistic likelihood that this will be the reality;43 (12) in the case of the benefited land being undeveloped albeit suitable for future development, the fact that the proposed development on the restricted land would not reduce the value of the benefited land;44 (13) the fact that the proposed development would obstruct the view from the benefited land;45 (14) the fact that it was unlikely that any part of a proposed new house would be visible from any part of the objectors’ properties;46 (15) the fact that the alleged injury consisted only of nuisance and annoyance during the relatively short period of construction of a new wall and porch;47 (16) the fact that an increase in density, if the proposed development were permitted, would not affect the objectors’ privacy, or cause any increased noise or other detriment to their enjoyment of their particular property;48 (17) the fact that an extra house would cause ‘considerable detriment to [two of the objectors’] amenities’ in the form of overlooking, proximity, loss of sense of spaciousness and nuisance from the carrying out of the proposed building works;49

requiring a shop to be used only for the trade or business of draper so as to enable it to be used for the sale of liquor under an off-licence on the ground that an adjoining shop owner who lived over the shop would suffer (and had suffered) a material diminution in the quiet enjoyment of his premises by reason of car doors banging, and general nuisance from the congregation of teenagers outside the off-licence premises. 42 Re Shaw’s Application (1966) 18 P&CR 144 (where, incidentally, the applicant’s endeavour to castigate the covenants as more relevant to the ‘horse and buggy or Crimean era’ failed to impress the Tribunal). 43 See Re Zopat Developments’ Application (1966) 18 P&CR 156, at 159 where the President of the Tribunal (Erskine Symes QC) said: ‘I cannot believe that the occupants of the proposed house will spend their days looking out of the bedroom windows. It is, I am satisfied, a case where the prospect terrifies while the reality will prove harmless’. 44 Re Knott’s Application (1967) 19 P&CR 282 (restriction modified under paragraph (c) to permit the erection of a pheasantry, a pheasant manager’s house and a house for the applicant). 45 See, eg Re Collett’s Application (1963) 15 P&CR 106 (Tribunal found that the proposed modification would seriously restrict the view from an objector’s property with consequential depreciation of its value), and Re St Albans Investments Ltd’s Application (1958) 9 P&CR 536 (view from Richmond Hill and riverside walk would be placed in jeopardy). See, also, Re SJC Construction Co Ltd’s Application (1974) 28 P&CR 200. (The application was granted under paragraph (aa) and subsequently came before the Court of Appeal on the question of the compensation: see SJC Construction Co Ltd v Sutton London Borough Council (1975) 29 P&CR 322.) See, also, Gilbert v Spoor (1982) 44 P&CR 239, at 247 where, in the context of an application based on paragraph (aa), Waller LJ said: ‘A view is not something which can be valued in money terms; indeed it may be, and perhaps I would say in this case is, priceless’. 46 Re Chapman’s Application (1980) 42 P&CR 114. 47 Re Brown’s Application (1977) 35 P&CR 254, at 257. The Tribunal treated the objector’s complaints of injury on this ground as ‘trivial’ and granted the application under paragraph (c). Presumably this was a reflection of Russell LJ’s principle in Ridley v Taylor of the objections being ‘frivolous’, as to which see further above, footnote 4. 48 Re Farmiloe’s Application (1983) 48 P&CR 317, at 320. On the facts, the Tribunal also found (at 321) that the ‘thin end of the wedge’ argument was ‘much too remote’. 49 Re Williams’ Application (1987) 55 P&CR 400; Re Davies’s Application (1971) 25 P&CR 115.

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22.17  Section 84(1) of the Law of Property Act 1925: para (c) (18) the fact that a covenant preventing the conversion of a detached barn to a dwelling has the effect of imposing a cordon sanitaire in relation to a nearby working farm, avoiding complaints that could be made by occupiers of such a dwelling about noise, smell and disturbance from the objectors’ farming activities, which, though the occupiers would have no legitimate complaint, would be capable of being time consuming, stressful, and costly for the objectors to deal with.50 22.17

The following have been specifically identified as irrelevant:

(1) the fact that if the proposed development were carried out, this would enhance the value for development of the objector’s land – except that this might be relevant in a case where there is no indication that any specific injury would be suffered by the objectors;51 (2) the fact that if the restriction were discharged or modified, the persons entitled to its benefit would be deprived of the opportunity of exacting a contractual payment in respect thereof;52 (3) the fact that if the restriction were discharged or modified and the proposed development went ahead, an objector owning neighbouring land would be precluded (under the terms of an earlier density restriction which affected both the applicant’s and the objector’s land) from developing his own land (for which he already had planning permission);53 (4) the fact that the objector would suffer nuisance and annoyance while the proposed works were in progress, where that was the only cause for complaint which was established and that complaint was itself regarded by the Tribunal as trivial.54

50 51

Re Wake’s Application (2002) LP/2/2001. Re Stevens’ Application (1962) 14 P&CR 59, at 62. The Tribunal, whilst recognising that the carrying out of the proposed development might enhance the value, for development purposes, of the adjoining land of two of the objectors, pointed out that the benefits conferred by a restrictive covenant need not be financial and that since the objectors desired the seclusion afforded by the covenant (of the benefit of which they had taken a specific assignment) they might be injured by the proposed development. However, in the absence of evidence of any specific benefit claimed to be at risk, the fact that the proposed development would improve the value of an objector’s property will weigh in favour of there being no injury: see, eg Re Mills’ Application (1967) 18 P&CR 391, at 393. 52 See Re Bennett’s and Tamarlin Ltd’s Application (1987) 54 P&CR 378, at 384; and also Stockport Metropolitan Borough Council v Alwiyah Dvelopments (1986) 52 P&CR 278, esp per Eveleigh LJ at the end of his judgment at p 282, and Re EMI Social Centre Ltd’s Application (1979) 39 P&CR 421 at 427, both of which cases were, however, decided under paragraph (aa). In Re Watson’s Application (1966) 17 P&CR 176, where the Tribunal found that land which was sold for £50 subject to a restriction not to use it except as a garden was so restricted in order to ensure that if ever the land became a ‘cake’ (by becoming valuable for building purposes) the vendor would get a share of it. But the Tribunal held that the vendor’s loss of his contractual right to damages for breach of the restriction was replaced by the statutory provisions relating to compensation so that (exchange being no robbery) the vendor would not be ‘injured’ by the discharge of the restriction. 53 Re Hydeshire Ltd’s Application (1993) 67 P&CR 93. At p 100 the Tribunal said: ‘With regard to ground (c) it is not necessary for us to make a finding. However, the ‘injury’ contemplated by this paragraph is an injury to the objector’s proprietary interest – see Ridley v Taylor and an injury brought about in consequence of the discharge or modification sought. In our judgment the form of injury claimed by this objector is not a consequence of the proposed modification, but a consequence only of the objector’s failure to get his building done earlier, at a time when the restriction would not have prohibited him. No other injury is claimed, and therefore we would have found for the applicant on ground (c)’. 54 Re Brown’s Application (1977) 35 P&CR 254, at 257.

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The constituent elements of paragraph (c) 22.18 (5) the fact that the person benefited is a local planning authority and has control over development in its area even if a covenant contained in an agreement under section 52 of the Town and Country Planning Act 197155 is discharged, the statutory regimes for planning and restrictive covenants being separate and distinct.56

‘The persons entitled’ 22.18 In the case of restrictive covenants entered into with local authorities pursuant to the former section 106 of the Town and Country Planning Act 1990 (or its predecessor sections in earlier Acts such as section 52 of the Town and Country Planning Act 1971),57 the local authority is regarded as holding the benefit of the restrictions for those members of the local community who benefit from them. Accordingly, the question would be whether the proposed discharge or modification would injure those persons (rather than the local authority as such).

55 56

57

As to which, see para 10.8 above. Re Rasbridges’ Application [2012] JPL 1521, at paras 66–68. At para 68 the Tribunal said, ‘Restriction 3(b) enables the council to retain absolute control over the residential development of the Cefn Betingau Farm complex. There is no right of appeal to the Secretary of State which there would be were the restriction to be discharged and the council were to rely upon its planning powers in respect of all future proposed residential development on this site. The discharge of restriction 3(b) would, in my opinion, injure the council by removing the absolute control over development which the original parties to the s 52 agreement agreed to in 1986. I am not satisfied that the proposed discharge of restriction 3(b) will not injure the objector and I therefore refuse the application’. Cf Re Bewick’s Application (1997) 73 P&CR 240, which stands somewhat uneasily alongside this, but where it was found the removal of the restriction would not injure the council on the facts. See also, however, the comments of the Court of Appeal in Graham v Easington [2008] EWCA Civ 1503 in relation to ground (aa) (in a non-s 52 case) at para 20.62 above. As to which, see para 10.8 above

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23 The power of the Upper Tribunal to award compensation

THE TRIBUNAL’S POWER 23.1 Where the Tribunal makes an order discharging or modifying a restriction under section 84(1) of the Law of Property Act 1925, that subsection1 confers a discretionary2 power on the Upper Tribunal: ‘… to direct the applicant to pay to any person entitled to the benefit of the restriction such a sum by way of consideration as the Tribunal may think it just to award under one, but not both, of the following heads, that is to say, either— (i)

a sum to make up for any loss or disadvantage suffered by that person in consequence of the discharge or modification; or (ii) a sum to make up for any effect which the restriction had, at the time when it was imposed, in reducing the consideration then received for the land affected by it.’

THE PERSONS IN WHOSE FAVOUR COMPENSATION MAY BE AWARDED 23.2 The Tribunal has power to award compensation3 ‘to any person entitled to the benefit of the restriction’ which the Tribunal is discharging or modifying.

1 2

3

As amended by the Law of Property Act 1969, s 28(1) and Sch 1. There appears to be no reported case in which, a case for compensation having been made out, the Tribunal has declined, in the exercise of its discretion, to make an award. In Re Bennett’s and Tamarlin Ltd’s Application (1987) 54 P&CR 378, at 385,the President of the Tribunal pointed out that ‘loss of bargaining power … is something for which I have no power in the circumstances of the present case to compensate.’ But he later added: ‘If I had power to order the payment of compensation or consideration on that basis, I would, as a matter of discretion, decline to exercise that power’. The word used in the amended s 84(1) is ‘consideration’ and not ‘compensation’, although the pre-1970 provisions used the word ‘compensation’. In Re SJC Construction Ltd v Sutton London Borough Council (1975) 29 P&CR 322, at 327, Stephenson LJ referred to ‘compensation (or consideration)’ thereby apparently treating the difference of language as of no significance. The same approach was adopted by VG Wellings QC in the Tribunal decisions of Re EMI Social Centres Ltd’s Application (1979) 39 P&CR 421, at 422 and (after he had become President) Re Bennett’s and Tamarlin Ltd’s Application ((1987) 54 P&CR 378, at 384–385). Apart from these specific references, the decisions of the Tribunal and the court have used the word ‘compensation’ and this word is used throughout this chapter. In Re Bennett’s

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23.3  The power of the Upper Tribunal to award compensation The several ways in which a person may be able to show that he has the benefit of a restriction have been considered in Chapters 2 to 8. In the present context, however, for a person to qualify for compensation, it seems clear that the Tribunal must be satisfied that he is a person entitled to enforce the restriction against the applicant,4 since ‘the restriction’ referred to is (by the opening words of the subsection) one affecting land in which the applicant has an interest. 23.3 It does not appear to be strictly necessary for a person to be an objector appearing before the Tribunal in order to be considered for compensation, and this is supported by comments made in the following cases, although there appears to be no reported case in which it has awarded compensation to such a person. In Re Dartmouths’ Application5 the Tribunal (AJ Trott FRICS) said: ‘Section 84(1) of the Act provides that an order modifying a restriction may direct the applicant to pay any person entitled to the benefit of the restriction such sum by way of consideration as I may think it just to award to make up for such loss or disadvantage. In the absence of any objections or evidence and in all the circumstances of this case I do not consider that it would be just to make any such award.’ The reference to the absence of any objections ‘or evidence’ and ‘in all the circumstances of the case’ will be noted. 23.4 In Re Lynch’s Application6 the Tribunal (PD McRea FRICS) awarded £25,000 reduction in the value of land to one objector and £15,000 to another, and said, ‘I am not persuaded that there would be any effect on the value the houses of any of the other objectors, although I would stress that this is not because they did not attend to give evidence, but because their properties were not adjoining the application land’.

THE STATUTORY YARDSTICK FOR ASSESSING COMPENSATION 23.5 The following words constitute the only guidance provided by section 84(1) itself as to the method of assessing the monetary compensation under either heads (i) or (ii): ‘such sum by way of consideration as the Tribunal may think it just to award.’

4

5 6

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and Tamarlin Ltd’s Application (1987) 54 P&CR 378, at 384, the President declined to treat the word ‘consideration’ as authorising an award for loss or disadvantage which was other than compensatory. An original covenantee may be entitled to the benefit of a restriction in the sense of being able to enforce it against the original covenantor who had disposed of part of the burdened land to the applicant. Yet if, for some reason (eg having since ceased to own any benefited land) the original covenantee could not enforce it against the applicant, it is submitted that he would not be a ‘person entitled to the benefit of the restriction’ within the meaning of the subsection. (If this were not so, then such an original covenantee would prima facie qualify for consideration of an award of compensation under paragraph (ii) of the subsection.) (2006) LP/64/2004. [2016] UKUT 488 (LC).

The two alternative heads of compensation 23.8 23.6 In SJC Construction Co Ltd v Sutton London Borough Council,7 Lord Denning MR concluded that these words meant ‘There is no method prescribed by the Act by which it [compensation] is to be assessed; it is essentially a question of quantum’. Similarly, in Stockport Metropolitan Borough Council v Alwiyah Developments,8 Dillon LJ observed: ‘But there is no hard and fast formula which governs what sum should be awarded by way of compensation for loss or disadvantage occasioned by the modification of a restriction …’. 23.7 It is submitted that the position which emerges from the above two cases (the details of which are considered further below) is as follows: (1) Where the loss is readily measurable in money terms (for example, where the only loss is a reduction in the value of the land benefited by the restriction) which depends on a single formal method of valuation9 (in the example just given, in establishing the value of the land with and without the removal of the restriction), prima facie the ‘just’ approach is for the Tribunal to adopt that method of valuation. (2) Where the subject-matter of compensation is not capable of measurement in precise monetary terms (where, for example, it is for loss of the amenities of the occupier),10 then the Tribunal has a discretion as to how to assess it in order to arrive at what is fair. (3) Where the subject-matter of compensation lends itself to more than one method of valuation,11 then the Tribunal has a discretion, exercisable by reference to what it considers ‘just’, as to which method to adopt.

THE TWO ALTERNATIVE HEADS OF COMPENSATION 23.8 The language of section 84(1) confers a general discretion on the Tribunal to award compensation under either heads (i) and (ii) (but not both). However, whilst compensation under head (ii) can (where the facts justify it) equally well be awarded regardless of which of the grounds (a), (aa), (b) or (c) the Tribunal has relied upon for discharging or modifying the restriction, a case for compensation under head (i) is, as a practical matter, likely to be able to be made out (if at all) only where the Tribunal relies upon ground (aa) or (when the question of compensation is left to the Tribunal12) (b) for discharging or modifying the restriction.13 7 8 9

(1975) 29 P&CR 322, at 326, CA. (1986) 52 P&CR 278, at 285, CA. Eg, where the only loss consisted of a reduction in the value of the land benefited by the restriction. 10 Eg, as in the case of loss of amenities. In the SJC Construction case, Lord Denning MR said ((1975) 29 P&CR 322, at p 326): ‘… loss of amenities, loss of view and so forth, … are things which it is hard to assess in terms of money. It is similar to compensation for pain and suffering, which cannot be translated into money terms; the courts have, therefore, to arrive at conventional sums which they award’. 11 As in the case of the loss of certain amenities: see the observations of Dillon LJ in the Stockport case (1986) 52 P&CR 278, at pp 284–285. 12 See Re Clearwater Properties Ltd’s Application at para 21.9 above. 13 There is no reported case where the Tribunal has exercised its jurisdiction solely on ground (a) and/or (c) and at the same time made an award of compensation under head (i). But as to the possibility of a claim for compensation in respect of certain out-of-pocket expenses see Re Bennett’s and Tarmarlin Ltd’s Application (1987) 54 P&CR 378, at 385 and see below paras 23.47–23.48.

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23.9  The power of the Upper Tribunal to award compensation

Head (i): a ‘sum … to make up for any loss or disadvantage suffered by that person14 in consequence of the discharge or modification’ ‘Loss or disadvantage suffered’ 23.9 Whilst (in the circumstances referred to above) the Tribunal may have a discretion as to how to value the loss or disadvantage, its first concern is to identify the subject-matter (if any) which falls to be valued. Evidence must accordingly be adduced to show what ‘loss or disadvantage’ (if any) will be suffered by the claimant in consequence of the discharge or modification. The words ‘loss or disadvantage’ emphasise that the subject-matter of compensation is the detriment suffered by the person entitled to the benefit of the restriction in consequence of the discharge or modification – not the benefit conferred upon, or resulting to, the owner of the burdened land.15 The reported decisions of the Tribunal and the courts show that there are two main kinds of loss or disadvantage which the person entitled to the benefit of the restriction may suffer in consequence of the discharge or modification.

(1)  Loss of value 23.10 The direct result of the discharge or modification may (though will not necessarily16) be to diminish the market value of the benefited land. A claim to such loss will generally be expected to be established by appropriate expert evidence as to market values before and after the proposed discharge or variation,17 the loss being the difference between the two. However, the Tribunal includes members who themselves have valuation expertise (and all are used to making judgments on the basis of valuations) and in Re Rae18 the Tribunal19 held that although the only expert evidence was that of

14 Ie ‘any person entitled to the benefit of the restriction’. As to the meaning of these words, see para 23.2 above. 15 This emphasises a fundamental distinction between the two alternative heads of compensation. Under head (ii), considered below, regard is had to the position of the original covenantor. The distinction was in fact highlighted in the original (unamended) provisions of s 84(1) where it was specifically provided ‘that no compensation shall be payable in respect of the discharge or modification of a restriction by reason of any advantage thereby accruing to the owner of the land affected by the restriction, unless the person entitled to the benefit of the restriction also suffers loss in consequence of the discharge or modification, nor shall any compensation be payable in excess of such loss; but this provision shall not affect any right to compensation where the person claiming the compensation proves that by reason of the imposition of the restriction, the amount of the consideration paid for the acquisition of the land was reduced.’ The requirement of this original provision that there should be shown to have been both a reduction in the original purchase price and a higher value accruing to the owner of the burdened land as a result of the discharge or modification (as demonstrated by the decision in Re Alwoodley Motors Ltd’s Application (1961) 13 P&CR 195) no longer applies. Under the amended s 84(1), it is now sufficient to establish a claim to compensation that there was a reduction in the original purchase price. 16 See Re Stevens’ Application (1962) 14 P&CR 59, at 62; Re Mills ‘Application (1967) 18 P&CR 391, at 397. 17 See, for example, Stockport Metropolitan Borough Council v Alwiyah Developments (1983) 52 P&CR 278, at 280–281. 18 [2016] UKUT 552 (LC). 19 HH Judge Behrens and Peter D McRea FRICS.

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The two alternative heads of compensation 23.13 a surveyor (Mr Kelly) called by the applicant to the effect that there would be no diminution in value at all by the erection of a further dwelling on the application land by the modification sought (the objectors calling no expert evidence), ‘as an expert Tribunal we are not obliged to accept Mr Kelly’s valuation and can form our own judgment’. This they did, and awarded £5,000 compensation in the case of one house with the benefit of the covenant, and £2,500 in the case of the other (representing something under two per cent of the value of the property in each case). 23.11 In arriving at appropriate values it would be useful for the expert witnesses to consider any effect on valuation of any further restriction on the burdened land which the Tribunal might propose as a condition of an order in exercise of the power conferred by section 84(1)(1C). Accordingly, the possibility of any such further restriction being proposed and accepted should where practicable be raised in the course of comments on experts’ reports following exchange and if not then raised should be raised at the hearing in time to enable appropriate questions to be put to the expert witnesses and thus avoid the necessity for their subsequent recall. 23.12 A question arises whether the subject-matter of the loss or disadvantage can extend to land other than land which has the benefit of the restriction in the technical sense. In Stockport Metropolitan Borough Council v Alwiyah Developments,20 Eveleigh LJ said: ‘It may be possible to envisage a case where a loss or disadvantage which is only a financial one and not a practical benefit is a proper subject for consideration. I would not wish to decide that the loss or disadvantage can only be a practical one. For example, other property not entitled to the covenant in which the covenantee has an interest may be affected in value by the loss of the covenant.’ These observations were obiter only since the Stockport case clearly proceeded on the basis that the 11 houses on the Borough’s adjoining land which would be depreciated by the proposed development were entitled to the benefit of the restriction.21 Further, Eveleigh LJ went on to say: ‘However, it must always be shown that the loss has been suffered in consequence of the modification’.

(2)  Loss of amenities 23.13 In two cases, diminution in the market value of the benefited land will be the only loss or disadvantage suffered by the owner of that land, namely: (a) where the owner is neither an occupier nor a person having a direct interest in the amenities enjoyed by the occupier;22 (b) where the owner is intending to dispose of his interest in the benefited land in the immediate future.

20 21 22

(1983) 52 P&CR 278, at 282. Although the precise words of covenant do not appear from the report. As, for example, in the case of a reversioner subject to a long lease: see Re EMI Social Centres Ltd’s Application (1979) 39 P&CR 421 and Re Briarwood Estates Ltd (1979) 39 P&CR 419. See, also, Re Bennett’s and Tamarlin Ltd’s Applications (1987) 54 P&CR 378 (trustee owners of 600 houses on the St Aubyn Estate in Plymouth).

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23.14  The power of the Upper Tribunal to award compensation 23.14 However, in other cases, in addition to any loss of value (or even if there is none),23 the owner, as occupier or as a person having a direct interest in the amenities enjoyed by the occupier, may suffer loss of quality of enjoyment in consequence of the proposed development of the burdened land.24 If there is evidence of such loss,25 then compensation for it may be awarded. Thus, if the proposed development would spoil a view from the benefited land,26 or result in overlooking or increased noise, or destroy a sense of spaciousness,27 or anxiety28 compensation for such loss or disadvantage may be awarded. 23.15 In looking at the extent of the loss, it may be necessary to take into account the effects of any alternative development that would, in practice, be likely to come forward even without discharge or modification of the restriction: see Re Fairclough Homes Ltd’s Application,29 quoted by Carnwath LJ for the Court of Appeal in Shephard v Turner.30

Assessment in the case of losses which are incapable of precise monetary measurement 23.16 In Re Carter’s Application,31 the Tribunal considered the development proposed would lead to the loss of a pleasant outlook, and even though this would not result in any depreciation in the value of the objectors’ properties, in the exercise of its discretion the Tribunal awarded the sum of £200 compensation to the owner of one of them for the partial loss of a sea view; £100 to the owner of another for the partial loss of outlook over a pleasant garden; and £200 to the third for the partial loss of a pleasant outlook from the south side of the house and for general disturbance during building operations. These were simply general figures, incapable of being scientifically arrived at, assessed as broadly compensating for what had been lost having regard to the injury suffered. 23.17 However, in Re SJC Construction Co Ltd’s Application, the Tribunal32 (Douglas Frank QC) took instead a figure that was related to the development value of the land subject to the covenant which was modified to allow it to take place. This may be thought somewhat surprising, but the decision in the case was upheld by the Court of Appeal.33 23 As confirmed by the Tribunal in Re Skupinski’s Application (2004) LP/34/2003, at para 20. 24 Referred to in Re Kershaw’s Application (1975) 31 P&CR 187, at 190 as ‘consumer surplus’. 25 As to the need for evidence of loss, see below at para 23.33, footnote 55 and the decision of the Lands Tribunal for Scotland in Keith v Texaco Ltd (1977) 34 P&CR 249, LT for Scotland, where the objectors failed to prove either that the applicants’ land had been sold for less money on account of the restrictions imposed (head (ii)) or that they had suffered any significant harm (head (i)). 26 Re Banks Application (1976) 33 P&CR 138. 27 As in Re Kershaw’s Application, above. 28 As in Re Marcello Developments Ltd’s Application (2001) LP/18/1999 and LP/31/2000; Winter v Traditional & Contemporary Contracts Ltd (No 2) [2007] EWCA Civ 1088. 29 (2004) LP/30/2001, at paras 29–30. 30 [2006] 2 P&CR 28, at para 40. 31 (1973) 25 P&CR 542. 32 (1974) 28 P&CR 200. 33 (1975) 29 P&CR 322.

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The two alternative heads of compensation 23.19 23.18

The facts were as follows:

On the sale of one-third of an acre of land in Cheam, Surrey, to the applicant’s predecessor in title, the purchaser covenanted that the land should be used only for the erection of one dwelling house, the plans to be approved by the vendor, and that it should not be used for the erection of flats or maisonettes. The benefited land lay to the east of the burdened land and consisted of an Elizabethan house in over an acre of grounds which was now owned by the Council of the London Borough of Sutton. The applicant had obtained planning permission from the council (as planning authority) to erect a twostorey block of six four-roomed flats and six garages on the burdened land and had demolished the existing dwelling house and commenced building the block of flats. The council then commenced proceedings for an injunction which were stayed pending the outcome of the application to the Lands Tribunal for modification of the restriction to permit the erection of the flats and garages. At the time of the issue of those proceedings the flats had been constructed up to first-floor level at a cost of some £47,000. If completed, the flats would extend in a virtually unbroken line from one side of the burdened land to the other and would impede the views from a two-storey building and its grounds which the council intended to construct and lay out on threequarters of an acre of the benefited land to provide bedrooms and communal rooms for old people together with a warden’s flat and parking facilities. The council itself would oversee the management and running of the old peoples’ accommodation in exercise of its statutory functions. 23.19

The Tribunal34 held as follows:

(1) The case was not one falling within subsection (1A)(a) since: (a) the loss of the amenities available to the occupants of the old peoples’ dwellings would (through those occupants) constitute a loss of amenities available to the council; and (b) that loss constituted a loss by the council of practical benefits of substantial value or advantage. (2) The case was one falling within subsection (1A)(b) since the restriction, in impeding the proposed user, was contrary to the public interest taking into account (inter alia): (a) there was a scarcity of land available for housing in the whole of the south east of England, including the area of Sutton and Cheam; (b) if the restriction were not modified, then presumably the building work already erected would have to be demolished and thereby £47,000 worth of building would be wasted; (c) on the assumption that a substantial amount of compensation can be awarded, although there would be loss to the public interest so far as publicly-owned land would suffer some disadvantage, yet some other public interest could be furthered. (3) The Tribunal had power to, and should in this case, award the sum which it considered the parties would have agreed upon, on a willing buyer and seller basis, for a release of the restriction so as to permit the development,

34

(1974) 28 P&CR 200.

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23.20  The power of the Upper Tribunal to award compensation disregarding any advantage accruing by reason of the building having been partly erected. (4) On a finding that the difference between the value of the burdened land for a single house and its value for the development in progress was £19,000, and applying the principle in Stokes v Cambridge Corpn,35 the compensation should be assessed at one-half of the development value, ie £9,500. 23.20 On appeal on points (3) and (4) the Court of Appeal dismissed the appeal.36 It held that ‘an injury to amenities or obstruction of view or increase in noise or anything of that kind’ was the loss of something ‘which it is hard to assess in terms of money’ and (distinguishing the Scottish case of Re McVey’s and Robertson’s Application37), that in such a case it was open to the Tribunal to assess compensation by taking a percentage of the realizable development value of the land in relation to which the restrictive covenant was discharged or released, and that in the instant case the Tribunal had considered 50 per cent a fair share and there was no error of law in the approach taken. The principal judgment was given by Lord Denning MR. Stephenson LJ agreed, but said that the method adopted by the Tribunal was not the only method. Geoffrey Lane LJ agreed with both judgments.38 23.21 Where, however, a restriction, in impeding the proposed user is contrary to the public interest but does not result in any loss of the kind described by Lord Denning above (in effect, of amenity), then the case does not provide any basis for assessing compensation by reference to a share of development value and whether the level of compensation will be substantial will then depend upon evidence of the quantum of actual tangible loss (eg, depreciation of the benefited land), disregarding loss of bargaining power. 23.22 It is considered that the approach taken in SJC is at odds with principle in that compensation for loss that is not directly measurable in money terms does not generally fall to be assessed by reference to a share of the gain of the person who benefits from that loss. Lord Denning said that such compensation (for ‘loss of amenities, loss of view and so forth’) was ‘similar to compensation for pain and suffering, which cannot be translated into money terms’.39 However, compensation for pain and suffering is for that suffering not assessed by reference to a share in the amount gained by anyone liable to pay compensation. Further, a tangible loss easily translatable into money such as depreciation in the value of benefited land by reason of the discharge or modification of a covenant may well result in substantially less money being payable than if a share in the development value of the land subject to the covenant was taken (but the SJC approach only applies where there is a loss of something such as loss of amenities).

35 36 37 38 39

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(1961) 13 P&CR 77. (1975) 29 P&CR 322. (1973) 26 P&CR 429. At p 327. At p 326.

The two alternative heads of compensation 23.26 23.23 Subsequently, in Re Kershaw’s Application,40 the owner/occupiers of houses backing onto, or in the vicinity of, the application site (restricted to open space but on which the Tribunal’s order made under paragraph (aa)41 permitted three bungalows to be built) claimed compensation. The Tribunal rejected loss in market value as the limit of the appropriate measure of compensation on the ground that: ‘It would fail to take into account what has sometimes been referred to as “consumer surplus”, that is the loss peculiar to the occupier of a house, for example, the mere alteration in the local environment’. Accordingly, it was considered right to assess compensation to include something for that nonmonetary effect. The Tribunal then considered that it could value that loss either by the carrying out of empirical surveys or by asking what the owners, being reasonable persons, would have accepted in friendly negotiation. It rejected the first method of valuation on the ground that it would not be practicable and, adopting the second method, awarded sums of £1,500, £750, £500 and £250 respectively. 23.24 In Re Dransfield’s Application,42 in permitting the erection of a second dwelling house on a site restricted to one, the Tribunal considered that the objector whose house adjoined the site would suffer ‘a certain intrusion during the winter’ (when the trees would not be in leaf). The expert evidence on the opposing sides was there would be a negligible effect (applicant’s expert) and that there would be a depreciation in value of about five per cent of the value of the house, namely £3,000. The Tribunal awarded £1,000 compensation on what seems to have been a rough and ready assessment of the broad effects of the detriment that would be suffered. 23.25 However, in Re Banks Application,43 the Tribunal awarded £2,000 to each of two objectors in respect of the injurious effect on their houses of the construction of a bungalow which would ‘appear in the general panorama which includes the sea and … would, to some extent be an alien element in that panorama’, and in respect of ‘the concomitants of living’, such as lights, noise from car doors, television aerials, clothes lines and dustbins. This was simply a general figure as to the amount considered appropriate rather than being ascertained by reference to any diminution in value of the objector’s house or increase in value of the applicant’s land due to the covenant’s modification. 23.26 In Re Doig’s Application,44 an application to permit the erection of an additional house on a plot forming part of the Wimbledon House Estate was granted under paragraph (aa), the owner of a house on an adjoining plot being awarded £2,500 for loss or disadvantage consisting of some intrusion upon privacy, some extra noise and annoyance affecting access, and reduction in value of the house; but a claim that the house would be further depreciated because neighbouring plots would become candidates for subdivision was rejected as being without foundation. This was again done on a general feeling as to the appropriate level of compensation.

40 41 42 43 44

(1975) 31 P&CR 187 (Douglas Frank QC). Section 84(1)(aa) of the Law of Property Act 1925. (1975) 31 P&CR 192. (1976) 33 P&CR 138. (1980) 41 P&CR 261.

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23.27  The power of the Upper Tribunal to award compensation Similarly, in Re Austin’s Application,45 an additional house was permitted under paragraph (aa) subject to awards of compensation to two objectors of £2,000 and £750 respectively. 23.27 In Re Edwards’ Application,46 the Tribunal awarded £500, based on ‘a form of intelligent guesswork not in any way related to what might be assumed to be the diminution in value of the property as a result of the change’ in respect of a ‘minor change’ in the environment resulting from a change of use from residential to shop use. 23.28 Lord Denning, in SJC, referred to the five per cent of the development value taken by Brightman J in Wrotham Park Estate Co Ltd v Parkside Homes Ltd47 having been considered by the Tribunal to help it in deciding what compensation to award for the loss of amenities. However, that case involved an award of damages in lieu of an injunction. Where an injunction is refused it means the ability to bargain is lost, so that it is understandable that damages are assessed by reference to the development value of the freed-up land, which would obviously have featured in any bargaining exercise, to release it, which has been lost by reason of the refusal of the injunction. As Dillon LJ said in Stockport, this finds no place, however, in relation to compensation under section 84(1)(aa) and (1A) of the 1925 Act, and the actual percentage figure taken in the Wrotham Park case would seem to be of no assistance either. 23.29 It might be said that if modification was not made, an injunction would be granted, or if not, damages in lieu of an injunction would fall to be awarded on the basis of the loss of bargaining power (ie the Wrotham Park basis). It could, therefore, at first blush at least be argued that, ‘the loss or disadvantage which any … person will suffer from the discharge or modification’ is the loss of bargaining power, which is to be valued accordingly and be awarded as the proper amount of compensation. This would be an alternative basis for the assessment of damages. There are objections to that argument, which on closer examination appear well founded – see below para 23.38 et seq. However, all that need be said right now is that this was not the basis of the award in SJC, which expressly was for loss of amenity (which is the matter currently under consideration), and, loss of bargaining power was expressly rejected as a basis for assessment for compensation in its own right in both SJC and the Stockport case. In terms of simply compensating for loss of amenity, it is difficult to see the link with the benefit of discharge or modification to the developer. 23.30 The decision in SJC was considered by the Court of Appeal In Stockport Metropolitan Borough Council v Alwiyah Developments.48 Dillon LJ,49 with whose judgment Griffiths LJ agreed, said that SJC was a case where: ‘… the party entitled to the benefit of the restriction suffered the loss of a practical benefit of substantial value by the modification (on the grounds of public interest) in a case where there had been a “very serious loss of 45 46 47 48 49

638

(1980) 42 P&CR 102. (1983) 47 P&CR 458. [1974] 1 WLR 798. (1986) 52 P&CR 278. Ibid, at p 284.

The two alternative heads of compensation 23.32 amenity” and “what the Court of Appeal was approving was the President’s valuation of the loss of amenity and not the loss of a right to bargain or blackmail position.’ Dillon LJ further pointed out that ‘the loss of the right to bargain is not in itself a subject for compensation’, as did Eveleigh LJ. Dillon LJ went on to say, as he was constrained to do on the basis of the SJC case, that ‘the development value may be a relevant factor for consideration in some circumstances in valuing loss of amenity’, though that was putting it about as weakly as it could be put. 23.31 In the Stockport case itself, compensation for the loss of a view was in fact assessed by reference to the diminution in value of the houses on the Council’s benefited land. The facts were as follows: The appellant council owned a housing estate at Romiley, Stockport, Cheshire to which was attached the benefit of a restrictive covenant affecting an adjoining 4-acre site owned by the respondents. The covenant restricted the use of the 4-acre site to use for agriculture. Eleven of the houses on the council’s estate enjoyed a pleasant view over the 4-acre site. The Lands Tribunal granted the respondents’ application for modification of the covenant (under section 84(1)(aa)) to enable them to build 42 houses on the site and awarded the Council £2,250 as compensation based on the reduction in the selling price of the 11 council houses which would result from the carrying out of the development. At the hearing before the Tribunal the council had adduced evidence of both depreciation in the value of the 11 houses which would result from the intended development (in respect of which the Tribunal made the above award of compensation) and of the increase in value of the respondents’ land, or development gain (£150,000). But the Tribunal declined to treat any part of that gain as reflecting a loss suffered by the council. The council appealed, claiming compensation of, initially, the whole of the development gain (£150,000) but, after amendment, limiting its claim to £75,000 representing one half of the development gain. 23.32 The Court of Appeal upheld the Tribunal’s rejection of that claim and confirmed the correctness of an award to the council of the sum of £2,250 as representing the loss in market value of the 11 houses. Before the Court of Appeal, two arguments were put forward by the council in support of the contention that the loss suffered by the Council should be determined as a proportion of the development gain which would accrue to the respondents by modification, namely (in reverse order): (1) that the power to bargain for a substantial Stokes v Cambridge Corpn50 payment for the modification of the covenant was lost; (2) that the Council would suffer loss of amenities in that it would lose the ability to have houses with a view as part of its housing stock and consequently would be unable to house persons in property enjoying such a visual amenity.

50

(1961) 13 P&CR 77, LT.

639

23.33  The power of the Upper Tribunal to award compensation 23.33

As to (1), the view put forward by Eveleigh LJ was as follows:51

‘Any loss of a greater sum that might have been obtained by bargaining is not, in my opinion, a consequence of the discharge or modification of the covenant, but a consequence of the failure to negotiate some other sum before the powers of the Lands Tribunal under section 84 were invoked.’52 Dillon LJ (with whose judgment Griffiths LJ agreed) rejected the argument on more general grounds, and, as referred to above, observed in the course of his judgment,that: ‘The loss of the right to bargain is not in itself a subject for compensation, although the development value may be a relevant factor for consideration in some circumstances in valuing a loss of amenity.’53 As to (2) above, as both Eveleigh and Dillon LJJ pointed out,54 the council called no evidence to show the importance to them of having a stock of houses with a view, and the only loss of amenity which had been proved was loss reflected in the lower purchase price which purchasers of the 11 council houses would be prepared to pay. In relation to this loss, Dillon LJ said:55 ‘There is therefore a loss of amenity to be valued and compensation to be paid. It might therefore have been permissible for the Lands Tribunal to assess compensation for the council on the basis of what the council could fairly have asked in the way of some share, probably small, of the development value as the price of its consent to relax the restriction to permit the desired development. But there is no hard and fast formula which governs what sum should be awarded by way of compensation for loss or disadvantage occasioned by the modification of a restriction, or, if the compensation is to take the form of a percentage of the development value, what that percentage should be. Indeed it does not follow that the same formula must always be used to value any loss of amenity, however grave or slight. In the present case it was for the Lands Tribunal to assess the compensation for the loss or disadvantage suffered by the council. The judgment of the member of the tribunal indicates that he was seeking to apply the judgment of Lord Denning MR in the SJC Construction case, to which I have referred, and to value the loss of amenity. That was a correct approach. He was entitled on the facts to consider that the loss of amenity was slight. The fair price which the council could have demanded for giving a consent under the restriction to development which would have caused that loss of amenity

51 At p 282. 52 In the Lands Tribunal case of Re EMI Social Centres Ltd’s Application (1979) 39 P&CR 421, at 427, VG Wellings QC expressed the same point thus: ‘The only loss which the objectors have suffered is their power to extract from the applicants a sum of money in consideration of agreeing to vary the restriction with regard to the sale of alcohol. That loss derived not from the modification permitted by the Tribunal, but from the exercise by the Tribunal of its statutory power’. The same Tribunal rejected a claim for compensation based solely on loss of bargaining power in Re Bennett’s and Tamarlin Ltd’s Applications (1987) 54 P&CR 378. 53 At p284. See, also, the remarks of Eveleigh LJ at 281: ‘Bargaining power is only a benefit when it results in the receipt of the price upon the covenant being discharged. Such a benefit cannot be of the kind contemplated by the sub-s [(1A)] for it results from the discharge and not the continuance of the covenant’. 54 At pp 281 and 283. Griffiths LJ expressed his agreement with the judgment of Dillon LJ. 55 At pp 284–285.

640

The two alternative heads of compensation 23.36 could also have been slight, and the member of the tribunal was fully entitled to award compensation for the proved loss of the council in relation to sales to tenants.’ 23.34 This suggests the assessment of compensation for the loss of amenities looking at the increase in the development value of the burdened land by reason of the modification of the covenant, as adopted in SJC, might be taken in a case where it would be substantial. However, the judgment read as a whole makes clear that the aim is to fairly compensate for the objector’s loss of amenities, and though Dillon LJ clearly felt constrained to acknowledge that SJC decided ‘the development value may be a relevant factor for consideration in some circumstances in valuing loss of amenity’, as mentioned above, he put it no higher than that, with which Griffiths LJ agreed. 23.35 In Re Skupinski’s Application,56 the President of the Tribunal said that since the objector’s ability to enforce the covenant derived from the covenant’s ability to protect her land rather than from any reservation to her of the power to extract a share of the development value of the applicant’s land, and: ‘I would for my part seek if possible to assess compensation for any “loss or disadvantage” she has suffered by reference to the effect on her enjoyment of her own land rather than to the applicant’s gain. Of course the assessment of compensation for loss of amenity, where such loss is not, or is not wholly, reflected in a reduction in the value of the land, must inevitably be extremely judgmental, but I would not regard the applicant’s gain as a useful determinant of the objector’s loss.’57 23.36 In Winter v Traditional and Contemporary Contracts Ltd,58 the Court of Appeal has now made clear that the benefit to the applicant for discharge or modification is a side issue and that there will not generally be any basis for an award representing a share in the development value of the land on the basis of loss of amenity.59 In that case, the Court of Appeal said as follows:60 ‘SJC is undoubtedly a difficult decision, because the Court of Appeal seems, with respect, to have reinterpreted the tribunal’s award to fit its own different view of the law. However, it was clarified and set in context by the Stockport case. That should have dispelled any idea that objectors in cases of this kind have any expectation of a windfall “Stokes percentage” of the released development value, or anything like it. Even if the reasoning of Stockport was not sufficiently clear, the figures spoke for themselves. The award of £2,250 was upheld, in the face of an apparently credible Stokes claim of £75,000. Against that background, we find it surprising that, almost a quarter of a century later, this basis of claim is still being advanced by valuers and advocates (as in Skupinski and this case). This can only create unrealistic hopes in objectors, thus delaying settlement and aggravating the loss and anxiety which the section seeks to compensate.

56 57 58 59 60

(2004) LP/24/2003 (George Bartlett QC). At para 22. [2007] EWCA Civ 1088. And it was made clear in SJC itself it could not be awarded on any other basis: see p 236. Also pp 284–5 of the Stockport case. At paras 38–39.

641

23.37  The power of the Upper Tribunal to award compensation Even on the more limited basis, it is perhaps difficult, as a matter of logic, to see why impact on the amenity of one property can in any way be related to the enhanced profitability of another.’61 However, some very limited possible rationalisation was referred to by the court (though not taken to justify the award of an actual percentage share of the development value) as follows: ‘One rationalisation, at least in neighbour cases, may be a subjective one. An owner’s perception of the impact of an adjoining development may be aggravated by the perception of the profit being made by his neighbour. The same physical development carried out, say, for purely charitable purposes might not attract the same emotional response. Such ordinary human reactions may not find a place in the ordinary law of damages, but that is no reason to exclude them from the proper scope of section 84. To do so accords with the purpose of ground (aa), taken with the compensation provisions, which is to provide a proper balance between the public interest in facilitating development, and the protection of private contractual rights. Another factor which may bear on the relationship is the potential ability of the covenantee to influence the form of the development. There is little doubt that, in practice, such a person is in a good position to seek variations in the developer’s plans, so as to mitigate the effects of the development on his own property. Such changes may be achieved by negotiations or by conditions imposed by the tribunal. There is usually sufficient incentive for the developer to compromise, in order to avoid the delay and uncertainty of a contested tribunal application. We see no reason why the ability to protect amenity in that way should not be regarded as part of the ‘practical benefits of substantial value or advantage’ secured by the covenant. The developer’s willingness in practice to offer such mitigation is likely to depend in part on the profitability of his development.’ 23.37 SJC was accordingly not actually overruled, which is also a course only open to the Court of Appeal in relation to one of its own previous decisions on limited grounds under the principles set out in Young v Bristol Aeroplane Co62 which is always a very strong step for the Court to take and one which it will try to avoid where possible. However, the court indicated that whilst it may not be possible to say it is always wrong to look at the development value to be achieved by the discharge or modification of the covenant as a side issue (though that does not actually appear to be how it was approached by the court in SJC), in relation to a share in development value it was ‘surprising that almost a quarter of a century later, this basis of claim is still being advanced by valuers and advocates (as in Skupinski and this case)’. Following Winter, it is clear that it no longer should be.

61

62

642

In a footnote (to para 28) the Court also said that ‘Since what has to be valued is the loss of the objector’s ameneties, it is prima facie not helpful to approach that question obliquely by asking what a modification to the covenant adds to the value of the applicant’s development and then taking some indeterminate percentage of it’. [1944] KB 718.

The two alternative heads of compensation 23.40

A further possible head of loss for compensation purposes – loss of bargaining power as a head of loss in itself – has been rejected 23.38 As stated above, at first blush, it may be thought that, if the position was that if the discharge or modification of a covenant was not made, an injunction would thereafter be granted, or, if not, damages in lieu of an injunction would fall to be awarded on the basis of the loss of bargaining power (ie the Wrotham Park basis63), as a matter of principle and logic, ‘the loss or disadvantage which any … person will suffer from the discharge or modification’ could be taken to be the loss of bargaining power by reason of the discharge or modification, which should therefore be valued and awarded as the proper amount of compensation if it would exceed the amount of compensation recoverable on any other basis (ie on the basis of the two established heads of loss set out at paras 23.10–23.12 and 23.13–23.15 above). However, that was not the basis on which the award of compensation in SJC64 was upheld by the Court of Appeal, which was expressly on the basis that the development value of the (un)burdened land could be used in the assessment of compensation for loss of amenities. In relation to the loss of bargaining power, Lord Denning MR expressly said that compensation for that was not recoverable. 23.39 Referring to the decision of the Lands Tribunal for Scotland in Re McVey’s and Robertson’s Application,65 in which it was held that the Conveyancing and Feudal Reform (Scotland) Act 1970 (section 1 of which corresponded largely to section 84 of the Law of Property Act 1925) did not enable compensation to be granted merely for deprivation of the power to obtain money, Lord Denning MR said: ‘The only thing that the Glasgow Corporation lost was the opportunity of extracting money as the price of removing the restriction. Such was not the subject of compensation’. 23.40 It was also expressly rejected by the Court of Appeal as a basis for assessment for compensation in the Stockport case. Eveleigh LJ said66 that if the discharge or modification was not granted the bargaining power would remain. However, ‘the same event would be required to give value to the bargaining power as that which is alleged to have caused a valuable loss’, that is to say the modification or discharge of the covenant (there by the benefited person; under section 84, by the Tribunal). ‘Any loss of a greater sum that might have been obtained by bargaining is not, in my opinion, a consequence of the discharge or modification of the covenant, but a consequence of the failure to negotiate some other sum before the powers of the Lands Tribunal under section 84 were invoked’.

63 64 65 66

Wrotham Park Estate Co Ltd v Parkside Homes Ltd [1974] 1 WLR 798. SJC Construction Co Ltd v Sutton London Borough Council (1975) 29 P&CR 322, CA. (1973) 26 P&CR 429. At p 282. See also p 281 by reference to the wording of s 84(1)(aa) (misdescribed towards the top of the page as ‘subsection (1)(a)’.

643

23.41  The power of the Upper Tribunal to award compensation 23.41 Dillon LJ (with whose judgment Griffiths LJ agreed) observed in the course of his judgment,67 as referred to above: ‘The loss of the right to bargain is not in itself a subject for compensation’.68 23.42 This approach has been followed by Tribunals both before and after the Stockport case. For example, in Re EMI Social Centres Limited’s Application69 (before Stockport70), the Tribunal, having referred to Lord Denning MR’s judgment in SJC said:71 ‘The only loss which the objectors have suffered is their power to extract from the applicants a sum of money in consideration of agreeing to vary the restriction with regard to the sale of alcohol. That loss derived, not from the modification permitted by the Tribunal, but from the exercise by the Tribunal of its statutory power. In my judgment the objectors are not entitled to compensation for that loss.’ That perhaps best points towards the reasons why compensation for loss of bargain is not awardable under section 84(1) of the 1925 Act. 23.43 Once an application is made to the Tribunal, it is for it to say whether there should be discharge or modification and if so what compensation should be paid under section 84 in relation to losses suffered. The modification or discharge that takes place could be made by agreement or by the Tribunal under section 84(1). In either case, the modification or discharge is the same. Compensation is given for loss caused by the actual modification or discharge, not for the added factor that the Tribunal has been given power to do that, which it has exercised. Though it may be a subtle difference, section 84(1) refers to compensation for loss or disadvantage caused by the actual modification or discharge. If discharge or modification is made by agreement, there is a loss of bargaining power. If discharge or modification is by the Tribunal there is likewise a loss of bargaining power. If the restriction had been discharged or modified by agreement, money may (or may not) have been paid for the discharge or modification. However, the compensation payable under section 84(1) is not for the fact the Tribunal is given a statutory power of discharge or modification (without the agreement of the owner of the benefited land) which it is exercising but for the loss or disadvantage caused by the discharge or modification itself. 23.44 Further, in Re Skupinski’s Application72 the President of the Tribunal, having referred to SJC, said: ‘The inclusion of a specific provision in head (ii) providing, as an alternative, for a sum to make up for the effect which the restriction had, at the time it was

67 (1983) 52 P&CR 278, at p 284. 68 See, also, the remarks of Eveleigh LJ, ibid at p 281: ‘Bargaining power is only a benefit when it results in the receipt of the price upon the covenant being discharged. Such a benefit cannot be of the kind contemplated by the subsection [(1A)] for it results from the discharge and not the continuance of the covenant’. 69 (1979) 39 P&CR 421. 70 For cases after it, see, eg Re Bennett’s and Tamarlin Ltd’s Application and Re Skupinski, referred to below. 71 At p 427. 72 (2004) LP/34/2003 (George Bartlett QC).

644

The two alternative heads of compensation 23.47 imposed, in reducing the consideration then received for the land affected by it suggests that compensation is not payable under head (i) for any loss of bargaining power – the loss of the power to extract from the applicant a share in the increase in the value of the burdened land secured by the discharge or modification of the restriction.’73 23.45 It is also to be observed that section 84(1) is entirely focused on the effects of discharge or modification of the restriction in terms of land use. Otherwise, for example, ‘injury’ would always be caused by the discharge or modification of any restriction, as there would always be a loss of bargaining power in relation to the power of the person with the benefit of the covenant to release or relax it as sought by the owner of the burdened land in the application. It is suggested that section 84(1) is concerned with the effects (on those benefited by it) of the discharge or modification of the restriction in land use terms. The section gives the Tribunal power to modify or release the restriction in certain circumstances notwithstanding that, and it would appear to be for that that it intends compensation should be made. 23.46 Accordingly, the first blush reaction (para 23.38) would not seem correct and it would not appear that compensation should be given under section 84(1) for ‘loss of bargain’. Certainly, ‘loss of bargain’ compensation is not recoverable as a head of loss in itself at present74 where the law as laid down in the SJC and Stockport case in relation to that, albeit with limited reasoning, has been followed and applied in the cases that have followed, such as Re Bennett’s and Tamarlin Ltd’s Application75 and Re Skupinski.76

(3)  Other losses 23.47 In Re Bennett’s and Tamarlin Ltd’s Applications,77 the trustees of the St Aubyn Discretionary Trust (whose assets included the freehold of 600 or more of the 8,150 houses on the St Aubyn Estate in Plymouth) had expressed themselves as willing to give their approval for the conversion of the applicants’ freehold houses on the estate (restricted to private residences) into a suitable number of fiats provided that they paid compensation of £2,000 and £1,500 respectively. The applicants were unwilling to pay these sums and applied to the Lands Tribunal for modification of the restriction to permit the conversion and change of use. The President of the Lands Tribunal, VG Wellings QC, granted the application under both paragraphs (c) and (aa) and found that the trustees would suffer no loss of amenity or diminution in value of any of their properties. The President then went on to state: ‘I have not been asked to consider whether I should award to the trustees reimbursement of surveyor’s fees and other costs (if any) incurred by them in

73 74 75 76 77

At para 20. Though regard can potentially be had to it, where considered appropriate, under the seemingly anomalous heading of ‘loss of amenities’, as set out above. (1987) 54 P&CR 378, at p 384. At para 23.44 above. (1987) 54 P&CR 378, at 385.

645

23.48  The power of the Upper Tribunal to award compensation considering the request for approval of the applicants’ proposal. Moreover, I have no knowledge whatsoever of the amounts of such costs. For these reasons I make no award of compensation to the trustees.’ 23.48 It is submitted, however, that since any such costs would necessarily have been incurred before the Tribunal made its order, they could not have been incurred by the trustees ‘in consequence of the modification and that accordingly the Tribunal would have had no power to award compensation in respect of such costs.

Examples of awards made 23.49 As stated above,78 compensation is only in practice likely to be awarded where discharge or modification is made under ground (aa). For cases giving examples of awards made thereunder, see para 20.84 above.

Head (ii): ‘such sum by way of consideration as the Tribunal may think it just to award … to make up for any effect which the restriction had, at the time when it was imposed, in reducing the consideration then received for the land affected by it’ 23.50 The words ‘sum by way of consideration as the Tribunal may think it just to award … to make up for’ constitute the only guidance provided by section 84(1) of the Law of Property Act 1925 as to the method of assessing the monetary compensation payable and they have already been considered in connection with head (i).79

‘Any effect which the restriction had, at the time when it was imposed, in reducing the consideration then received for the land affected by it’ 23.51 Since the two heads of compensation are strictly alternative, a claimant will resort to head (ii) only if it seems likely to yield a higher sum than the sum which could be awarded under head (i). 23.52 Under head (i), the claimant must show that he has suffered ‘loss or disadvantage’ in consequence of the discharge or modification, whereas under head (ii) he must show that the original covenantor paid less for the land than he would have done had he not entered into the covenant. This produces the following significant differences between heads (i) and (ii). (1) As a practical matter, a claim for compensation under head (i) will usually be viable only where the Tribunal makes an order under paragraph (aa) or (b) of section 84(1). If the restriction is ‘obsolete’ (paragraph (a)) or ‘will

78 79

646

At para 23.8 above. See para 23.5 et seq above.

The two alternative heads of compensation 23.52 not injure the persons entitled’ (paragraph (c)), then prima facie no ‘loss or disadvantage’ will have been suffered ‘in consequence’ of the discharge or modification.80 But a claim for compensation under head (ii) is potentially viable regardless of the paragraph under which the Tribunal exercises its jurisdiction.81 (2) Where the Tribunal acts under paragraph (aa) by reference to section 84(1A)(a), it is sometimes said that the amount of compensation under head (i) will necessarily not be substantial.82 The reasoning is that that paragraph can only be invoked where the restriction ‘does not secure to persons entitled to the benefit of it any practical benefits of substantial value or advantage to them’ so that the compensation under head (i) for the loss of such benefits will itself be of no substantial value.83 However, as the Tribunal pointed out in Re Gaffney’s Application,84 a sum of money may, in absolute terms, be substantial whilst not being substantial in the context of the overall value of the benefited land. In that case, the Tribunal awarded compensation of £1,500 (in 1974) for depreciation and disturbance in respect of a house valued at £45,000 and said: ‘A depreciation of £1,500 in the value of a property worth £5,000 is not to be compared in degree with the same amount payable in the case of a property worth £45,000. In the one case the loss or disadvantage represents 30 per cent of the value of the whole; the value or advantage is clearly substantial. In the other case the proportion is 3.5 per cent; I do not consider that a value or advantage expressed in this way can be said to be substantial.’85 80 In Re Brown’s Application (1977) 35 P&CR 254, the objector claimed that if the restriction were modified so as to allow the proposed development, he would suffer nuisance and annoyance while the works were in progress. The Tribunal nevertheless granted the application under paragraph (c) and concluded: ‘There is no question of compensation’. In Re Briarwood Estates Ltd (1979) 39 P&CR 419, the Tribunal modified a restriction in a long lease pursuant to paragraph (a) but awarded no compensation to the reversioners on the ground that they would not suffer any loss. In Re Chapman’s Application (1980) 42 P&CR 114, the Tribunal permitted the erection of an extra house under paragraph (c) but made no order for the payment of any compensation. In Re Bowden’s Application (1983) 47 P&CR 455, the Tribunal, on making an order under paragraph (c), held that no compensation fell to be awarded under head (i) but awarded £250 under head (ii). In Re Richard’s Application (1983) 47 P&CR 467, at 471 the Tribunal expressed the view that the conditions of paragraph (c) being satisfied (ie that the modification sought would not injure the persons entitled to the benefit of the restriction) ‘no question of compensation arises for loss or disadvantage suffered as indicated in subsection (1)(A)’. In Re Farmiloe’s Application (1983) 48 P&CR 317 the Tribunal modified a restriction under paragraph (c) to permit the erection of a dwelling house and the conversion of a coach house into a separate dwelling and dismissed the objectors’ claims for compensation. In Re Quaffers Ltd’s Application (1988) 56 P&CR 142 (VG Wellings QC), the Tribunal granted the application under paragraph (a) and added that if it were necessary it would also hold that paragraph (c) had been established, but that since neither of the objectors would suffer any detriment to amenity, no award of compensation would be made. 81 Thus, whilst exercising its jurisdication under paragraph (c), the Tribunal awarded compensation under head (ii) in each of the following cases: Re Bowden’s Application (1983) 47 P&CR 455, Re Richard’s Application (1983) 47 P&CR 467, Re Harper’s Application (1986) 52 P&CR 104 and Re Bowden’s Application (1983) 47 P&CR 455. 82 See para 20.80 above. 83 It is otherwise where the Tribunal acts under paragraph (aa)(1A)(b): see, eg SJC Construction Co Ltd v Sutton London Borough Council (1975) 29 P&CR 322. 84 (1974) 35 P&CR 440, at 442 (JH Emlyn Jones FRICS). 85 But in Re Bushell’s Application (1987) 54 P&CR 386 (VG Wellings QC), the Tribunal accepted that a diminution in value of £30,000 which would result (if the application were granted) to a house on the Wimbledon House Estate, was ‘substantial’.

647

23.53  The power of the Upper Tribunal to award compensation

Under head (ii) the question of substantiality is irrelevant since the amount of compensation falls to be measured by reference to the amount by which the original purchase price was reduced by reason of the imposition of the restriction (an amount which could be substantial).86 Similarly, where an application is granted under paragraph (aa)(1A)(b), if the loss or disadvantage suffered is substantial, the compensation may also be substantial. (3) Whilst compensation under head (i) is concerned with compensating the person entitled to the benefited land for the detriment suffered by him in consequence of the discharge or modification, compensation under head (ii) is concerned with clawing back the benefit of the reduced purchase price conferred upon the original purchaser of the burdened land regardless of whether any detriment is in fact suffered by the present owner of the benefited land in consequence of the discharge or modification.87 (4) In the Scottish Land Tribunal case of Manz v Butlers Discretionary Trustees,88 the Tribunal held that: ‘The onus lies upon a benefited proprietor when claiming compensation and here the Superiors have failed to discharge the onus of proving under section 1(4)(ii) that in 1924 the consideration was reduced due to the restrictive obligation’.89 In some cases it may be found that the instrument which imposed the restriction also spells out the amount by which the purchase price was reduced having regard to the imposition of the restriction. In most cases, however, there will be no such indication and the question of whether there was any reduction, and if so of what amount, is a question of fact. 23.53 In Re Cornick’s Application,90 the facts surrounding the imposition of a restrictive covenant in 1988 were able to be fully investigated by reference to the oral testimony of the parties themselves as well as experts and a fairly precise calculation was able to be made. But in other cases resolution of the matter may well be a matter of rough and ready inference.91

86

As in Re New Ideal Homes Ltd’s Application (1978) 36 P&CR 476, where the Tribunal awarded a sum of £51,000 under head (ii) whilst finding that in impeding the proposed development the restriction either did not secure any practical benefits to the objectors or alternatively, if it did, such benefits were not of substantial value or advantage. 87 It is submitted that there is nothing illogical in this. The object of compensation under head (ii) is to require the original covenantor or (as the case may be) his successor (to whom the benefit of the reduced purchase price, in the context of the continued existence of the restriction, has presumably been passed on) to disgorge the discount which he has received attributable to the (now discharged or modified) restriction. See further, footnote 15 above. 88 (1972) 26 P&CR 148, at 154. In all material respects the wording of s 1(4)(ii) of the Conveyancing and Feudal Reform (Scotland) Act 1970 with which the Tribunal was concerned is identical with the wording of s 84(1)(ii) of the Law of Property Act 1925. 89 For the wording of s 1 (4)(ii) of the Conveyancing and Feudal Reform (Scotland) Act 1970, see footnote 105 below. The Tribunal refused to accept as relevant evidence of any reduction in the 1924 purchase price, evidence of the payment which might have been made in 1924 for a waiver of the restrictive obligation. See, further, below. 90 (1994) 68 P&CR 372. 91 As in Re Bowden’s Application (1983) 47 P&CR 455 where the Tribunal made an order under paragraph (c) permitting the erection of a bungalow and inferred that had the restriction (imposed in 1964) permitted two residential units instead of one the sale price would have been £1,250 instead of £1,000, thus assessing compensation under head (ii) at £250. Expert evidence of the difference in value at the time may, of course, be useful. In Re Watson’s Application (1966) 17 P&CR176, at 180, the difference in value was arrived at on the basis of ‘intelligent guesswork’. In Re Graham’s Application (2008) LP/83/2005 there was no evidence

648

The two alternative heads of compensation 23.55 In the Scottish Manz case,92 it was argued that compensation under the Scottish equivalent of head (ii) could be assessed by reference to the sum which would, at the time the restriction (against selling spirit or malt liquors) was imposed in 1924, have been an appropriate payment for lifting it, but this argument was firmly rejected.93 23.54 However, in Re Cornick’s Application,94 where compensation under section 84(1)(ii) was in issue in relation to the modification of a restriction imposed in 1988, the President of the Lands Tribunal in arriving at a figure of £5,000 as representing one half of the development value released from the discharge of the restriction, added: ‘Approaching the matter another way, I think that amount is one which the parties would be likely to have reached themselves in friendly negotiation for a release of the covenant.’95 The wording of this head of compensation (in paragraph (ii)) is to award such sum by way of compensation as is just ‘to make up for any effect which the restriction had, at the time it was imposed’. This is not necessarily the same as just the extra amount by which the price for the property would have been increased at that time, but would permit (and indeed, to give proper compensation, generally require) it to be increased by a factor to allow for inflation. Examples of cases where this has been done include Re Groves’ Application LP/50/1986; Re Dove’s Application LP/28/1990; and Re Davies’ Application (2000) LP/34/1999.96 23.55 It could be argued in an appropriate case that if such a factor is applied, a discount ought to be given in calculating the amount of compensation it is ‘just’ to award (using the words of paragraph (ii)) to reflect the fact that the

led by the objector Council as to any actual reduction made from the sale price of the land by reason of the restriction, but the Tribunal relied on expert evidence as to the added market value the land would have had without the restriction at the time it was sold, based on the hope value the Tribunal considered there would have been at that time, had the covenant not been imposed, for unrestricted residential use being achieved by the grant of planning permission. A 60 per  cent uplift in the sale price (amounting to £23,500) was awarded on this basis. In contrast, in Re Broomheads’ Application (2003) LP/7/2001, it was considered on assessing the facts that even if the restriction had not existed the land would have had no hope value for residential development at the time of sale, so that nothing was awarded. 92 (1972) 26 P&CR 148. 93 The Tribunal, ibid at p 155, said: ‘In our view a calculation based on an appropriate payment in 1924 for lifting the veto cannot be maintained on the wording of section 1(4)(ii)’. The wording of s 1(4)(ii) of the Conveyancing and Feudal Reform (Scotland) Act 1920 is substantially similar to the wording of s 84(1)(ii) of the Law of Property Act 1925 and is as follows: ‘(ii) a sum to make up for any effect which the obligation produced, at the time when it was imposed, in reducing the consideration then paid or made payable for the interest in the land affected by it’. 94 (1994) 68 P&CR 372 (HH Judge Marder QC, President). 95 It is not clear whether the evidence of the released development value (£10,000) related to such value as at the date when the covenant was imposed (1988) or as at the date of the hearing but it may be that there was no valuation difference as between the two dates. However, if the development value (restricted by the covenant) was in fact £10,000 in 1988, it is difficult to see why this was not the sum by which the consideration (paid at that time) was reduced, rather than one half of that sum. It is submitted that there is no warrant in s 84(1)(ii) for treating the assumed reduction in the purchase price attributable to the restriction as falling to be shared between the parties, although, of course, it is within the power of the Tribunal to fix the award at such sum as the Tribunal considers ‘just’. 96 In Re Graham’s Application (2007) LP/83/2005, the Tribunal noted that no submissions had been made nor evidence given about whether the compensation should be adjusted for inflation (between the sale of the land in 2000 and the award in 2007), and in consequence no such adjustment was made.

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23.56  The power of the Upper Tribunal to award compensation owner from time to time of the benefited land has, until the Tribunal’s order, enjoyed the benefit of the restriction.

ORDERS WHERE COMPENSATION IS PAYABLE 23.56 Where the Tribunal orders the discharge or modification of a restriction subject to the payment of compensation, rule 39 of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010,97 as amended, provides that: ‘(a) the discharge or modification shall not take effect until the Tribunal has endorsed on the order that the compensation has been paid; and (b) the Tribunal may direct that the order shall cease to have effect if the compensation is not paid within a specified time.’

97

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SI 2010/2600.

24 Procedure on an application to the Upper Tribunal under section 84(1) of the Law of Property Act 1925

RULES AND PRACTICE DIRECTIONS 24.1 The procedure of the Upper Tribunal (Lands Chamber) is set out in the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010,1 as amended2 (‘the Rules’), and the Lands Chamber of the Upper Tribunal Practice Directions issued on 29 November 2010 (‘the Practice Directions’ or ‘PD’). These are able to be reviewed and amended by the Tribunal Procedure Committee as necessary. 24.2 The Rules contain a number of general provisions which apply to all types of case coming before the Tribunal (Parts 1–4 and 9–11) and in Part 6 set out specific rules relating to applications under section 84(1) of the Law of Property Act 1925 for the discharge or modification of restrictive covenants affecting land. In the Appendices at the back of this book are copies of both the general and specific parts of the Rules applicable to the section 84(1) jurisdiction (Appendix  4), the Practice Directions (Appendix 5), and also the Practice Statements relating to the Composition of the Tribunal (Appendix 2) and to the Delegation of Functions to Staff (Appendix 3). Relevant forms are at Appendix 6.

OVERRIDING OBJECTIVE 24.3 The general rules in Part 1 of the Rules set out the overriding objective, and the parties’ obligation to co-operate with the Tribunal. By rule 2: ‘(1) The overriding objective of these Rules is to enable the Tribunal to deal with cases fairly and justly.

1 2

SI 2010/2600. By the Tribunal Procedure (Amendment) Rules 2012, SI 2012/500, the Tribunal Procedure (Amendment No 3) Rules 2013, SI 2013/1188, and the Tribunal Procedure (Amendment) Rules 2014, SI 2014/514.

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24.4  Procedure on application to UT under LPA 1925, s 84(1) (2) Dealing with a case fairly and justly includes— (a) dealing with the case in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties; (b) avoiding unnecessary formality and seeking flexibility in the proceedings; (c) ensuring, so far as practicable, that the parties are able to participate fully in the proceedings; (d) using any special expertise of the Tribunal effectively; and (e) avoiding delay, so far as compatible with proper consideration of the issues. (3) The Tribunal must seek to give effect to the overriding objective when it— (a) exercises any power under these Rules; or (b) interprets any rule or practice direction. (4) Parties must— (a) help the Tribunal to further the overriding objective; and (b) co-operate with the Tribunal generally’.

DELIVERY AND SERVICE OF DOCUMENTS 24.4

By rule 13:

‘(1) Any document to be provided to the Tribunal under these Rules, a practice direction or a direction must be— (a) sent by pre-paid post or by document exchange, or delivered by hand, to the address of the office of the Tribunal3; (b) sent by fax to the fax number of the office of the Tribunal; or (c) sent or delivered by such other method as the Tribunal may permit or direct. (2) Subject to paragraph (3), if a party provides a fax number, email address or other details for the electronic transmission of documents to them, that party must accept delivery of documents by the relevant method. (3) If a party informs the Tribunal and all other parties that a particular form of communication, other than pre-paid post or delivery by hand, should not be used to provide documents to that party, that form of communication must not be so used. (4) If the Tribunal or a party sends a document to a party or the Tribunal by email or any other electronic means of communication, the recipient may request that the sender provide a hard copy of the document to the recipient. The recipient must make such a request as soon as reasonably practicable after receiving the document electronically.

3

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And by s 7 of the Interpretation Act 1978 such service is deemed to be effected, unless the contrary is proved, at the time at which the letter would be delivered in the ordinary course of of post.

The primary documents involved in proceedings under s 84(1) 24.8 (5) The Tribunal and each party may assume that the address provided by a party or its representative is and remains the address to which documents should be sent or delivered until it receives written notification to the contrary.’ 24.5 By rule 14, the Tribunal may waive a requirement for service of a document on a person, or provide an alternative method for service (by advertisement in a newspaper or some other means) if one of the following applies: (a) if that person cannot be found after all diligent enquiries have been made; (b) if that person has died and has no personal representative; or (c) if for any other reason a notice or other document cannot readily be sent or delivered to that person in accordance with the Rules. Any application for waiver or for an alternative method of service pursuant to the rule must be made as set out (in relation to all applications) in rule 6.4 The Registrar has power to make such an order.5

COMPETENT APPLICANTS UNDER SECTION 84(1) 24.6 An application under section 84(1) can only be made by a ‘person interested in the freehold land affected by a restriction’ (as stated in section 84(1)), but it may be made jointly by two or more persons if the land in which they are interested is the same land or different parts of the land affected by the restriction’ (rule 32(3)). If an applicant is clearly not a person so interested to make the application, the Tribunal may strike out the application under its general powers of strike out contained in rule 8 or, if less clear, it may at an appropriate time (which will generally be after any notice of objection has been filed, in order to enable objectors to be heard) hold a preliminary hearing under rule 7 to determine this.6 24.7 Where separate applications are made in respect of the same land or raise common issues, the Tribunal may order that the applications be consolidated or heard together, or treat one case as a lead case, under rule 5(3)(b).

THE THREE PRIMARY DOCUMENTS INVOLVED IN PROCEEDINGS UNDER SECTION 84(1) 24.8

These documents comprise:

(i) the ‘application’ (dealt with by rule 32) (ii) notices for giving notice of the application to persons appearing to be entitled to the benefit of the restriction (rule 33); and (iii) the notice of objection for opposing the application (rule 34).

4 5 6

As to which, see para 24.58 et seq below. Practice Statement ‘Delegation of Functions to Staff on or after 29 November 2010’, dated 29 November 2010, para 1f (reproduced in Appendix 3 below). As to preliminary hearings, see para 24.130 below.

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24.9  Procedure on application to UT under LPA 1925, s 84(1)

(i) The application and the documents required to accompany it Form and contents of the application 24.9 There is no statutory form of application under section 84(1) as such, but Upper Tribunal Form T3797 should be used. Rule 32(1) requires an application to be signed and dated, and specifies ten matters which every application must contain. These requirements, all of which are covered in Form T379, are as follows: (a) the name and address of the person making the application and, if he is represented: (i) the name and address of the applicant’s representative; and (ii) the professional capacity, if any, in which the applicant’s representative acts; (b) an address where documents for the applicant may be sent or delivered; (c) the address or description of the application land; (d) nature of the applicant’s interest in the application land; (e) the name of any other person with an interest in the application land and the nature of that interest; (f) the address or description of the land which is subject to the restriction; (g) the address or description of the land which, and the identity of any person (if known) who has the benefit of the restriction, or any person who the applicant believes may have such benefit and the reasons for that belief; (h) the ground or grounds in section 84 on which the applicant relies and the reasons for considering that that ground or those grounds apply; (i) whether the applicant is applying to discharge or modify the restriction, in which case details of the discharge or modification sought must also be provided; (j) details of any planning permission I respect of the application land that has been applied for, granted or refused within the five years preceding the application’.8 The application and is made by sending or delivering it to the Tribunal.9

7 8

9

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Reproduced in Appendix 6 below. As indicated in the relevant chapters above, detailed planning permission will generally in practice be necessary (under grounds (aa) and (c) at least) in order for an application to be properly determined and granted, or at the very least outline planning permission and detailed plans of what is proposed to be done under it. An applicant seeking modification to the extent of allowing a specific development to take place, will need to provide plans and/or othr details showing what is sought with the application, as that is part of it. Where planning permission is not required, it will obviously still be necessary to show by some means exactly what is intended to be done. The offices of the Tribunal are at the 5th Floor, Rolls Building, 7 Rolls Buildings, Fetter Lane, London, EC4A 1NL.

The primary documents involved in proceedings under s 84(1) 24.13

Documents required to accompany the application 24.10

By rule 32(2) the application must be accompanied by:

(a) a copy of the instrument imposing the restriction and any attached plan coloured in accordance with the original or, if the instrument cannot be found, other documentary evidence of the restriction; (b) a plan identifying: (i) the application land; (ii) if ascertainable, any additional land which is subject to the restriction; and (iii) the land which has the benefit of the restriction; and (c) the fee payable to the Tribunal. Again, provision for these is made in Form T379, which specifies the documents that must accompany it.

(ii) Notices giving notice of the application to persons appearing to be entitled to the benefit of the restriction 24.11

Upon receipt of the application the Tribunal must, by rule 33(1):

‘send written directions to the applicant specifying— (a) what notices are to be given to persons who appear to be entitled to the benefit of the restriction; (b) the time within which such notices are to be given; and (c) whether such notices should be given by advertisement or otherwise.’ 24.12

By rule 33(2):

‘The notices must require any person who claims to be entitled to the benefit of the restriction, who objects to the discharge or modification of it proposed by the application, or who claims compensation for such modification or discharge, to send to the Tribunal and to the applicant notice of any objections they may have and of the amount of compensation they claim, if any.’ 24.13

By rule 33(3):

‘The notices to be given under paragraph (1) must be given by the applicant who, as soon as reasonably practicable after the end of the period for sending or delivering a notice of objection in rule 34(1) (notice of objection), must certify in writing to the Tribunal that directions as to the giving of those notices have been complied with.’10 Directions as to the notices to be given will generally be given by the Registrar,11 with notices usually being required to be sent to all persons identified

10 All costs incurred by the applicant up to and including the certificate of compliance will generally fall outside the scope of any order for costs which may eventually be made in favour of the applicant. 11 Under the power given to him by the Practice Statement ‘Delegation of Functions to Staff on or after 29 November 2010’, dated 29 November 2010, para 1m.

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24.14  Procedure on application to UT under LPA 1925, s 84(1) in the application as potentially having the benefit of the restriction in question, with advertisement to take place in the case of others. 24.14 The Tribunal has a standard form of publicity notice (Form T380) and a standard for certificate of compliance (Form T382).12 24.15 Rule 37 provides that if at any time before the determination of the application it appears to the Tribunal that any person who has not received notice of the application otherwise than by advertisement should have received specific notice, the Tribunal may require the applicant to give notice to that person and give such case management directions in relation to this as may be appropriate. The existence of this power and the delay and inconvenience its exercise would be likely to cause, emphasises the importance of the applicant of identifying relevant persons, and anticipating, where likely, the existence of mortgagees when giving particulars in his application of the identity of the persons whom he believes may have the benefit of the covenant in question. 24.16 It is also to be noted that rule 38 provides that if before or at the hearing of an application the Tribunal considers that enquiries should be made at any local authority within whose area the land affected by the restriction is situated, the Tribunal may direct those enquiries to be made and give such case management directions as may be appropriate.

(iii)  Objection to an application Time for objecting 24.17 By rule 34(1), a notice of objection must be sent to the Tribunal within one month from the giving of the notice referred to at (ii) above. Time is calculated as set out in rule 12 (as in all other cases) – if the time specified ends on a day other than a working day (ie on a Saturday or Sunday, Christmas Day, Good Friday, or a bank holiday), the act is done in time if it is done on the next working day. 24.18 A person out of time for objecting may seek an extension of time under rule 5(3)(a), which gives the Tribunal a general power to ‘extend or shorten the time for complying with any rule or practice direction and order an extension even if the application for an extension is not made until after the time limit has expired’. Any such application would be determined having regard to the overriding objective. Due weight will be given to the need for discipline in compliance with the rules but, whilst all the circumstances would need to be considered, in the absence of specific prejudice to the applicant which could not be overcome or any form of abuse (such as deliberate lateness), such an application would be likely to be granted. That would obviously be particularly so if some good reason for the late objection could be advanced (such as the notice under (ii)  not having come to the objector’s attention to enable the objection to be lodged earlier). This is particularly so given the nature of any order made under section 84(1), which operates in rem by reason of section 84(5). 12

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Both of which are reproduced in Appendix 6 below.

The primary documents involved in proceedings under s 84(1) 24.22

Notice of objection 24.19 Again, there is no statutory form of notice, but rule 34(1) requires any notice of objection and any claim for compensation to be in writing, and Upper Tribunal Form T38113 should be used. Rule 34(2) provides that: ‘The notice of objection must be signed and dated and must state— (a) the name and address of the objector and, if represented,— (i) the name and address of the objector’s representative; and (ii) the professional capacity, if any, in which the objector’s representative acts; (b) an address where documents for the objector may be sent or delivered; (c) the basis upon which the objector claims to be entitled to the benefit of the restriction; (d) any ground of objection; and (e) whether the objector wants the case to be determined at a hearing.’ Again, these are covered by the Upper Tribunal Form, T381.

Claim to entitlement to the benefit of the restriction 24.20 If the objector is an original covenantee, it will be sufficient to refer to the instrument on which he relies. If his claim is based on annexation by the original words of covenant, then a claim to be entitled by virtue of being the owner of an interest in a specific property to which the benefit of the restriction was annexed would be sufficient. If he relies on an unbroken chain of assignments, then in addition to referring to the instrument imposing the restriction, the objector should plead the documents and events relied upon as establishing such chain. If he relies on the existence of a building scheme, he should plead the existence of a building scheme and the facts and matters giving rise to it and that he owns an interest in land forming part of the scheme land. 24.21 If the objector omits to give sufficient particulars of the basis of his claim to be entitled to the benefit of the restriction the objector risks the applicant putting his entitlement in issue for that reason (as to which, see below).

Grounds of objection 24.22 Particulars of the grounds of objection should be prepared under two headings: (1) first, those aimed at the grounds relied on by the applicant; and (2) second, those (if any) directed towards showing that, in any event, the Tribunal should not exercise its discretion in favour of the applicant. 13

Reproduced in Appendix 6.

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24.23  Procedure on application to UT under LPA 1925, s 84(1) 24.23

These particulars will therefore:

(i) admit such facts set out in the application as are not contested. If facts are not admitted at an appropriate time but are not disputed at the hearing and in consequence of their non-admission the applicant incurs costs in preparing to prove them at the hearing, then the objector may be at risk in respect of the costs unnecessarily incurred; (ii) set out the particular element(s) of each of the applicant’s grounds as the objector wishes to contest.14 For example, where the applicant relies on ground (aa) of section 84(1), the objector might specify that whilst he considers the applicant’s proposed user is not unreasonable, the continued existence of the restriction secures practical benefits of substantial value or advantage to the objector. (iii) set up any contention that the Tribunal should exercise its discretion in its favour.

Claim for compensation 24.24 The rule makes no mention of any need to supply particulars as to the amount of any claim for compensation, but the standard Upper Tribunal form of objection (Form T381) provides for the approximate amount of compensation claimed to be stated, though this is expressly stated not to be binding. This may, for example, be helpful in relation to the potential for negotiations.

Other interested parties 24.25 It should be noted that if the objector’s property is mortgaged, it may, under the terms of the mortgage, be incumbent on the objector to inform the mortgagee of the application. In many cases, the mortgagee of such a person will also be entitled to the benefit of the restriction and so entitled to object as such mortgagee. There is, however, no specific provision in the Rules requiring an objector to notify the applicant or the Tribunal of any mortgagee’s potential interest in the application. As mentioned above, however, the Tribunal has15 power at any time before making its determination to require notice to be given to any person who has not received specific notice whom it believes should have received such notice.

Position if there is no response to the notices 24.26 Where no notice of objection is received in the time allowed or all objectors have withdrawn their objections, rule 17.2 of the former procedure

14 Thus narrowing the points in contention, eg in answer to the applicant’s reliance on ground (aa), that while the applicant’s proposed user is considered not unreasonable, the continued existence of the restriction does secure practical benefits of substantial value or advantage to the objector. 15 Under rule 37.

658

The primary documents involved in proceedings under s 84(1) 24.29 rules16 previously expressly that the President ‘may, with the consent of the applicant, determine the application without a hearing’. 24.27 The position now is that PD paragraph 3.5(1) simply provides in general terms that: ‘The Tribunal may order that the proceedings be determined without an oral hearing. An order for the written representation procedure to be followed will only be made if the Tribunal, having regard to the issues in the case and the desirability of minimising costs, is of the view that oral evidence and argument can properly be dispensed with. The consent of the parties will usually be required.’ Where there is no live objector, the Tribunal could use this procedure (and the applicant could invite it to do so). 24.28 A lack of any objections creates a presumption that the persons entitled to the benefit of the restrictions do not consider that they secure practical benefits of substantial value or advantage to them under ground (aa) of section 84(1): Re Dartmouths’ Application.17 In that case, the Tribunal said, at para 52: ‘The practical benefits … must be of substantial value or advantage to defeat an application under ground (aa). I have already found above that there is no evidence upon which to conclude that there are any benefits of substantial value. I place considerable weight upon the absence of any outstanding objections to the application for the discharge or modification of the restrictions in the 1954 conveyance. It is clear from the correspondence to which I have referred above that some of the persons entitled to the benefit of those restrictions, and especially Mr Lincoln in the adjoining property, were opposed to the application. But, and for whatever reason, they chose not to object. They had the opportunity to do so and had been formally notified of the application. I have therefore received no evidence about the substantiality of the practical benefits in terms of the advantage which is secured to such persons by the restrictions. The applicants have gone no further than to submit that the restrictions do not secure any (or, at most, nominal) practical benefits to the persons entitled to the benefit of them. A lack of any objections creates a presumption that the persons entitled to the benefit of the restrictions do not consider that they secure practical benefits of substantial value or advantage to them. In the absence of any evidence to the contrary I so conclude in this case with respect to all such persons.’ 24.29 However, if there is positive evidence that a person might have failed to object for some other reason, their failure to object may not be sufficient. Thus, in the case of one potential objector in Re Dartmouths’ Application, the Tribunal said:18 ‘Although it is not known why Mr Lincoln did not object to the application it  is clear from the documents submitted with the application that there was a  threat of litigation against him had he done so … Under these

16 The Lands Tribunal Rules 1996; prior to which, a similar rule was contained in the Lands Tribunal Rules 1975, SI 1996/1022. 17 (2006) LP/64/2004 (LC), at para 52. 18 Ibid, at para 53.

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24.30  Procedure on application to UT under LPA 1925, s 84(1) circumstances I might have found that his failure to object did not necessarily imply acceptance by him that any practical benefits secured by the restrictions in the 1954 conveyance were not of substantial advantage to him.’ As there was in that case a document in evidence signed by him stating that he was content with the proposal, the Tribunal was satisfied, though. 24.30 Where the application is made on ground (c), however, a person may not object to a particular proposal even though he considers he will suffer harm, because he may consider that such harm is not sufficiently substantial to warrant doing so, or, in the terminology of section 84 that it does not secure to him practical benefits of substantial value or advantage to him. That it would satisfy ground (aa) but it cannot be assumed that it satisfies ground (c). Thus, in Re Dartmouths’ Application, the Tribunal was not satisfied that the proposed modification of the restrictions would not injure the non-objecting Mr Lincoln or that ground (c) (unlike ground (aa)) had been established, even though he appeared content with what was proposed. 24.31 Further, it is not to be assumed that because no-one objects the Tribunal must necessarily make an order in the terms sought by the applicant. It still has to be satisfied that such an order is appropriate, and in doing this the practical situation and the realities of why no-one has objected can (and ought to) be taken into account. Indeed, it still retains, and is under a duty to exercise, its statutory discretion whether to grant an order at all (though doubtless it would generally consider it right to do so). 24.32 In Re University of Westminster’s Application19 the President of the Tribunal said: ‘… there is nothing in the statutory provisions to indicate that the Tribunal’s discretion is limited or (as the applicants would appear to suggest) abrogated, by reason of the fact that the application is unopposed. Doubtless the information available to the Tribunal in the case of an unopposed application is likely to be less than in a case fought out at a hearing, but the Tribunal is still under a duty to exercise its discretion to grant or refuse a discharge or modification in whole or in part in the light of known relevant circumstances.’ The case subsequently went to the Court of Appeal,20 but nothing said there casts doubt upon this statement of principle.

ADMISSION OF OBJECTORS 24.33

Rule 35 provides that:

‘(1) Within 14 days of receipt of a notice of objection, if the applicant does not accept that the objector is entitled to the benefit of the restriction, the applicant must send or deliver to the Tribunal and the objector a notice stating why the applicant does not accept that the objector is entitled to the benefit of the restriction.

19 20

660

(1997) 74 P&CR 86, at p 91 (HH Judge Marder QC). (1999) 78 P&CR 82.

Admission of objectors 24.34 (2) Any objector to whom the applicant does not send or deliver a notice under paragraph (1) shall be admitted to oppose the application. (3) An objector who receives a notice from the applicant under paragraph (1) must within 14 days send or deliver to the Tribunal and the applicant evidence of their entitlement to the benefit of the restriction. (4) Within 14 days of receipt of evidence under paragraph (3) the applicant must inform the Tribunal and the objector whether the applicant accepts that the objector is entitled to the benefit of the restriction. (5) As soon as practical after receipt of a notice under paragraph (4) that the applicant does not accept the evidence of entitlement, but after giving to the applicant and the objector the opportunity to be heard, the Tribunal must determine whether the objector should be admitted to oppose the application and notify the applicant and the objector of its determination. (6) Where an objector who has not been admitted to oppose the application is dissatisfied with the determination of the Tribunal under paragraph  (5) and notifies the Tribunal within 14 days of the date of that determination that the objector has applied to the court under subsection  (2) of section  84 to declare who, if anyone, is entitled to enforce the restriction, the Tribunal must stay the proceedings until that application is determined or withdrawn. (7) Following any declaration made by the court as to who, if anyone, is entitled to enforce the restriction, the Tribunal may set aside a determination made under paragraph (5) and make a new determination.’ This rule is made pursuant to section 84(3A) of the 1925 Act.21 24.34 It may seem somewhat odd that the procedure should be (under paragraph (6)) for the objector who is dissatisfied with the Tribunal’s decision that he is not a person who is entitled to object, to bring separate proceedings for a declaration as to his entitlement to do so, rather than there being provided simply a right of appeal from the Tribunal’s decision on the point (which is specifically excluded by section 84(3A)). However, section 84(2) expressly provides that the court shall have power to declare by whom a restrictive covenant is, or would in any given event be, enforceable, in contrast to the substantive jurisdiction of the tribunal which is to determine whether restrictions should be discharged or modified rather than to make declarations as to the persons who have the benefit of them. Although rule 35 provides for the question of the entitlement of an objector to the benefit of a restriction to be determined by the Tribunal on a procedural basis (ie for the purposes of whether his objection should be heard and whether

21 Which, as amended, provides that ‘On an application to the Upper Tribunal under this section the Upper Tribunal shall give any necessary directions as to the persons who are or are not to be admitted (as appearing to be entitled to the benefit of the restriction) to oppose the application, and no appeal shall lie against any such direction; but [Tribunal Procedure Rules] shall make provision whereby, in cases in which there arises on such an application (whether or not in connection with the admission of persons to oppose) any such question as is referred to in subsection (2)(a) or (b) of this section, the proceedings on the application can and, if the rules so provide, shall be suspended to enable the decision of the court to be obtained on that question by an application under that subsection, or otherwise, as may be provided by those rules or by rules of court’.

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24.35  Procedure on application to UT under LPA 1925, s 84(1) he should be entitled to participate in the proceedings), the only jurisdiction to make a definitive determination of whether someone does or does not have the benefit of a restrictive covenant by way of declaration is that of the court, under section 84(2).22 This is largely for historic reasons, the members of the former Lands Tribunal having largely comprised surveyors rather than experienced lawyers.23 However, this does provide a mechanism for an aggrieved objector to effectively appeal, by having a, substantive, determination as to whether he has the benefit of the restriction, made by the court. 24.35 It is significantly different from an appeal, however; not just procedurally, but in other respects. First, an appeal court does not generally have greater powers than the court from which the appeal is being made in that under section 84(2) the court will make a binding declaration, which the Tribunal does not itself have power to do. Second, and of more practical importance, is the fact that since this involves a separate, substantive, determination by the court as to rights to the benefit of a covenant, it is not limited to a review of the Tribunal’s decision. To determine whether there was an error of law made by it on the material before it (as would generally be the case on an appeal), the objector is unlikely to be prevented from calling new or further evidence (as he would be, subject to certain exceptions, on an appeal), and the court will have to make its own decision as to whether or not he is a person with an entitlement to the benefit of the restriction in question. 24.36 The rule does not make any provision for what is to happen if the objector is admitted and the applicant is dissatisfied and wishes to seek the determination of the court under section 84(2). Nor does it make any provision for what is to happen if either or both of the parties wish for the question of whether the objector has the benefit of the covenant to be directly determined by the court under section 84(2) straight away, rather than being in the first instance determined procedurally by the Tribunal. However, rule 5(3)(k) gives the Tribunal a general power to stay proceedings before it, and this could be used to allow the matter to be stayed pending such an application to the court as a matter of discretion, though only in the case of a dissatisfied would-be objector is there an automatic right to this under the rules.24 24.37 A decision by the Tribunal to admit an objector as having the ability to enforce a covenant is purely a procedural decision for the purpose of the proceedings before it, and does not create any cause of action or issue estoppel. Notwithstanding such decision, it may therefore subsequently be alleged on an application to the High Court for a declaration under section 84(2) of the Law of Property Act 1925 that no-one is entitled to enforce the covenant, as the substantive determination of such matters is vested solely in the court: Doberman v Watson.25 22 As confirmed by Doberman v Watson (below, para 24.37). 23 Since the enactment of s 6 of the Tribunals, Courts and Enforcement Act 2007, all judges, are able to act as judges of the Upper Tribunal, and a number of the judges who are so assigned (or could be assigned on an ad hoc basis to determine such questions) are deputy High Court judges. 24 Arising out of the provision in rule 35 that the court must stay the proceedings in such circumstances. 25 [2017] 4 WLR 103.

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Statements of case 24.41

REPRESENTATIVES 24.38 Under the previous rules any party to proceedings could appear in person or through counsel or a solicitor but representation by anyone else required the permission of the Tribunal. However, under the present rules there is no such restriction. 24.39 Rule 11 requires a party who is represented to also serve each other party to the proceedings with that party’s name and address (or, where the representative is a legal representative, requires that representative to do so), and provides that: ‘(4) A person who receives notice of the appointment of a representative— (a) must provide to the representative any document which is required to be provided to the represented party, and need not provide that document to the represented party; and (b) may assume that the representative is and remains authorised as such until they receive written notification that this is not so from the representative or the represented party.’ By rule 11(3), anything permitted or required to be done by a party under the Rules, a practice direction or a direction of the Tribunal may be done by the representative of that party, except signing a witness statement.

STATEMENTS OF CASE 24.40

Rule 36 provides that:

‘If an objector has been admitted to oppose the application, the Tribunal must direct either— (a) that the applicant and each objector, within such periods as are stated in the direction, send or deliver to the Tribunal and each other party a statement of case; or (b) that the application and each notice of objection shall stand as the statement of case of the party that made the application or gave such notice.’ 24.41 The standard form of application (Form T379) requires the applicant to attach to it a statement of case setting out details and evidence of the facts relied upon to establish each of the grounds under section 84(1) on which the applicant seeks the discharge or modification of the restriction(s) and the reasons for considering that that ground or those grounds apply. The form notes that relevant particulars will include some or all of the following: ●● ●●

In the case of ground (a): changes in the character of the property; changes in the character of the neighbourhood; other circumstances by reason of which the restriction ought to be deemed obsolete. In the case of ground (aa): the reasonable user that is impeded by the restriction; the relevant provisions of the development plan; a current planning permission; planning permissions or refusals of planning permission showing a pattern for the relevant area; the period at which and 663

24.42  Procedure on application to UT under LPA 1925, s 84(1) the context in which the restriction was imposed; other circumstances; if money is said to be adequate compensation. In the case of ground (b): express agreements to discharge; acts or omissions that imply agreement to discharge or modification. In the case of ground (c): any matters relied on as showing that there would be no injury.

●● ●●

Setting out the case in the application in some detail is likely to save time. 24.42 A notice of objection is only required by rule 34 to give very basic details of the objection (and the approximate amount of any compensation sought), and the standard form only requires brief details to be given. More detail will be required in the statement of case. 24.43

By PD paragraph 6.1(2):

‘The purpose of statements of case is to enable the issues to be determined by the Tribunal to be identified. Each statement of case must therefore set out the basis of fact and of law on which the party relies. It must be in summary form but contain particulars that are sufficient to tell the other party the case that is being advanced and to enable the Tribunal to identify the issues.’

STAYING THE PROCEEDINGS FOR ALTERNATIVE DISPUTE RESOLUTION 24.44

Paragraph 2.1 of the PD provides that:

‘(1) Parties may apply at any time for a short stay in the proceedings to attempt to resolve their differences, in whole or in part, outside the Tribunal process. No fee is payable. On receipt of a joint or consent application made in accordance with rule 6 the Tribunal will by order stay proceedings for a six-week period (or such other period as may be specified in the order) for mediation or other form of alternative dispute resolution, ADR, procedure to be followed. (2) The parties may apply for a second or longer stay in the proceedings for ADR. The fee for an interlocutory application must be paid and the parties must satisfy the Tribunal that an additional or longer stay of proceedings would be appropriate.’ 24.45 When, following a hearing, costs come to be considered, paragraph 2.2 of the PD warns that: ‘In exercising its power to order that any or all of the costs of any proceedings incurred by one party be paid by another party or by their legal or other representative the Tribunal may consider whether a party has unreasonably refused to consider ADR when deciding what costs order to make, even when the refusing party is otherwise successful.’

DETERMINATION OF A PRELIMINARY ISSUE 24.46 The general rule contained in rule 5.3 provides that the Tribunal may deal with any issue in the proceedings ‘as a separate or preliminary issue’. 664

Determination of a preliminary issue 24.48 Under PD paragraph 3.4(2)26 each party is under a duty to consider whether it is appropriate to make application for the determination of a preliminary issue. 24.47

By PD paragraph 7:

‘(1) On the application of any party to proceedings or on its own initiative the Tribunal may order any preliminary issue in the proceedings to be disposed of at a preliminary hearing where such issue is properly severable from other issues in the proceedings and where its determination might effectively dispose of the whole case or reduce the issues in the case, thereby saving costs and avoiding delay. (2) An application by a party for the determination of a preliminary issue should set out with precision the point of law or other issue or issues to be decided. It should where appropriate be accompanied by a statement of agreed facts, and it should state whether in the view of the party making the application the issue can be decided on the basis of the statement of agreed facts or whether evidence will be required. If evidence is said to be needed the application should state what matters that evidence would cover. The application should state why, in the applicant’s view, determination of the issue as a preliminary issue would be likely to enable the proceedings to be disposed of more expeditiously and/or at less expense.’ If the Tribunal decides to order that the issue should be determined as a preliminary issue it will give such directions as to the filing of any experts’ reports, witness statements, documentary evidence and statement of agreed facts as are necessary. 24.48 Examples of points of law suitable for a determination as a preliminary issue are whether a covenant is a positive or a restrictive covenant,27 whether the applicant has a sufficient interest to qualify him as a ‘person interested in any freehold land’ within the meaning of section 84(1);28 the construction of the phrase ‘the Vendor’ in a conveyance;29 and whether an application should be struck out as an abuse of process.30 Examples of issues of fact that may be suitable include the question of whether a building scheme exists (which may turn exclusively on questions of fact or partly on questions of law and fact);31 whether a disposition was made gratuitously (so that an application under section 84(1) cannot be made);32 and whether there have been changes in the character of the property or the neighbourhood.33 In relation to costs, see paras 24.130–24.132 below.

26 Set out below. 27 As in Re Abbey Homesteads (Developments) Ltd’s Application (1984) 49 P&CR 263 (where the Tribunal’s decision that a covenant was positive and that it therefore had no jurisdiction was reversed on appeal). 28 As to which, see para 16.5 above. 29 Re Derreb Ltd’s Application [2015] UKUT 667 (LC). 30 See, eg Re Thames Valley Holdings Ltd’s Application [2011] UKUT 325 (LC). 31 See Chapter 8. But the existence or otherwise of a building scheme will usually fall to be dealt with under the procedure provided for by s 84(3A) of the Law of Property Act 1925. 32 Ibid, s 84(7) (as referred to at para 16.47 above), see, eg Re Robins’ Application (2005) LP/17/2004. 33 As to which, see Chapter 19.

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24.49  Procedure on application to UT under LPA 1925, s 84(1)

CASE MANAGEMENT 24.49 Each case is34 assigned by the Tribunal to one of the following procedures: ●● ●● ●● ●●

the standard procedure; the simplified procedure; the special procedure; the written representations procedure.

The standard procedure 24.50

By PD paragraph 3.2:

‘The standard procedure applies in all cases not assigned to one of the other procedures. For the standard procedure case management will be in the hands of the Registrars who will give such directions as appear to be necessary. Directions given may, as appropriate, use elements of the special procedure (for example, timetabling through to the hearing date) or the simplified procedure. A Registrar will hold a case- management hearing should it appear appropriate to do so taking any views expressed by the parties into account. Each party should also consider the matters referred to in paragraph 3.4(2) below.’ 24.51

Paragraph 3.4(2) provides that:

‘Each party should consider whether it is appropriate to make application for the determination of a preliminary issue and for permission to call more than the permitted number of expert witnesses. It should also identify, and where necessary make application for, any other order that it wishes the Tribunal to make at the case-management hearing. The parties must seek to agree the terms of any order that they wish the Tribunal to make.’

The simplified procedure 24.52 In so far as relevant to section 84(1) cases, PD paragraph 3.3 provides as follows: ‘(1) The simplified procedure provides for the speedy and economical determination of cases in which no substantial issue of law or of valuation practice or conflict of fact is likely to arise. It is often suitable where the amount at stake is small. It will not normally be appropriate for cases involving more than one expert witness. (2) The objective is to move to a hearing as quickly as possible and with the minimum of formality and cost. In most cases a date for the hearing, normally about 3 months ahead, will be fixed immediately. Statements of case will be required in accordance with section 6 below. The hearing will be informal and strict rules of evidence will not apply. It will almost always be completed in a single day. 34

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As referred to in PD paragraph 3.1.

Case management 24.55 (3) Not later than 1 month before the hearing, the parties must exchange copies of all documents on which they intend to rely. Not later than 14 days before the hearing each party must file and exchange— (i) an expert’s report, if they intend to rely on expert evidence; and (ii) a list of the witnesses they intend to call at the hearing.’ 24.53 Cases assigned to the ‘simplified procedure’ list will be heard by a single member. As provided by PD paragraph 3.3(2) above, the procedure at the hearing will be ‘informal’ and the strict rules of evidence will not apply. Accordingly, it may be easier for non-lawyers to conduct such cases.

The special procedure 24.54

By PD paragraph 3.4:

‘(1) A case will be assigned to the special procedure if it requires case management by a Judge or Member in view of its complexity, the amount in issue or its wider importance. Under the special procedure an early casemanagement hearing will be held for appropriate directions to be given for the fair, expeditious and economical conduct of the proceedings. Where appropriate a date for the final hearing will be fixed at the case-management hearing and the steps which the parties are required to take, and any further case-management hearings, will be timetabled by reference to this date. (2) Each party should consider whether it is appropriate to make application for the determination of a preliminary issue and for permission to call more than the permitted number of expert witnesses. It should also identify, and where necessary make application for, any other order that it wishes the Tribunal to make at the case-management hearing. The parties must seek to agree the terms of any order that they wish the Tribunal to make. (3) Not less than 7 days before a case-management hearing the parties must file an agreed position statement summarising the subject-matter of the case and, to the extent that it is possible to do so at that stage, the issues. They must also state the areas of expertise of each expert witness that they propose to rely on and the general scope of their evidence.’

Written representation procedure 24.55

By PD paragraph 3.5:

‘(1) The Tribunal may order that the proceedings be determined without an oral hearing. An order for the written representation procedure to be followed will only be made if the Tribunal, having regard to the issues in the case and the desirability of minimising costs, is of the view that oral evidence and argument can properly be dispensed with. The consent of the parties will usually be required. (2) Directions will be given to the parties relating to the filing of representations and documents and, if necessary, the Judge or Member allocated to the case will seek to carry out a site inspection before giving a written decision.35 35

This will generally be done in practice, unless it is clear that it is unnecessary.

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24.56  Procedure on application to UT under LPA 1925, s 84(1) (3) Costs will only be awarded if there has been an unreasonable failure on the part of the claimant to accept an offer to settle, if either party has behaved otherwise unreasonably, or the circumstances are in some other respect exceptional.’

Case management powers 24.56 The Tribunal has a general power (in rule 5(1)) to regulate its own procedure, and in particular a wide range of case management powers are set out in rule 5(3). These powers are36 that it may: ‘(a) extend or shorten the time for complying with any rule or practice direction and order an extension even if the application for an extension is not made until after the time limit has expired; (b) consolidate or hear together two or more sets of proceedings or parts of proceedings raising common issues, or treat a case as a lead case; (c) permit or require a party to amend a document; (d) permit or require a party or another person to provide documents, information, evidence or submissions to the Tribunal or a party; (e) deal with an issue in the proceedings as a separate or preliminary issue; (f) hold a hearing to consider any matter, including a case management issue; (g) decide the form of any hearing; (h) adjourn or postpone a hearing; (i) require a party to produce a bundle for a hearing; (j) stay proceedings; (k) transfer proceedings to another court or tribunal if that other court or tribunal has jurisdiction in relation to the proceedings and— (i) because of a change of circumstances since the proceedings were started, the Tribunal no longer has jurisdiction in relation to the proceedings; or (ii) the Tribunal considers that the other court or tribunal is a more appropriate forum for the determination of the case; (l) suspend the effect of its own decision pending an appeal or review of that decision; (m) in an appeal, or an application for permission to appeal, against the decision of another tribunal, suspend the effect of that decision pending the determination of the application for permission to appeal, and any appeal …’ 24.57 All these powers, other than those under (l) and (m), may be exercised by the Registrar: see the ‘Practice Statement: Delegation of Functions to Staff on or after 29 November 2010’.37 Paragraph 2 of the Practice Statement and rule 4(3) mean that within 14 days after the date that the Tribunal sends notice of a decision made by a Registrar to 36 37

668

Excluding item (n), which is not relevant to s 84(1) cases. Issued on 29 November 2010 (reproduced in Appendix 3 below).

Procedural applications 24.61 a party, that party may apply in writing for the decision to be considered afresh by a judge.

PROCEDURAL APPLICATIONS 24.58 Procedural applications are governed by rule 6. This provides that the Tribunal may give a direction on the application of one or more of the parties or on its own initiative. 24.59 PD paragraph 3.4(2) (which, although under the heading ‘Special Procedure’, is by paragraph 3.2 relevant also to cases proceeding under the standard procedure) requires that: ‘Each party should consider whether it is appropriate to make application for the determination of a preliminary issue and for permission to call more than the permitted number of expert witnesses. It should also identify, and where necessary make application for, any other order that it wishes the Tribunal to make at the case-management hearing. The parties must seek to agree the terms of any order that they wish the Tribunal to make.’ 24.60

Rule 6 provides that:

‘(2) An application for a direction may be made— (a) by sending or delivering a written application to the Tribunal; or (b) orally during the course of a hearing. (3) An application for a direction must include the reason for making that application. (4) If a written application for a direction is made with the consent of every party, it must be accompanied by consents signed by or on behalf of each party. (5) If a written application for a direction is not made with the consent of every party the applicant must provide— (a) a copy of the proposed application to every other party before it is made; and (b) confirmation to the Tribunal that the other parties have been notified that any objection they wish to make to the application must be provided in accordance with paragraph (6). (6) A party who wishes to object to an application for a direction must within 10 days of being sent a copy of the application, send written notice of the objection to the Tribunal and the applicant. (7) Unless the Tribunal considers that there is good reason not to do so, the Tribunal must send written notice of any direction to every party and to any other person affected by the direction. (8) If a party or any other person sent notice of the direction under paragraph  (7) wishes to challenge a direction which the Tribunal has given, they may do so by applying for another direction which amends, suspends or sets aside the first direction.’ 24.61 Applications for directions may be determined following a hearing or without one. If any party wishes there to be a hearing, he should ask for this. 669

24.62  Procedure on application to UT under LPA 1925, s 84(1) As indicated above,38 the Registrar is able to exercise almost all the case management powers of the Tribunal.

FAILURE TO COMPLY WITH DIRECTIONS I:  All parties 24.62

Rule 7(2) provides that:

‘If any party has failed to comply with a requirement in these Rules, a practice direction or a direction, the Tribunal may, on the application of any party or on its own initiative, take such action as it considers just, which may include— (a) waiving the requirement; (b) requiring the failure to be remedied; (c) exercising its power under section 25 of the 2007 Act (supplementary powers of the Tribunal); or (d) exercising its power under rule 8 (striking out a party’s case).’ 24.63 There is also a power in rule 5(3)(a) to extend time for complying with  any rule or practice direction (and inherently, to do so in relation to its own directions orders) even where the application for an extension is not made until the time prescribed has expired. In the case of both an applicant or an objector, where there is a failure to comply  with any requirement of the rules, a practice direction or a Tribunal direction, the Tribunal may make an ‘unless’ order to enforce compliance. The specific rules involved differ according to whether the defaulting party is the applicant or an objector, so these will be considered individually.

II: Applicant 24.64 A failure by an applicant to follow one of the rules, a practice direction, or directions given by the Tribunal, may result in an order that ‘unless’ it is complied with by a specified time the applicant will have his case, or a specified part of it, struck out. Failure to comply will then lead to it being automatically struck out under rule 8(1). Alternatively, the direction might state that ‘unless’ there is compliance the applicant’s case, or specified part of it ‘could’ be struck out, putting the applicant on risk as to this under rule 8(3)(a). There is also a more general power in rule 8(3)(b) to strike out where the applicant has failed to co-operate ‘to such an extent that the Tribunal cannot deal with the proceedings fairly or justly’. 24.65 Rule 8(6) provides that where proceedings have been struck out under rule 8(1) or rule 8(3)(a), the applicant may apply for the proceedings, or that part of them, to be reinstated. Any such application is required to be made within 14 days of the date on which the Tribunal sent notification of the striking out to the applicant (rule 8(6)).

38

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Ie, the Tribunals, Courts and Enforcement Act 2007, s 25, which gives the Tribunal the powers of the High Court in relation to matters incidental to its functions.

Failure to comply with directions 24.69 24.66 The court (as opposed to the Tribunal’s) rules in relation to default were tightened up by amendments in 201339 to deal with a perceived problem that lawyers were taking a lax approach to the rules, and leading to delay, a backlog of cases and increased costs. Whilst there has been no similar amendment to the Tribunal rules an application for reinstatement under rule 8(5) might be expected  to be approached by the Tribunal in a broadly similar way to an application for relief from sanctions by the court (under CPR, rule 3.9) with: (1) the seriousness and significance of the breach being first assessed; (2) the reasons why the breach occurred being considered (which will be particularly important if the breach is serious or significant); and (3) at the third stage, all the circumstances of the case being considered.40 24.67 An applicant who has been struck out could potentially bring fresh proceedings before the Tribunal (on payment again of the required fee, and having been put back to the beginning), but it is possible the Tribunal could in appropriate circumstances stay them as an abuse under its general power in rule 5(3)(j) to impose a stay. Unless any objector’s costs from the first set of proceedings has been met it would seem only just to do so.41

III: Objector 24.68 In the case of an objector, the Tribunal has the same power to strike out his case : see rule 7(2)(d) set out in para 24.62 above. As with an applicant (above), failure by an applicant to follow the rules, practice direction, or directions given by the Tribunal, may result in an order that ‘unless’ it is complied with by a specified time the applicant will have his case, or a specified part of it, struck out. Failure to comply will then lead to it being automatically struck out under rule 8(1). Alternatively, the direction might state that ‘unless’ there is compliance the applicant’s case, or specified part of it ‘could’ be struck out, putting the applicant on risk as to this under rule 8(3)(a). 24.69

By rule 7(3):

‘A party will automatically be barred from taking further part in the proceedings or part of the proceedings if that party has failed to comply with a direction that stated that failure by that party to comply with the direction would lead to such a barring of that party.’ And by rules 7(4) to (6): ‘(4) If a party has been barred under paragraph (3), that party may apply to the Tribunal for the lifting of the bar. (5) An application made under paragraph (4) must be made in writing and received by the Tribunal within 14 days after the date on which the Tribunal sent notification of the bar to the parties.

39 in a revamped rule 3.9 of the CPR, introduced by the Civil Procedure (Amendment) Rules 2013, SI 2013/262. 40 See, in particular, Denton v TH White Ltd [2014] 1 WLR 3926. 41 In relation to the position in court proceedings, see Wahab v Khan [2011] EWHC 908 (Ch) and Associated Electrical Industries Ltd v Alstom UK [2014] EWHC 430 (Comm).

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24.70  Procedure on application to UT under LPA 1925, s 84(1) (6) If a party has been barred from taking further part in proceedings under this rule and that bar has not been lifted, the Tribunal need not consider any response or other submission made by that party, and may summarily determine any or all issues against that party.’ By referring to the party being ‘barred from taking further part in the proceedings’, or the relevant part of them, the rule is plainly directed to dealing with an objector who is in default. An order striking out the proceedings (of the applicant) would plainly be inappropriate, so this provides for barring the party from taking any further part in them.42 The comments made above in para 24.66 appear equally applicable in relation to the Tribunal’s power to give relief to an objector by the lifting of a barring order made against him.

EXPERT EVIDENCE 24.70 Expert evidence (for both the applicant and any objector) is obviously likely to be of crucial importance in most cases under section 84(1) of the 1925 Act. Unless the Tribunal otherwise orders, no party may call more than one expert witness.43 The Tribunal can make a direction that the parties jointly appoint a single expert:44 see below.

Duties of an expert 24.71

By rule 17(1):

‘It is the duty of an expert to help the Tribunal on matters within the expert’s expertise and this duty overrides any obligation to the person from whom the expert has received instructions or by whom the expert is paid.’ 24.72

PD paragraph 8.1 provides that:

‘Where more than one party is intending to call expert evidence in the same field, the experts must take steps before preparing or exchanging their reports to agree all matters of fact relevant to their reports, including the facts relating to any comparable transaction on which they propose to rely, any differences of fact, and any plans, documents or photographs on which they intend to rely in their reports.’

42 43 44

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Though technically, as will be appreciated, rules 7(2) and (3) are wide enough to also cover an applicant. Rule 17(2). Rule 16(1)(c).

Expert evidence 24.75

Form and content of expert reports 24.73 that:

As to the form and contents of an expert’s report, rule 17(5) provides

‘A written report of an expert must— (a) contain a statement that the expert understands the duty in paragraph (1) and has complied with it, (b) contain the words “I believe that the facts stated in this report are true and that the opinions expressed are correct”, (c) comply with the requirements of any practice direction as regards its form and contents, and (d) be signed by the expert.’ 24.74

In addition to which, PD paragraph 8.2 states that:

‘(1) An expert’s report should be addressed to the Tribunal and not to the party from whom the expert has received instructions. It must: (a) give details of the expert’s qualifications; (b) give details of any literature or other material on which the expert has relied in making the report; (c) say who carried out any inspection or investigations which the expert has used for the report and whether or not the investigations have been carried out under the expert’s supervision; (d) give the qualifications of the person who carried out any such inspection or investigations; and (e) where there is a range of opinion on the matters dealt with in the report— (i) summarise the range of opinion, and (ii) give reasons for his or her own opinion; (f) contain a summary of the conclusions reached; (g) contain a statement setting out the substance of all material instructions (whether written or oral). The statement should summarise the facts and instructions given to the expert which are material to the opinions expressed in the report or upon which those opinions are based.’ It is provided that the instructions referred to in sub-paragraph 1(g) above will not be privileged against disclosure.

Computer-based valuations 24.75

By PD paragraph 8.5:

‘Where valuers propose to rely on computer-based valuations they must agree to employ a common model which can be made available for use by the Tribunal in the preparation of its decision. Directions should be sought from the Tribunal at an early stage if there is difficulty in reaching agreement.’ 673

24.76  Procedure on application to UT under LPA 1925, s 84(1)

Questions to other party’s expert 24.76 Where a party thinks it necessary, it can put written questions to another party’s expert about his report, within one month of its service, as set out in PD paragraph 8.3(1). It is in the first instance for the party replying to pay any fees due for their expert replying (although, of course, any party may ultimately be awarded to be pay these costs (above). The expert is required to reply within three weeks. ‘If the question is not answered the Tribunal or a Registrar may make one or both of the following orders in relation to the party who instructed the expert: that the party may not— (i) rely on the evidence of that expert; or (ii) recover the fees and expenses of that expert from any other party.’45

Discussions between experts 24.77 PD paragraph 8.4 provides that after the exchange of the experts’ reports, and again if rebuttal reports are exchanged, the experts of each side should usually meet and, where the Tribunal so directs, must do so, in order to: (i) reach agreement as to facts; (ii) agree relevant plans, photographs, etc; (iii) identify the issues; and (iv) where possible, reach agreement on each issue. 24.78 As the paragraph then points out, the Tribunal will generally direct that  following a discussion between the experts the parties must prepare a statement for the Tribunal showing those facts and issues on which the experts agree and those facts and issues on which they disagree and a summary of their reasons for disagreeing. The Tribunal will usually regard failure to co-operate in reaching agreement as to the facts and issues as incompatible with the expert’s duty to the Tribunal and may reflect this in any order on costs that it may make. The contents of the discussions between the experts are not to be referred to at the hearing unless the parties agree. Where experts reach agreement on an issue during their discussions, the agreement will not bind the parties unless the parties expressly agree to be bound by the agreement.46

Reliance on expert evidence of one party by another party 24.79 When a party has disclosed an expert’s report any party may use that expert’s report as evidence at the hearing (PD paragraph 8.7).

Single joint expert 24.80

By PD paragraph 8.6:

‘(1) A party may apply for an order that expert evidence in the proceedings should be given by a single joint expert jointly instructed by the parties to

45 46

674

PD paragraph 8.3(2). PD paragraph 8.4(2).

Expert evidence 24.81 the proceedings. The application should include submissions on the matters to be taken into account by the Tribunal set out in paragraph 2 below. (2) When considering whether expert evidence should be from a single joint expert the Tribunal will take into account all the circumstances and in particular, whether: (a) it is proportionate to have separate experts for each party on a particular issue with reference to– (i) the amount in dispute; (ii) the importance to the parties; and (iii) the complexity of the issue; (b) the instruction of a single joint expert is likely to assist the parties and the Tribunal to resolve the issue more speedily and in a more costeffective way than separately instructed experts; (c) expert evidence is to be given on the issue of liability, causation or quantum; (d) the expert evidence falls within a substantially established area of knowledge which is unlikely to be in dispute or there is likely to be a range of expert opinion; (e) a party has already instructed an expert on the issue in question; (f) questions put in accordance with paragraph 8.3 are likely to remove the need for the other party to instruct an expert if one party has already instructed an expert; (g) questions put to a single joint expert may not conclusively deal with all issues that may require testing prior to the final hearing; (h) a conference may be required with the legal representatives, experts and other witnesses which may make instruction of a single joint expert impractical; and (i) a claim to privilege makes the instruction of any expert as a single joint expert inappropriate.’ 24.81 The Tribunal may occasionally make up for deficiencies in the expert evidence by reference to its own expertise (many of its members being surveyors): see, for example, Re Pottier’s Application47 and Re Rae.48 It would obviously be very dangerous for any party to rely on this being done, however, and, where it is, it may not produce the result the party (or either of the parties) wants. 47 [2010] UKUT 2006. Where compensation of 2.5 per cent (£6,875) representing the diminution of value in the objector’s property was awarded on modification, despite somewhat unsatisfactory expert evidence, the Tribunal (Mr Peter D McRea FRICS) doing the best that it could in the circumstances. 48 [2016] UKUT 0552 (LC). Where a diminution in the likely value of benefited houses was, in the absence of convincing expert evidence, found by the Tribunal (HHJ Behrens and Mr Peter D McRea FRICS) using its own judgment to amount to less than 2 per cent, which was considered not to be substantial for the purposes of section 84(1)(aa) (see further, para 23.10 above). See, also, Re Bass Ltd’s Application (1973) 26 P&CR 156, at 162 where the fact that the objectors’ expert surveyor could not himself quote figures for depreciation in the value of the objectors’ property if the proposed user went ahead did not prevent the Tribunal from holding that the restrictions secured practical benefits of substantial advantage (by way of assuaging the fear and dislike of the proposed ‘trucker park’ and avoiding fumes, vibration, dirt, appearance, and the risk of accidents) (J Stuart Daniel QC).

675

24.82  Procedure on application to UT under LPA 1925, s 84(1) 24.82 The previous Lands Tribunal Practice Direction (1996)49 stated in relation to expert evidence that: ‘If a professional body has adopted a code of practice and professional conduct dealing with the giving of evidence, then the Tribunal will expect a Member of that body to comply with the provisions of the code in the preparation and presentation of his evidence’.50 This does not appear in the current PD but conduct by the expert which is not in  accordance with reasonable standards, taking into account amongst other things, his professional duties, may obviously devalue his evidence and may also be taken into account in relation to costs. 24.83 In Re Fisher’s Application,51 the objector’s expert had previously advised  the applicant in relation to obtaining planning permission for the development, which before the Tribunal he then gave evidence would cause injury to the objector’s property. The applicant failed to establish any of the grounds for modification of the covenant, and he was ordered to pay the objector’s costs of the application, but excluding the costs of the expert who had acted in this way. This was considered an appropriate sanction for his unacceptable behaviour. The argument that the objector should be deprived of all of his costs following the instruction of the expert was rejected, however, on the basis that even if another expert had then been instructed the application would have failed anyway, the sanction applied was already in the nature of a windfall for the applicant in avoiding the expert’s costs, and to deprive the objector of all his costs would be going too far.

EVIDENCE AND SUBMISSIONS 24.84 The parties will generally be required by the Tribunal to provide written witness statements or (where the person is to be summoned to attend) summaries of expected evidence in advance of the hearing. 24.85 Rule 18 provides that the Tribunal52 may summons any person to attend  to answer questions at a hearing or produce relevant (non-privileged) documents. The summons must give the person at least 14 days’ notice of the hearing (unless the Tribunal abridges that period) and, unless the person is a party to the proceedings, make provision for the payment of the person’s necessary expenses of attending and state who is to pay them. The person may, as soon as practicable after receiving notice of the summons, apply to set aside or vary the summons if they did not have an opportunity to object before it was issued. Formal requirements for what the summons must contain are set out in Rule 16(6).

49 50 51 52

676

Dated 11 May 2006. Paragraph 16.2. (2009) LP/31/2006, decided by reference to the 2006 Practice Direction. On the application of a party or in its own intiative, although the latter would be unsual.

Hearings 24.90

WITHDRAWAL AND CONSENT ORDERS 24.86 A party may give notice of the withdrawal of its case, or any part of it, by sending a written notice to the Tribunal and to all other parties.53 However, unless all parties to the proceedings consent, the notice of withdrawal will not take effect unless the Tribunal consents to the withdrawal. This enables those subject to the withdrawal to ensure, for example, that their costs are paid, either by agreement or by an order made by the Tribunal before the withdrawal is effective and arguments could be made that it has ceased to have jurisdiction.54 24.87 Rule 20(4) provides that a party which has withdrawn its case or part of it may apply to the Tribunal for the case to be reinstated. There must be limited circumstances in which, having withdrawn a case altogether, it might be appropriate to invoke this rule, but it would cover the position where, for example, this had been done under a mistake as to some fact or circumstance. Reinstatement of a withdrawn part of a party’s case might be appropriate where, for example, it became apparent during the continuation of the proceedings thereafter that it was appropriate to reinstate it. Such circumstances are likely to be rare. 24.88 Rule 50 provides that the Tribunal may at the request of the parties make a consent order disposing of the proceedings and making such other provision as the parties have agreed – ‘but only if it considers it appropriate’. This is a general rule covering all types of proceeding before the Upper Tribunal, not just cases concerning covenants under section 84(1) of the 1925 Act. 24.89 In cases under section 84(1), a Tribunal would be likely to find no difficulty in making a consent order if the proceedings are simply to be dismissed with ancillary orders (although the application could, and generally would, simply be withdrawn under rule 20, just referred to). Where, however, the parties are agreed the application or some part of it should be granted, the Tribunal still has to be ‘satisfied’ the relevant ground(s) in section 84(1) are made out in order for it to be able to make an order,55 and still has to exercise the statutory discretion given to it by section 84(1). In relation to this, see paras 24.31–24.32 above.

HEARINGS Constitution of the Tribunal 24.90 The Tribunal (formally through the President), will decide whether the Tribunal comprises one, two or three members and who they are (whether judge or surveyor or both). Again, representations could be made as to any factors which may be of particular importance in relation to this in a specific case.56

53 Rule 20(1). 54 Rule 20(2) and (3). See, for example, Re Nesters’ and Jones’ Applications (2007) LP/53/2005 and LP/62/2005 (objector’s withdrawal following unreasonable behaviour). 55 See the wording of s 84(1) itself. 56 Robes are not worn at hearings, and members of the Tribunal are addressed as ‘sir’ or ‘madam’.

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24.91  Procedure on application to UT under LPA 1925, s 84(1)

Place of hearing 24.91 Hearings can be held in London and at numerous places throughout the country close to application land, usually making use of rooms in court buildings. If either party wants a hearing at a particular location, they should attempt to agree this with the other parties, and make representations to the Tribunal as soon as possible.

Public hearing 24.92 Hearings are generally held in public.57 If considered appropriate, the Tribunal may require a witness to remain out of the hearing room prior to giving evidence.58

Adjournments 24.93 Applications for adjournments will not be granted as a matter of course, and proper reasons are expected to be given. Even where an application is for an adjournment with the consent of the other parties, the Tribunal will bear in mind the inefficiency of adjournments and the potential effect on other cases waiting to be heard, particularly where it is sought only shortly before the hearing date, or on it, when it may be difficult to fit other cases in to take the place of the hearing that is being adjourned. In the case of an opposed application, the reasons for seeking an adjournment will be particularly important, as will any prejudice to the opposing party (either specific, or general in terms of having already waited a long time for a determination) although all the circumstances will fall to be considered. Clearly, the earlier an application is made the better.

Failure to attend 24.94

By rule 49:

‘If a party fails to attend a hearing, the Tribunal may proceed with the hearing if the Tribunal— (a) is satisfied that the party has been notified of the hearing or that reasonable steps have been taken to notify the party of the hearing; and (b) considers that it is in the interests of justice to proceed with the hearing.’ The Tribunal might wish to wait for a short time before deciding whether to proceed in a party’s absence, in order to give them additional time in which to turn up, to require them to be contacted by telephone or mobile phone, and to investigate such things as whether there is any known or possible reason why they might have been unable to attend (in time or at all), their past history of attendance and the like.

57 58

678

Rule 48. Rule 48(7).

Hearings 24.98 24.95 If the Tribunal does proceed in the absence of a party, rule 54 provides that it may set aside a decision, and re-make it, if the Tribunal considers that it is in the interests of justice to do so. This might be invoked if, for example, a party had not received notice of the hearing, or had been unexpectedly prevented from attending it, for reasons beyond his control. A party applying for a decision or part of a decision to be set aside must send a written application to the Tribunal and all other parties so that it is received no later than one month after the date on which the Tribunal sent notice of the decision to the party.59 It is obviously of crucial importance that they ensure the Tribunal has up-to-date contact details. 24.96 The Tribunal will almost invariably want to view the relevant premises, and an accompanied inspection60 will usually take place during the hearing (or just before or just after it), although the Tribunal member(s) if present in the area for a local hearing, may informally visit the locality beforehand to familiarise themselves with it in a general way. Members will obviously not enter any private premises to carry out an inspection without consent,61 although obviously in the case of the applicant or objector they are expected to give it (as part of their duty of co-operation in rule 4(4)(b)). Failure by an applicant or objector to allow an inspection could mean that the Tribunal was not satisfied as to that party’s case in the absence of it. Where inspection is of great importance, failure to do so could even potentially result in the use of the strike-out power in rule 8(3)(b) relating to non-co-operation. PD paragraph 10 also expressly provides that the Tribunal may take into account any refusal to allow inspection when deciding any application for costs. 24.97 A bundle of relevant documents will be required to be agreed if possible, and served and lodged prior to the hearing (pursuant to rule 5(1)(i)). Privileged (eg ‘without prejudice’) documents and offers should obviously be excluded.62

Procedure 24.98 The procedure at hearings, other than under the ‘simplified procedure’, will follow that in the courts. The applicant will generally begin63 and have a

59 60 61 62

Rule 54(3). Ie the member(s) accompanied by a representative of each party. See rule 19. ‘The whole purpose of without prejudice correspondence was to enable parties to litigation to attempt to arrive at a settlement of their differences whilst preserving their position, and preserving their privilege against subsequent disclosure’, as the President (HH Judge Marder QC) said in Re Hopcraft’s Application (1993) 66 P&CR 475 (at p 478) so that, as in that case, it is no use trying to rely on it in support of ground (b) unless it shows there has been a concluded agreement. 63 However, the precedure at a hearing is within the discretion of the presiding judge or member and if a hearing is concerned wth a particular issue where the burden of proof is on another party, the Tribunal is likely to ask him to go first – for example, where the only issue before the Tribunal is as to the amount of compensation claimed by an objector, or where an objector makes an interim application.

679

24.99  Procedure on application to UT under LPA 1925, s 84(1) right of reply, evidence will be taken on oath and the rules of evidence will be applied.64 Like a court,65 the Tribunal has wide powers to, for example, limit the number of witnesses, require written submissions and the like, and can exclude evidence not provided in accordance with a direction or the PD or where it would be unfair to admit it.66 24.99 Objectors (in person or through a representative) will normally each be entitled to cross-examine the applicant’s witnesses but only the applicant will usually be entitled to cross-examine witnesses who are called on behalf of any particular objector or group of objectors. The party whose witness is cross-examined will then be entitled to re-examine on any matters elicited in the cross-examination. After the conclusion of the evidence and after the objectors have addressed the Tribunal, the applicant will then usually be entitled to make his final address. Cases assigned to the ‘simple procedure’ list will be heard by a single judge or other member, the procedure at the hearing will be ‘informal’ and the strict rules of evidence will not apply.67

DECISIONS 24.100 The Tribunal may give a decision orally at a hearing. However, a judgment is generally given in writing afterwards. Even if given orally, the Tribunal must provide to each party as soon as reasonably practicable after making a final decision on the issues in the proceedings, or on a separate or preliminary issue, a decision notice setting out the Tribunal’s decision and containing notification of rights of review and appeal rights, together with written reasons for its decision68 (rule 51). 24.101 In English v Emily Reimbold & Strict,69 the Court of Appeal explained the extent of the duty of a court to give reasons for a decision. The Court pointed out that the scope of what is required to fulfil the duty will depend on the subject matter of the case, but that it is necessary to enter into issues canvassed and to explain why one side’s case is preferred over the other’s, including why one expert’s evidence is preferred to that of another. Although the case was one of an appeal from the High Court, the principle is equally applicable to the Upper Tribunal: see Graham v Easington DC.70

64 65 66 67 68

PD paragraph 9. Under the CPR. Rule 16. PD paragraph 3.3(2),as stated at para 24.53 above. Unless the decision was made by consent or the parties have consented to the Tribunal not giving reasons. 69 [2002] 1 WLR 2409. 70 [2008] EWCA Civ 1503, at para 24. See also Perkins v McIver [2012] EWCA Civ 735, at para 31, where, more specifically, the Court of Appeal (quashing the Tribunal’s decision and remitting the matter to it) held that if the Tribunal is going to radically disagree with an expert’s unchallenged evidence it has to give clear reasons for doing so (and should itself have put the relevant points to the expert).

680

Setting aside decisions 24.106 However, as the Court of Appeal71 there said: ‘… it is also clear from the authorities that decisions of this kind should be read benevolently and that the court should endeavour to give a fair reading to them where it can, particularly in relation to a decision of an expert tribunal: as to which, see most recently AH (Sudan) v SSHD [2007] UKHL 49 at paragraph 30.’ 24.102 In the Tribunal, the practice in most cases is for the Tribunal to set out each party’s case in turn, and then give conclusions in relation to each of the issues in the case together with its reasons, followed by the order that will therefore be made. 24.103 Any clerical mistake or other accidental slip or omission in a decision, or record of a decision, may be corrected by making any necessary amendment (rule 53). 24.104 Rule 39 provides that where the Tribunal orders the discharge or modification of a restriction subject to the payment of compensation, the discharge or modification shall not take place until the Tribunal has endorsed on the order that the compensation has been paid, and the Tribunal may direct that the order shall cease to have effect if the compensation is not paid within a specified time. As indicated above, orders of the Tribunal made under section 84 have effect in rem, as section 84(5) provides that they are binding on all persons entitled, then or in the future, to the benefit of the restriction that is discharged or modified.

SETTING ASIDE DECISIONS 24.105 By rule 54 the Tribunal may set aside a decision which disposes of proceedings, or part of such a decision, and re-make the decision or the relevant part of it, if: (a) the Tribunal considers that it is in the interests of justice to do so; and (b) one or more of the following conditions are satisfied: (i) a document relating to the proceedings was not sent or delivered to, or was not received at an appropriate time by, a party or a party’s representative; (ii) a document relating to the proceedings was not sent or delivered to the Tribunal at an appropriate time; (iii) a party, or a party’s representative, was not present at a hearing related to the proceedings; or (c) there has been some other procedural irregularity in the proceedings. 24.106 A party applying for a decision or part of a decision to be set aside must send a written application to the Tribunal and all other parties so that it is received no later than one month after the date on which the Tribunal sent notice of the decision to the party.72

71 72

Through Carnwath LJ. Rule 54(3).

681

24.107  Procedure on application to UT under LPA 1925, s 84(1)

APPEALS AND REVIEWS Right of appeal 24.107 By section 13 of the Tribunals, Courts and Enforcement Act 2007 there  is a right of appeal, on a point of law, from the decision of the Upper Tribunal to the Court of Appeal.73 Examples of points of law include the Tribunal’s interpretation of the words of section 84(1),74 whether an enforceable covenant exists,75 whether an objector is entitled to the benefit of a covenant,76 whether a covenant is positive or restrictive,77 whether the Tribunal has misdirected itself as to the factors relevant to the exercise of its discretion,78 whether compensation can properly be assessed on a particular basis79 and whether the Tribunal’s findings of fact are supported by the evidence.80 24.108 A serious irregularity in the proceedings is also capable of being the basis of an appeal. For example, in Hatton v Connew81 a judge’s reliance on things said by the parties’ experts during a site visit, of which no record was made, and which the parties had no opportunity to test by cross-examination, was held by the Court of Appeal to amount to such an irregularity and to be unjust. The case was remitted to the judge for proper determination of relevant issues. 24.109 As the appeal lies only on a point of law, an appeal in relation to a decision as to the exercise of the Tribunal’s discretion under section 84(1) can only be made on very limited grounds.

73 74

See subsections (1), (11) and (12)(a). Re Truman, Hanbury, Buxton & Co Ltd’s Application [1956] 1 QB 261 (meaning of ‘obsolete’); Re Martin’s Application (1988) 57 P&CR 119 (meaning of ‘obsolete’); Abbey Homesteads (Developments) Ltd v Northamptonshire County Council (1986) 53 P&CR 1 (meaning of ‘obsolete’); Driscoll v Church Commissioners for England [1957] 1 QB 330 (meaning of ‘obsolete’ and of discretion); Stockport Metropolitan Borough Council v Alwiyah Developments (1986) 52 P&CR 278 (meaning of ‘practical benefit’); Cresswell (Trustees of the Cobbett Settlement) v Proctor (Trustees of the Covent of the Holy Family) [1968] 1 WLR 906 (extent of discretion); Re Ghey and Galton’s Application [1957] 2 QB 650 (absence of any discretion except where one of the four grounds is established); Re Edward’s Application (1960) 11 P&CR 403 (‘practical benefit’). 75 Driscoll v Church Commissioners for England (above) (covenant in a lease which was the subject of proceedings for forfeiture); Re Purkiss’ Application [1962] 1 WLR 902 (Tribunal not satisfied that building scheme existed – the Court of Appeal’s observations on the Tribunal’s function on such a question now no longer apply, having been superceded by the changes in the Tribunal’s powers effected by the Law of Property Act 1969). 76 Spruit v John Smith’s Tadcaster Brewery Ltd (1957) 9 P&CR 24. Such a question will now rarely arise since any question as the locus standi of persons serving notices of objection will now usually have been disposed of before the main Tribunal hearing pursuant to s 84(3A): see above 24.33 et seq. 77 Abbey Homesteads (Developments) Ltd v Northamptonshire County Council (1986) 53 P&CR 1. 78 Ridley v Taylor [1965] 1 WLR 611; Re Wickin’s Application (1962) 183 States Gazette 541; Jones v Rhys-Jones (1974) 30 P&CR 451; Gee v National Trust for Places of Historic Interest or Natural Beauty [1966] 1 WLR 170. 79 SJC Construction Ltd v Sutton London Borough Council (1975) 29 P&CR 322; Stockport Metropolitan Borough Council v Alwiyah Developments (1986) 52 P&CR 278. 80 See, eg Gee v National Trust for Places of Historic Interest or Natural Beauty [1966] 1 WLR 170. 81 [2013] EWCA Civ 1560, a county court case concerning a boundary dispute.

682

Appeals and reviews 24.109 As Ormrod LJ said in Jones v Rhys-Jones:82 ‘The decision whether or not to accede to an application for modification of a restrictive covenant under section 84(1), is, once the requirements of the section have been satisfied, clearly a matter of discretion, and this discretion is now vested by statute in the Lands Tribunal. This court … can do no more than review the exercise of it by the Lands Tribunal. according to well-known principles (see Egerton v Jones [1939] 2 KB 702).’ It would accordingly need to be shown that the Tribunal exercised its discretion improperly, in that it did not, for example, take into account relevant factors or had taken into account irrelevant factors or failed to proceed on the basis of an accurate understanding of the position or wrongly considered its discretion fettered in some way. By way of example, see the following cases: In Re Wickins’ Application,83 the Tribunal rested the negative exercise of its discretion on what was held by the Court of Appeal to be a misassessment of the effect of the words of a conveyance. In Ridley v Taylor,84 the Court of Appeal held that, even if the modification would not have injured the landlord (which it found it did), the tribunal should not have exercised its discretion in favour of the application because, as it only had jurisdiction in leasehold cases when 25 years of the term had expired, it should have taken into account that the covenants had been reaffirmed within that period. In Gee v National Trust for Places of Historic Interest or Natural Beauty,85 the grounds upon which the Tribunal exercised its discretion against granting the application for the modification of a covenant entered into with the National Trust under section 8 of the National Trust Act 1937, were that to grant the application might deter landowners from entering into similar covenants and might prejudice an appeal for money which the National Trust had launched under the name of Enterprise Neptune. No evidence had been adduced before the Tribunal to prove either of those consequences. The Court of Appeal therefore concluded that no grounds had been established for the Tribunal exercising its discretion against the applicant and ordered the covenant to be modified. In Jones v Rhys-Jones86 the Tribunal applied what it considered to be a general principle that an application for the modification of a covenant should not be allowed where there was only a short time between the imposition of the burden of the covenant and the application for modification, on the basis of a previous case (Cresswell v Proctor).87 The Court of Appeal held that the modification of a restrictive covenant was a matter of discretion for the tribunal to be exercised in each case on its merits.88 If the Court of Appeal is satisfied the discretion had been exercised in such a way that no reasonable Tribunal could properly have exercised it in the way 82 83 84 85 86 87 88

(1974) 30 P&CR 451, at 461. (1962) 183 EG 541. [1965] 1 WLR 611. [1966] 1 WLR 170, CA. (1974) 30 P&CR 451. [1968] 1 WLR 906. See further, para 16.62 above.

683

24.110  Procedure on application to UT under LPA 1925, s 84(1) that the Tribunal did, that will also be a ground of appeal, but the bar is a high one and it is not sufficient simply that the members of the Court of Appeal would themselves have exercised the discretion differently: see Lord Fraser of Tullybelton in G v G (Minors:Custody Appeal)89 and Tanfern Ltd v CameronMacDonald (Practice Note).90 In the event that the Tribunal is found to have failed to consider the exercise of its discretion properly, and the Court of Appeal cannot discern how the Tribunal would otherwise have exercised its discretion, the case will generally be remitted  to it for it to exercise that discretion, such discretion being, as Omerod LJ said in Jones v Rhys-Jones91 at p 461, quoted above, that of the Tribunal not of the Court of Appeal. If the Court considered the discretion could only properly have been exercised one way, the position would obviously be different, though.92

Permission to appeal required 24.110 Permission to appeal is required93 and may be given by the Upper Tribunal, or if the Tribunal refuses permission by the Court of Appeal.94 An application must therefore be made to the Tribunal in the first instance.The application must be made in writing.95 By rule 55(2), an application to the Tribunal for permission to appeal is required to be made: ‘… so that it is received within 1 month after the latest of the dates on which the Tribunal sent to the person making the application— (za) the relevant decision notice; (a) written reasons for the decision, if the decision disposes of— (i) all issues in the proceedings; or (ii) subject to paragraph (2A), a separate or preliminary issue dealt with following a direction under rule 5(3)(e); (b) notification of a decision to award, or refuse to award, costs; (c) notification of amended reasons for, or correction of, the decision following a review; (d) notification that an application for the decision to be set aside has been unsuccessful.’ By rule 55(2A): ‘The Tribunal may direct that the 28 days within which a party may send or deliver to the Tribunal an application for permission to appeal against a decision that disposes of a separate or preliminary issue shall run from the date of the decision that disposes of all issues in the proceedings.’

89 90 91 92 93 94 95

684

[1985] 1 WLR 647, at p 652. [2000] 1 WLR 1311, at para 32. (1974) 30 P&CR 451. And cf Re Wickin’s Application (1962) 183 EG 541 (above). Tribunals, Courts and Enforcement Act 2007, s 13(3). Ibid, s 13(4). Rule 55(1).

Appeals and reviews 24.114 By rule 55(3): ‘The date in paragraph (2)(b) applies only if the application for costs was made within the time stipulated in rule 10(10) (orders for costs).’ And by rule 55(4): ‘The date in paragraph (2)(d) applies only if the application for the decision to be set aside was made within the time stipulated in rule 54 (setting aside a decision which disposes of proceedings) or any extension of that time granted by the Tribunal.’ By rule 55(5): ‘If the person seeking permission to appeal provides the application to the Tribunal later than the time required — (a) the application must include a request for an extension of time and the reason why the application notice was not provided in time; and (b) unless the Tribunal extends time for the application under rule 5(3)(a) (power to extend time) the Tribunal must refuse the application.’ 24.111 By rule 55(6), an application for permission to appeal must: (a) identify the decision of the Tribunal to which it relates; (b) identify the alleged error or errors of law in the decision; and (c) state the result the party making the application is seeking. 24.112 Part 52 of the Civil Procedure Rules applies in relation to appeals to the Court of Appeal. CPR, rule 52.6(1) provides that that permission to appeal may be given in relation to first instance decisions only where: (a) the court considers that the appeal would have a real prospect of success; or (b) there is some other compelling reason for the appeal to be heard. Like the Tribunal, the Court of Appeal may when granting permission, limit the issues to be heard or allow it to be made subject to conditions (CPR, rule 52.6(2)). 24.113 For the rules in relation to procedure in the Court of Appeal, either before  or after permission is granted, see Part 52 of the CPR and the accompanying Part 52 Practice Directions.

Reviews 24.114 Rule 56(1) provides that: ‘On receiving an application for permission to appeal the Tribunal may review the decision in accordance with rule 57 if: (a) when making the decision the Tribunal overlooked a legislative provision or binding authority which could have had a material effect on the decision; or (b) since the Tribunal’s decision, a court has made a decision which is binding on the Tribunal and which, had it been made before the Tribunal’s decision, could have had a material effect on the decision.’ 685

24.115  Procedure on application to UT under LPA 1925, s 84(1) The results of any such review are sent to the parties, and if the Tribunal decides to take any action without first giving an opportunity to all parties to make representations, any party may ask for such action to be set aside and for the decision to be reviewed again (rule 57).

Decision on review/application for permission to appeal 24.115 If the Tribunal decides not to review the decision (or reviews the decision and decides to take no action in relation to it or part of it) the Tribunal sends the parties its decision on the application for permission to appeal, either granting permission to appeal on all grounds or on limited grounds, or dismissing the appeal, giving reasons for any refusal of permission on all or any of the grounds (rule 56). A decision to review or not review a decision or to take no action following a review is not appealable (section 13(8) of the Tribunals, Courts and Enforcement Act 2007) and a refusal of permission to appeal is not itself appealable.96 24.116 The Tribunal may treat an application for a decision to be corrected, set aside or reviewed, or for permission to appeal against the decision, as an application for any other one of those things (rule 58). If an appeal to the Court of Appeal succeeds, it may remit the case to the Tribunal, with directions for reconsideration of the matter, or may itself re-make the decision appealed against (section 14 of the Tribunals, Courts and Enforcement Act 2007).

Supreme Court 24.117 If the Upper Tribunal is satisfied that a point of law of general public importance is involved in relation to a decision it has made, which: (a) relates wholly or mainly to the construction of an enactment or statutory instrument that has been fully considered in its judgment; or (b) in respect of which the Upper Tribunal is bound by a previous Court of Appeal (or Supreme Court) decision in other proceedings in the judgments on which it was fully considered; and (i) the proceedings entail a decision relating to a matter of national importance or consideration of such a matter; (ii) the result of the proceedings is so significant (whether considered on its own or together with other proceedings or likely proceedings) that, in the opinion of the Upper Tribunal, a hearing by the Supreme Court is justified, or (iii) the Upper Tribunal is satisfied that the benefits of earlier consideration by the Supreme Court outweigh the benefits of consideration by the Court of Appeal, it can grant a certificate under section 14A of the of the Tribunals, Courts and Enforcement Act 2007 allowing an application for permission to appeal to the

96 See Sarfaz v Disclosure and Barring Service [2015] 1 WLR 4441.

686

Costs 24.122 Supreme Court (ie a ‘leapfrog’ appeal) to be made directly to the Supreme Court under section 14B of the 2007 Act. This would obviously be extremely rare. 24.118 Where instead the appeal proceeds by the usual route to the Court of Appeal, an appeal from that court to the Supreme Court on a point of law of general public importance lies with the permission of the Court of Appeal or the Supreme Court (under the Constitutional Reform Act 2005, and subject to the usual rules set out in the Supreme Court Rules 200997 and the Court’s Practice Directions). An application to the Supreme Court for permission to appeal must be made within 28 days from the date of the decision of the Court of Appeal (Supreme Court Rules 2009, rule 11(1)), subject to any extension of time that may be granted (under rule 5(1) of the Supreme Court Rules 2009). Permission is given sparingly.

COSTS Powers of the Tribunal 24.119 Section 29 of the Tribunals, Courts and Enforcement Act 2007 provides that the costs of, and incidental to, all proceedings in the Upper Tribunal shall be in the discretion of the Tribunal. Rule 10(6) of the Rules provides that the Tribunal may make an order for costs in proceedings under section 84(1) of the Law of Property Act 1925. By rule 10(1) such an order may be made on an application or on the Tribunal’s own initiative. Usually it will, of course, do so pursuant to an application. 24.120 Subsections (4) and (5) allow wasted costs orders to be made against legal or other representatives where costs: (a) which are incurred by a party as a result of any improper, unreasonable or negligent act or omission on the part of such representative or any employee of them; or (b) which, in the light of any such act or omission occurring after they were incurred, the Tribunal considers it is unreasonable to expect that party to pay. 24.121 The Registrar may make an order as to costs in respect of any functions exercised by him (‘Practice Statement on Delegation of Functions of Staff on or after 29 November 2010’, paragraph 1e).

Exercise of the Tribunal’s discretion as to costs I:  Simplified and written procedure cases 24.122 PD paragraph 12.8 provides that in cases determined under the ‘Simplified’ and ‘Written Representations’ procedures, costs will only be awarded if there has been an unreasonable failure on the part of the claimant to accept an offer to settle, or if either party has behaved otherwise unreasonably, or the circumstances are in some other respect exceptional.

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SI 2009/1603.

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24.123  Procedure on application to UT under LPA 1925, s 84(1)

II:  General principles in other cases Award of costs 24.123 In other cases, PD paragraph 12.2 states that in relation to costs orders the Tribunal will have regard to all the circumstances, including the conduct of the parties (both before and during the proceedings); whether a party has succeeded on part of their case even if they have not been wholly successful (which could result in an issue-based costs order); and admissible offers to settle. 24.124 By PD paragraph 12.2, the conduct of a party for these purposes expressly includes whether a party has acted reasonably in pursuing or contesting an issue; whether or not they have exaggerated their claim; whether they have unreasonably failed to consider alternative dispute resolution; the matters in relation to experts referred to in paragraphs 8.3(2) and 8.4 and any refusal to allow inspection of a party’s land under paragraph 10. The general rule, however, is that the successful party ought to receive their costs (paragraph 12.3).

Basis of assessment 24.125 By paragraph 12.4 of the PD, the normal basis for an award of costs is the ‘standard basis’ – that is to say, the costs allowed will only be those that are considered reasonable and proportionate to the matters in issue, and any doubt as to whether costs were reasonably incurred or reasonable and proportionate in amount will be resolved in favour of the paying person. 24.126 Exceptionally (as the PD says) the Tribunal may award costs on the’ indemnity basis’ – that is to say, the receiving party will receive all their costs, except for those which have been unreasonably incurred or which are unreasonable in amount, and any doubt as to whether the costs were reasonably incurred or are reasonable in amount will be resolved in favour of the receiving party.

Summary or detailed assessment 24.127 The Tribunal may assess the costs summarily or direct they be subject to detailed assessment by the Registrar (PD paragraph 12.1(2)). Summary assessment is intended to be the norm for simple cases and in relation to interim hearings. A party who proposes to apply for summary assessment must prepare a summary of the costs and serve it in advance on the other parties (PD paragraph 12.9).

III:  Guidance relating to specific situations (a) Where the applicant challenges an objector‘s entitlement to object under section 84(1) 24.128 PD paragraph 12.5(2) provides that: ‘Where an applicant successfully challenges an objector’s entitlement to object to an application, the objector is normally ordered to pay the applicant’s 688

Costs 24.131 costs incurred in dealing with that challenge, but only those costs. Where an applicant unsuccessfully challenges an objector’s entitlement to object to an application, the applicant is normally ordered to pay the objector’s costs incurred in dealing with that challenge.’

(b)  Where the applicant withdraws 24.129 Although it is not covered by the PD, the President of the Tribunal98 indicated in Re Hurleys’ Application99 that ‘Where an applicant withdraws an application the objectors ought to have their costs unless there is some good reason why they should not’. The reason for this is obvious – the applicant, by withdrawing, is accepting that he does not want the Tribunal to determine anything (or is acknowledging that it has no jurisdiction to do so) but has made an application on the basis that he does (and that the Tribunal has jurisdiction) and objectors ought to be compensated for any costs incurred as a result.

(c)  Preliminary hearings 24.130 An applicant who unsuccessfully challenges an objector’s entitlement to object (that is to say, contends he has not shown he is entitled to the benefit of the covenant) at a preliminary hearing will probably not, unless his behaviour is unreasonable, be ordered to pay the objector’s costs. The position in relation to proceedings before the Tribunal for the discharge or modification of a restrictive covenant under section 84(1) of the 1925 Act are different from ordinary civil proceedings in that an owner who is seeking an order may, particularly if they were imposed a long time ago, have no way of knowing who, if anyone, is still entitled to the benefit. In these circumstances, the guidance in PD paragraph12.5(3) that ‘Where an applicant unsuccessfully challenges an objector’s entitlement to object to an application, the applicant is normally ordered to pay the objector’s costs incurred in dealing with that challenge’ (above, para 24.123) will not apply. As Buxton LJ said in Winter v Traditional and Contemporary Contracts Ltd:100 ‘The Judge was hearing a preliminary issue, where the onus was on the objector to establish that he indeed had the property right that the applicant was said to be attacking’. 24.131 Longmore LJ went on to say that, ‘Before that right was established, the costs assumption in favour of the objector did not apply…’. The present PD (unlike the earlier Practice Direction of the Lands Tribunal the court in Winter was considering) expressly states that the guidance in paragraph 12.5(3) only applies in relation to the costs of the substantive proceedings, and not therefore to such a preliminary hearing to establish whether the would-be objector has title to be admitted as an objector.

98 George Bartlett QC. 99 (2007) LP/74/2006. 100 [2006] EWCA Civ 1740, at para 38 (decided under the like provision in the previous Lands Tribunal Rules).

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24.132  Procedure on application to UT under LPA 1925, s 84(1) 24.132 In contrast, in Thames Valley Holdings Ltd v The National Trust,101 the Court of Appeal held that where an objector’s right to object is not the issue, and a preliminary hearing takes place to determine matters which otherwise would fall to be dealt with at the final hearing of the case, thus simply advancing the stage at which they are considered by the Tribunal (which may be done with a view to saving costs, because, for example, if they are successful the case will be ended without further expense), the normal rule in PD paragraph 12.5(3) will apply, and there is no reason that it should not do so. Accordingly, if an application to strike out the proceedings on the basis that for specified reasons they are bound to fail, but the application is dismissed, it may be reasonable for the costs order to be ‘costs in the application’, meaning that the normal rules in paragraph 12.5(3) of the PD will apply to the costs incurred, as part of the costs of the substantive proceedings.

(d) Where the applicant succeeds in the substantive proceedings 24.133 PD paragraph 12.5(3) provides that: ‘With regard to the costs of the substantive proceedings, because the applicant is seeking to remove or diminish particular property rights that the objector has, unless they have acted unreasonably, unsuccessful objectors to an application will not normally be ordered to pay any of the applicant’s costs. And successful objectors will usually be awarded their costs unless they have acted unreasonably.’ This paragraph is in similar terms to the previous Lands Tribunal Practice Direction and follows the approach of the President in an ‘Addendum on costs’ in Fairclough Homes Ltd.102 24.134 In relation to unreasonable behaviour by objectors, see below. 24.135 In determining what costs to order, the Tribunal must have regard to the size and nature of the matters in dispute (rule 10(8)).103

(e)  Unreasonable behaviour 24.136 The guidance in paragraph 12.5(3) just referred to104 does not mean that if there is unreasonable behaviour in relation to any part of the proceedings, the party responsible will not be ordered to bear the costs, as the words ‘normally’ and ‘reasonably’ are used.105 Where there is unreasonable behaviour by a party or someone instructed on his behalf, this may affect the entire costs order or a relevant part of the costs: see Re Fisher’s Application above.106 101 [2012] EWCA Civ 1019. 102 (2004) LP/30/2001. See Winter v Traditional and Contemporary Contracts Ltd [2006] EWCA Civ 1740, at para 21. 103 This is similar to the duty of the courts under the CPR to have regard to proportionality in relation to costs. 104 Paragraph 24.133. 105 See para 24 of the Thames Valley case. 106 (2009) LP/31/2006. See para 24.83 above.

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Costs 24.140 24.137 Unreasonable behaviour may arise in relation to the substantive case where an objection is wholly without merit, as in Re Marcello Developments Ltd’s Application107 The objection (of a council) was found to be ‘wholly lacking in foundation’ and the valuation put forward on a claim made for compensation was ‘misconceived’. The objector in question was ordered to pay one-fifth of the applicant’s costs, in a case where there were other objectors, on the basis that this represented the extent to which its involvement had impinged on the hearing. 24.138 Where the application succeeds on ground (c), the Tribunal will bear in mind that ground (c) may be regarded as something of a ‘longstop against vexatious objections’ and ‘designed to cover the case of the, proprietorially speaking, frivolous objection’, to use the words of Russell LJ in Ridley v Taylor108 and where objections can properly be so described, the objectors may be ordered to pay the costs, as referred to in Re Crowe & Heaton’s Application.109

(f)  Offers to settle (sealed offers) 24.139 A party to proceedings before the Tribunal may make an offer to settle all or part of the proceedings or a particular issue on specified terms. PD paragraph 12.7(1) provides that: ‘Neither the offer nor the fact that it has been made may be referred to at the hearing if it is marked with “without prejudice save as to costs” or similar wording, or if it is said to be a “Calderbank” offer.’ 24.140 By PD paragraph 12.7(1), offers to settle part of proceedings or a particular issue: (a) must clearly identify which part of the proceedings or the issue that it relates to; (b) should state whether or not the offer is open for acceptance indefinitely or for a specified period of time; (c) should state whether or not, in relation to any sums payable, they include interest (if claimed), at what rate and for what period it covers; (d) should state whether or not it includes agreement to pay the other party’s costs and either the amount or the basis of those costs. The party making an offer to settle must send a copy of it to the Tribunal in a sealed envelope enclosed with a cover letter. The member(s) hearing the case will then not see the offer (which will remain in its sealed envelope separate from the Tribunal’s case file passed to the member(s)) or be informed of its existence until after the proceedings have been determined. Only then will the Tribunal, if invited to do so, take the offer into account when considering the question of the costs of the proceedings (PD paragraph 12.7(3)).

107 (2001) LP/18/1999 and LP/31/2000. 108 [1965] 1 WLR 611. 109 (2008) LP/34/2006. Although there the objectors simply were not awarded their costs, as the applicants did not make any application against them ‘as a gesture of reasonableness’, though the Tribunal indicated that, had it been asked to do so, it would have made a award of costs in their favour (para 38).

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24.141  Procedure on application to UT under LPA 1925, s 84(1) 24.141 Where a party has made an offer to settle which is as favourable, or more favourable, than the outcome of the proceedings, which the opposing party has unreasonably refused or failed to consider, then the usual costs order may be adjusted accordingly. For example, in accordance with PD paragraph 12.5(3), an objector will not normally be ordered to pay a successful applicant’s costs, but where the objector has failed to respond to a reasonable offer of settlement he may be ordered to pay the applicant’s costs from the time of that offer onwards  – as was previously done by the Lands Tribunal in Re Severn Trent Water’s Application.110 Similarly, in Re Nester’s Application,111 the Tribunal modified a covenant, under ground (aa), without compensation (the objection having been withdrawn due to the objector’s illness) and awarded costs against an objector who had failed to accept an offer of £10,000 or, effectively, to negotiate (and had herself sought extravagant compensation for a modification that would cause her no real injury).112 24.142 However, the mere fact that where a covenant is modified and compensation is awarded of less than the amount offered by the applicant to the objector in return for modification will not necessarily mean that it was unreasonable to refuse the offer – see, for example, Re Graham’s Application.113 24.143 In Stockport Metropolitan Borough Council v Alwiyah Developments,114 notwithstanding that an objector was awarded far less compensation than claimed, the Court of Appeal held there was no basis for requiring it to pay the applicant’s costs where the applicant had made no offer of compensation at all, and that the order the Tribunal ought to have made was one that each side bear their own costs. In such circumstances, an objector would have to continue to take part in the proceedings in order to obtain any compensation, notwithstanding he ought not to seek an excessive sum, so that the making of an offer at, or above, the level subsequently awarded ought to be considered by the applicant if he wishes to try to obtain a costs order in his favour on the basis of the objector’s conduct. 24.144 In Re Norfolk and Norwich University Hospital Trust’s Application,115 the terms of a modification were eventually agreed broadly in line with an offer made by the applicant. The Tribunal found that precise terms could reasonably have been concluded by fine tuning in advance of the hearing had the objector not  failed to respond to the offer, and the costs from the date by which the Tribunal considered such an agreement would have been able to have been reached were ordered to be paid by the objector.

110 111 112 113

(1994) 67 P&CR 236, see p 248. (2007) LP/58/2005 and LP/62/2005. See paras 73 and 74. (2008) LP/83/2005 – where the award was £23,500 but an open offer of £40,000 had not been accepted by the objector. 114 (1986) 52 P&CR 278. 115 (2002) LP/41/2001.

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Post-hearing action 24.148

Submissions in relation to costs 24.145 As specified in PD paragraph 12.9: ‘Where, as is almost invariably the case, the Tribunal issues a written decision  determining the substantive issues in the proceedings, this will be sent to the parties with an invitation to make written submissions as to costs. Following consideration of these submissions the Tribunal will issue an addendum to the decision determining the liability for costs. It may be possible, particularly where there are only two possible outcomes of the proceedings, for the Tribunal to invite submissions as to costs at the conclusion of the hearing. This procedure will be followed wherever possible. Where the issue of costs is particularly complicated the Tribunal may hold a costs hearing before making an award.’ Such costs are recoverable as if payable under an order of the High Court or county court (section 27 of the Tribunals, Courts and Enforcement Act 2007), so the modes of enforcement of both courts are available.

POST-HEARING ACTION Unregistered land 24.146 Where the Tribunal makes an order for the modification or discharge of  a restriction relating to unregistered land, then all that is necessary after the  order  has been drawn up is for it to be placed with the relevant title documents.116

Registered land 24.147 An application should be made to the Land Registry to amend the register in accordance with the order, which should be sent to it. If the tribunal discharges the covenant, the Land Registry will cancel the entry relating to the covenants completely. It will not make an entry in respect of the order as such unless it imposes new covenants or stipulations. 24.148 If the order modifies or only partially discharges the covenant(s), the Land Registry will make an entry in respect of the order along the following lines: ‘By an Order of the Upper Tribunal (Lands Chamber) dated … made pursuant to Section 84 of the Law of Property Act 1925 the restrictive covenants contained in the … dated … referred to above were [released to the following extent] [modified as follows: –].’

116 In the case of post-1925 restrictive covenants (not being covenants between landlord and tenant) which are registered in the register kept under the Land Charges Act 1972, if the effect of the order is to discharge the registered covenant in its entirety, an application could be made to the High Court for an order vacating the registration under s 1(6) of that Act but the Upper Tribunal has no power to make such an order – or any other order relating to the registration.

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24.149  Procedure on application to UT under LPA 1925, s 84(1) If the Land Registry considers it is impracticable to set out the terms of the release or modification, it will scan and file a copy of the order. 24.149 Where only some of the covenants have been discharged, it will make an entry along the following lines: ‘… the restrictive covenants contained in [clauses … of the … Schedule] to the … dated … referred to above were released.’ 24.150 The application should be made in Form AP1. A fee is payable in accordance with Schedule 3, Part 1(1)(b) to the Land Registration Fee Order 2013.117

117 SI 2013/3174.

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Part II Positive covenants and negative covenants which are not restrictive covenants

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25 Meaning of ‘positive covenants’ and of ‘negative covenants which are not restrictive covenants’ and frequency of use

INTRODUCTION 25.1 The essential characteristic of (i) positive covenants and (ii) negative covenants which are not restrictive covenants, is that they are both types of covenant which are not restrictive covenants. The importance of this is that the special rules that have been developed and enacted in relation to restrictive covenants (primarily relating to the running of the benefit and burden of them) do not apply to other covenants. It is therefore necessary to consider separately the rules which apply to other covenants. In this connection, there appears to be no difference, in terms of transmissibility, between (1) positive covenants and (2) negative covenants which are not restrictive covenants. However, because of the risk of confusion between negative covenants and restrictive covenants, it is considered useful to deal separately with the meaning of positive covenants and then to identify as a separate group, negative covenants which are not restrictive covenants.1

MEANING OF ‘POSITIVE COVENANT’ 25.2 A positive covenant is a covenant which is not a negative covenant.2 As such, it is one species of covenant which is not a restrictive covenant. A positive covenant is sometimes referred to in the reports of older cases as an ‘affirmative

1

2

Further, although the rules relating to the transmissibility of positive covenants and negative covenants which are not restrictive covenants are the same, the remedies will technically be different, specific performance generally being appropriate to the former and injunction to the latter. It is to be emphasised that the antithesis here is between positive covenants and negative covenants, not between positive covenants and restrictive covenants. As has been seen in Chapter 1, whilst all restrictive covenants are negative covenants, not all negative covenants are restrictive covenants.

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25.3  Meaning of ‘positive covenants’ and ‘negative covenants’ etc covenant’,3 and for the purposes of the present discussion, the two expressions will be treated as interchangeable. A covenant (or agreement) will be positive if compliance with its terms requires the performance of some act or the payment or expenditure of money. 25.3 Examples are a covenant to supply pure water to an adjoining landowner,4 to supply water for domestic purposes through pipes via a pump and to keep the pump and pipes in good working order and repair,5 to make up a road and keep it in repair,6 to construct certain roads and sewers,7 to contribute towards the expenses of repairing and maintaining a sea wall,8 to pay a fair share of the expense of maintaining and repairing roads and water drains,9 to make good the banks of a river and thereafter maintain the same;10 on notice being given, to brick up certain windows;11 to develop land according to a specific planning permission;12 to maintain a roof in wind- and water-tight condition;13 to construct a boundary wall.14 25.4 The question whether a covenant is positive or negative is one of substance and not of form. If compliance with the terms of the covenant requires the doing of some act or the payment or expenditure of money, then the covenant will be positive even though its language is expressed in purely negative terms. Thus, covenants not to allow a wall to fall into disrepair or not to allow a tree to grow beyond a certain height would each be positive.15 See further, Chapter 1, para 1.10 above.

MEANING OF ‘NEGATIVE COVENANTS WHICH ARE NOT RESTRICTIVE COVENANTS’ 25.5 As discussed earlier,16 negativity is just one of the conditions required for a covenant to qualify as a restrictive covenant. Another is that the covenant must be restrictive of the user of land.17 Accordingly, a negative covenant which prohibits the doing of an act which is unrelated to the user of land is not a restrictive covenant.18 3

See, eg Marquess of Zetland v Driver [1939] Ch 1 (Farwell J – who delivered the judgment of the Court of Appeal). 4 Sharp v Waterhouse (1857) 7 E&B 816. 5 Shayler v Woolf [1946] Ch 320, CA. 6 Austerberry v Oldham Corpn (1885) 29 ChD 750, CA. 7 Carpenters Estates Ltd v Davies [1940] 1 All ER 13. 8 Morland v Cook (1868) LR 6 Eq 252. 9 Cator v Newton [1940] 1 KB 415, CA. 10 Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500, CA. 11 Smith v Colbourne [1914] 2 Ch 533, CA. 12 Surrey County Council and Mole District Council v Bredero Homes Ltd (1991) 64 P & CR 57. 13 Rhone v Stephens [1994] 2 AC 310, HL. 14 Wigsell v School for Indigent Blind (1882) 8 QBD 357. 15 Cf Crawley v Wolff (1888) 4 TLR 434, CA. Conversely, covenants couched in positive language may be negative in substance: see para 1.10 above. 16 See Chapter 1. 17 For a consideration of all the requisite conditions, see Chapter 1 (and in relation to restriction of user, para 1.11 et seq). 18 The distinction has been by no means highlighted in the cases. In Shepherd Homes Ltd v Sandham (No 2) [1971] 1 WLR 1062, at 1071B it was adverted to by Megarry J but in the

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Common rules of transmissibility of all such covenants 25.8 25.6 Examples include a covenant not to sue for infringement of light, not to sell land for less (or alternatively more) than a specified sum or within a specified period,19 not to object to an application for planning permission,20 and not to sue for a particular nuisance.21 See also R (Khodari) v Royal Borough of Kensington and Chelsea Council22 (see para 31.34 below), where, in relation to a section 106 planning obligation, a requirement that no-one who occupied a property would apply for a resident’s parking permit, was held not to be restrictive of the use of the land. A further example of a negative covenant (which is not a restrictive covenant) is a right of pre-emption, ie a covenant not to sell without first offering the land to the grantee of the right.23 25.7 The question of whether a covenant not to sell particular land separately from other land already in the covenantor’s ownership is a restrictive covenant was expressly left open by the Court of Appeal in Caldy Manor Estate Ltd v Farrell.24 However, such a covenant not to dispose of land would not seem to be restrictive of the use of the land itself so as to amount to a restrictive covenant. Consistent with this, Lightman J in Crestfort Ltd v Tesco Stores Ltd25 indicated (at para 58) that a covenant against alienation was not in his view a restrictive covenant because it was not restrictive of user of land (considering, but discounting, the view to the contrary of Jacob J in Hemingway Securities Ltd v Dunraven Ltd  ).26

COMMON RULES OF TRANSMISSIBILITY OF ALL SUCH COVENANTS 25.8 As indicated above, (1) positive covenants and (2) negative covenants which are not restrictive covenants fall into the same category in the context of the rules relating to their transmissibility. Accordingly, references in subsequent particular context did not arise in an acute form and it was referred to by Russell LJ, delivering the judgment of the Court of Appeal in Caldy Manor Estates Ltd v Farrell (1974) 29 P&CR 238, CA. In Re Milius’s Application (1995) 70 P&CR 427, at 432, the President of the Lands Tribunal raised it in the context of s 84(1) of the Law of Property Act 1925. 19 Smith v Morgan [1971] 2 All ER 1500. 20 See Re Pearson’s Application (1978) 36 P&CR 285, at 287 and 294, LT. See, also, Fulham Football Club Ltd v Cabra Estates Ltd plc (1992) 65 P&CR 284 (where the Court of Appeal held this capable of being an enforceable contractual provision). 21 Groves v Loomes (1885) 53 LT 592. 22 [2018] 1 WLR 584. 23 See Manchester Ship Canal Co v Manchester Racecourse Co [1901] 2 Ch 37. This case and the separate treatment accorded to rights of pre-emption in s 2(4) of the Land Charges Act 1972 (re-enacting s 10(1) Class C of the Land Charges Act 1925) demonstrate that such a negative covenant is not a restrictive covenant. See further as to the nature of a right of pre-emption, Pritchard v Briggs [1980] Ch 338, CA, and see also University of East London Corporation v Barking and Dagenham London Borough Council and Others [2005] Ch 354, at para 28. Rights of pre-emption enjoy a special status whose consideration falls outside the scope of this volume. 24 [1974] 1 WLR 1303 at 1307F-G where specific preliminary issues fell for determination which did not include this. The court raised the point of its own volition, but made no ruling on it because counsel had not had the opportunity to fully argue the matter given that the points listed for determination issues did not include it. 25 [2005] L & TR 20. 26 (1996) 71 P&CR 30.

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25.9  Meaning of ‘positive covenants’ and ‘negative covenants’ etc chapters to positive covenants may be treated as including references to negative covenants which are not restrictive covenants. 25.9 What are being considered are, of course, freehold positive and negative covenants. In landlord and tenant cases, covenants of all types can generally be enforced between landlord and tenant by reason of privity of estate. Where there is no privity of estate the rules which apply are substantially the same as the rules in relation to restrictive covenants.27

FREQUENCY OF USE 25.10 Positive covenants are commonly found in deeds. In a 2015 survey,28 of 600 Land Registry titles examined, 41 per cent contained positive covenants. Of the 315 deeds then examined, the covenants dated from 1830 onwards, the general trend being upwards with the exception of the wars and the recent recession. Of these, most fell within three categories: erection and maintenance of a fence (72 per cent of the titles containing a positive covenant); contribution to maintenance (35 per cent), often of a shared access way; and maintenance of the appearance of the burdened property (18 per cent). It is clear from the percentage figures that a number covered more than just one matter. Most, presumably, if they have not fallen into abeyance, are dealt with as a matter of goodwill between property owners, whatever the legal position in relation to transmissibility. The rules are, however, to be applied in the event of dispute, and the extensive use of such covenants renders them of some importance.

27 Though not entirely identical – personal liability is now limited by the Landlord and Tenant (Covenants) Act 1995. Further, restrictive covenants in leases cannot be registered as land charges under the Land Charges Act 1972 even though they relate to land of the reversioner which is not comprised in the lease: Dartstone Ltd v Cleveland Petroleum Co Ltd [1969] 1 WLR 1807. 28 Emily Walsh and Cliff Morris, ‘Enforcing Positive Covenants: a practical perspective’, Conv 2015, 4, 316.

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26 Persons able to claim the benefit of positive covenants: (I) Original covenantees

INTRODUCTION 26.1 At common law, covenants as a class can generally only be enforced by the parties to the covenant and their heirs.1 This has two consequences: ●● ●●

first, with certain exceptions,2 a covenant cannot ordinarily be enforced by a person who is not a party to the deed;3 second, the benefit of the covenant cannot usually be assigned.4

However, in the case of covenants relating to land, the common law recognised that the benefit of such a covenant might be passed on to a subsequent owner of the land and both equity and statute have further widened the scope of enforceability. 26.2 The present chapter is concerned with the categories of person who can claim to be entitled as original covenantees. The circumstances in which subsequent owners and occupiers of the benefited land are entitled to enforce a positive covenant relating to land are dealt with in Chapter 27.

THE THREE CATEGORIES OF ORIGINAL COVENANTEE 1  Original covenantee by being named as a party 26.3 A person is within this category when he is named as a party to the instrument creating the covenant and the covenant, as a matter of construction, is

1 See Carnegie v Waugh (1823) 2 Dow & Ry KB 277 and the observations of Denning LJ in Drive Yourself Hire Co (London) Ltd v Strutt [1954] 1 QB 250, at 273. 2 Notable amongst these is the case of a covenant contained in a deed poll: see Cooker v Child (1673) 2 Lev 74; Chelsea and Walham Green Building Society v Armstrong [1951] Ch 853. 3 This was so even though the covenant was expressed to be for that third party’s benefit: Gilbey v Copley (1683) 3 Lev 138; Chesterfield and Midland Silkstone Colliery Co Ltd v Hawkins (1865) 3 H&C 677. The same rule is applied in equity: Colyear v Countess of Mulgrave (1836) 2 Keen 81; Re Flavell (1883) 25 ChD 89; Pullan v Koe [1913] 1 Ch 9. 4 See Holdsworth, History of English Law, vol VII, pp 659–660.

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26.4  Benefit of positive covenants: (I) Original covenantees intended to be made with that party.5 Since the covenant imposes no obligation on the covenantee, then in general it is not a requirement of enforceability that he should himself have executed the instrument.6 But if execution by the covenantee is a condition precedent to the legal obligation of the covenantor, then his nonexecution will bar enforcement.7

2 Original covenantee by virtue of section 5 of the Real Property Act 1845 or section 56(1) of the Law of Property Act 1925 26.4 The terms and operation of these provisions in relation to restrictive covenants have already been considered.8 The provisions apply equally to any restrictive or positive covenant ‘respecting any Tenements or Hereditaments’ (section 5 of the 1845 Act) or ‘respecting land or other property’ (section 56(1) of the 1925 Act). Their effect is to modify the common law requirement of a covenantee being ‘named as a party’ to the deed. All that is necessary is to show that, as a matter of construction, the benefit of the covenant is intended to be vested in the non party. To do this, the covenant must be shown to be intended to be made with a person who, at the date of the covenant, is in existence and is identified by name or description.9 26.5 Thus, a covenant by A with his vendor, B, that A will erect and maintain a fence for the benefit of C, an adjoining owner, whilst showing an intention that

5

On the latter point, if a covenant is expressed to be made with one or some only of the parties to a deed, then the fact that the provisions containing the covenant are preceded by some such words as ‘it is hereby agreed and declared as follows’ does not result in the covenant benefiting all the other parties to the deed: see Dawes v Tredwell (1881) 18 ChD 354, at 359. This case was concerned with the converse situtation raising the question whether, in such circumstances, all the parties to the deed would be treated as covenantors in respect of a covenant entered into by a specific party. Jessel MR said: ‘Anything more absurd than to hold it was a covenant by all of them could not be imagined’. See, also, Ramage v Womack [1900] 1 QB 116. 6 Foster and Wilson v Mapes (1590) Cro Eliz 212; Morgan v Pike (1854) 14 CB 473; Northampton Gas Light Co v Parnell (1855) 15 CB 630. In Morgan v Pike, the covenantee was held entitled to sue the covenantor who alone had executed the deed, notwithstanding the fact that there were cross-covenants on the part of the covenantee which formed part of the consideration for the covenants on the part of the covenantor. In such a case, the cross-covenants might have become enforceable, notwithstanding non-execution by the cross-covenantor, under the principle in Halsall v Brizell [1957] Ch 169 considered below at para 29.75. In the absence of execution by the covenantor, the covenant will not be binding on him at law but may be binding in equity if he takes the benefit of property under the same deed: see Formby v Barker [1903] 2 Ch 539, per Vaughan Williams LJ at 549 (restrictive covenant); Willson v Leonard (1840) 3 Beav 373 (covenants in an assignemnt of a lease enforceable by the assignor although the assignee did not execute the assignment). 7 Pitman v Woodbury (1848) 3 Exch 4; Swatman v Ambler (1852) 8 Exch 72. In each of these cases it would seem that execution by the covenantor of the deed as such was treated as complete (ie the deed was not treated as delivered in escrow) and that the condition precedent affected the enforcement, rather than the existence, of the deed. Execution by both parties may exceptionally be required by statute: see, eg s 2(3) of the Law of Property (Miscellaneous Provisions) Act 1989. It is assumed that s 1(2) of that Act has not altered the law as to the effects of non-execution by the covenantee. 8 See above, para 3.3 et seq. 9 See Re Ecclesiastical Comrs for England’s Conveyance [1936] Ch 430; Beswick v Beswick [1968] AC 58.

702

The three categories of original covenantee 26.8 C shall get the benefit of the fence, does not show an intention that C should have the benefit of the covenant (ie the chose in action). In order to show the latter, A would have needed to express himself as covenanting with B and also with C. The sections would then operate although C was not named as a party to the instrument creating the covenant. Again, a covenant by A ‘with B’s future successors in title in respect of B’s adjoining land’ that A will erect and maintain a fence on A’s boundary with that land would not enable any of such successors to enforce the covenant against A under the sections since they were not in existence and identifiable at the date of the covenant. 26.6 On the other hand, a covenant by A with B and also with an adjoining owner, C (not a party to the deed), to erect and maintain a boundary fence would enable C to enforce the covenant against A under either of the above sections as an original covenantee. 26.7 If entered into after 1925 (or before 1926 if the covenant had been expressed to be with C and his successors in title) it would also enable C’s successors to enforce the covenant in their capacity as successors obtaining the benefit from C10 where the rules contained in the following chapters are satisfied. However, as they were unascertained at the date of the covenant, this would not be as original covenantees under either section.

3  Original covenantee under a building scheme 26.8 As appears from the discussion on building schemes in Chapter 8, one of the effects of a scheme is that restrictive covenants entered into by a purchaser of one plot are deemed to be entered into with the then existing owners of all other plots and (but not as original covenantees) their respective successors in title. Accordingly, all such existing owners of plots are in the position of original covenantees.11 The development of the law relating to building schemes has been exclusively in the province of equity in relation to the enforcement of restrictive covenants. However, so far as concerns the obtaining and running of the benefit of positive covenants, there seems no reason why equity would treat positive covenants less favourably than restrictive covenants.12

10 In the case of the pre-1926 covenant, because the covenant was expressed to be made with C and his successors, and in the case of the post-1925 covenant because such words are deemed to be included by virtue of s 78(1) of the Law of Property Act 1925: see Re Ecclesiastical Comrs for England’s Conveyance, above. 11 For a full discussion of the position under a building scheme of existing plot owners and their successors in respect of covenants newly entered into, see Chapter 8. 12 It is only in the context of the running of the burden that the rules of building schemes would not apply by reason of the non-application to positive covenants of the doctrine of Tulk v Moxhay. See, further, Chapter 28 below.

703

704

27 Persons able to claim the benefit of positive covenants: (II) Subsequent owners and occupiers of the benefited land

INTRODUCTION TO THE COMMON LAW RULES 27.1 The earliest type of contractual benefit relating to land which the common law recognised as being transmissible was the warranty of title. If A conveyed an estate in land to B with warranty, this imposed an obligation on A, if called upon, to defend his title to make the grant and if his defence should fail, to provide other land of equal value.1 From shortly after the Norman Conquest, the benefit and burden of such a warranty devolved upon the heir of A and the heir of B respectively.2 Further, at the time of Bracton, it had become settled that not only B’s heir, but also his assign, could, subject to certain conditions, enforce the warranty.3 Originally, however, B’s assign could only enforce the warranty if he could show, first, that the warranty had made express reference to assigns and secondly, that B’s heirs had failed.4 These conditions lend support to the suggestion of Bracton that an assign was allowed to sue because he was a quasi-heir.5 The assign’s cause of action was recognised, not because the warranty had been expressly given for his benefit, but because, the original grantee’s heirs having ceased to exist, the assign alone stood as the successor to the original grantee. The requirement that assigns should be referred to in the words of warranty was to ensure that the warrantor had given his consent to the widening of the class of potential successors (heirs plus quasi-heirs) – but the heirs were not thereby displaced so long as they continued to exist. However, the effect of the statute Quia Emptores in 1290, was that an heir’s right to succession in respect of land granted ‘to B and his heirs’ was displaced once B had disposed of his land and, following this change, it was held that an assign was entitled to vouch the original grantor to warranty without proof that the warrantor’s heirs

1 2 3 4 5

See Pollock and Maitland, History of English Law, vol II, pp 659–660. See Glanvil Lib. VII, c 2 (writing just over a century after the Norman Conquest). At the time of Bracton, however, A’s heir would only be bound by A’s warranty to the extent of any property devolving upon him: De Legibus Angliae, f 61a. For an early case, cited by Holdsworth, History of English Law, vol III, p 161, see Bracton’s Note Book, Case 804. De Legibus Angliae f 17b. Ibid. See also, Wendell Holmes, The Common Law, pp 373–374.

705

27.2  Benefit of positive covenants: (II) Subsequent owners/occupiers etc had failed.6 Thereafter what remained important was for the assign to be able to show that he was entitled to the same estate in the land as the original grantee. 27.2 The common law rules for the passing of the benefit of warranties having thus become established, they naturally provided the foundation for the development of conditions subject to which the benefit of other types of covenant7 relating to freehold land should be allowed to pass at common law to a subsequent owner of the land.8 In the absence of a body of modern case law, the precise number and extent of those conditions is somewhat obscure and it is possible to do no more than to seek to present the position so far as the existing state of the authorities permits. For that purpose, it is proposed first to consider the conditions which appear to have been laid down by the common law and then to consider the respects in which these conditions have been modified by statute or overwritten by equity.

COMMON LAW RULES FOR THE RUNNING OF THE BENEFIT OF A COVENANT 27.3 The rules in relation to the transmission of the benefit of a freehold covenant at common law (which apply equally to all forms of covenant, positive, negative, and restrictive) appear to be fivefold.

Rule 1: Performance of the covenant must have a distinct connection with (ie ‘touch and concern’) the land 27.4 Without this connection, the covenant would have no claim to qualify for special treatment, so that the benefit would not pass. In the celebrated case of The Prior of Pakenham (1368),9 counsel for the defendants described the covenant which would pass as one in which ‘the acquittance falls on the land, and not on the person.’ In modern parlance, the covenant must ‘touch and concern’ the land, that is (in even more modern parlance10) it must benefit the land of the covenantee by either affecting the land as regards the mode of occupation or be such as per se, and not merely from collateral circumstances, affects the value of the land.11 27.5 In the House of Lords case of P & A Swift Investments v Combined English Stores Group plc,12 Lord Oliver of Aylmerton (with whom the other Law

6 Bracton, De Legibus Angliae, f 17b. 7 The warranty was a covenant real since for its breach the warrantor was bound to provide land of equivalent value whereas other covenants relating to land were personal since (at common law) their breach sounded only in damages: Co Litt 384a (s) note. 8 See Wendell Holmes, The Common Law, p 378. 9 Pakenham’s Case (1368) YB 42 Edw 3 fo 3 pl 14. 10 Brightman LJ in Federated Homes v Mill Lodge Properties Ltd at p 604F referred to ‘the old fashioned expression, that it touched and concerned the land’. 11 See: Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500, per Tucker LJ at 506; Austerberry v Oldham Corpn (1885) 29 ChD 750; Shayler v Woolf [1946] Ch 320. For a full discussion on the meaning of this test, see para 1.20 et seq above. 12 [1989] AC 632.

706

Common law rules for running of the benefit of a covenant 27.6 Lords agreed) said,13 in the context of a landlord and tenant case (with notes in square brackets therefore added here to adapt it to the context of a freehold land covenants case) that: ‘[T]he following provides a satisfactory working test for whether, in any given case, a covenant touches and concerns the land: (1) the covenant benefits only the reversioner [dominant owner] for time being, and if separated from the reversion [dominant owner’s land] ceases to be of benefit to the covenantee; (2) the covenant affects the nature, quality, mode of user or value of the land of the reversioner [dominant owner]; (3) the covenant is not expressed to be personal (that is to say neither being given only to a specific reversioner [owner of the dominant land] nor in respect of the obligations only of a specific tenant [owner of the burdened land]).’ As stated above, this applies to positive, as well as other forms of covenant. Accordingly, the fact that the covenant is to pay a sum of money will not prevent it from touching and concerning the land so long as these three conditions are satisfied and the covenant is connected with something to be done on, or in relation to the land, as made clear in the P & A Swift Investments case. 27.6 ●● ●● ●● ●● ●● ●● ●● ●●

13 14 15 16 17 18 19 20 21 22

Examples of covenants which ‘touch and concern’ the land are: a covenant of indemnity14 or guarantee15 for a liability which relates to something which issues out of or is to be done on or to land; a covenant by a prior with the lord of a manor, which included a chapel, to celebrate weekly divine service in the chapel;16 a covenant to supply water through a pipeline to an adjoining landowner;17 a covenant to maintain a sea wall protecting land from flooding;18 a covenant to erect a footbridge over a railway giving access to land;19 a covenant to maintain the banks of a river protecting land from flooding;20 a covenant to contribute to the cost of maintaining roads and water drains serving land;21 a covenant to make up a road and keep it in repair.22

Ibid, at pp 642E–642F. Coparcener’s Case (undated) YB 42 Edw 3 fo 3 pl 14. See, now, s 189(2) of the Law of Property Act 1925. P & A Swift Investments v Combined English Stores Group plc [1989] AC 632 approving Kumar v Dunning [1989] QBB 193, CA. Pakenham’s Case, above. Sharp v Waterhouse (1857) 7 E&B 816; Shayler v Woolf [1946] Ch 320. Morland v Cook (1868) LR 6 Eq 252; Lyle v Smith [1909] 2 IR 58. Hubbard v Weldon (1909) 25 TLR 356. Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500. Cator v Newton and Bates [1940] 1 KB 415. Austerberry v Oldham Corpn (1885) 29 ChD 750. Lindley LJ thought that the language of the covenant was such that it did not touch and concern the covenantee’s plot to which the road gave access but added that different wording might have caused the covenant to run with the land. The main ground of the decision was that the burden of the covenant did not run with the land of the covenantor (the soil of the road) so as to bind the corporation as the subsequent owner of the road.

707

27.7  Benefit of positive covenants: (II) Subsequent owners/occupiers etc

Rule 2: The covenant must relate to clearly identifiable land 27.7 In Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board23 all three members of the Court of Appeal24 recognised the need for this requirement to be satisfied.25 No authority being cited as to whether the identification must be made in the deed itself, they held that extrinsic evidence was admissible to show precisely what land the covenantee owned at the time of the deed and (all of that land being ‘touched and concerned’) treated the covenant as applying to that land. It is to be observed that the deed in this case clearly showed that the covenantee owned some land but did not establish its precise extent or situation. This shortcoming was able to be made good by the application of the principle id certum est quod certum reddi potest (‘that is certain which can be made certain’). 27.8 This leaves open the question whether, if a deed makes no reference to the existence of any benefited land, extrinsic evidence would be admissible to establish both the existence and extent of the benefited land. However, it is considered that it would be necessary for the existence of the benefited land to be shown by the instrument imposing the covenant. 27.9 First, this appears consistent with the comments of Denning LJ at p 517 of Smith and Snipe Hall Farm Ltd, as follows: ‘It is true that the agreement did not describe the lands by metes and bounds, but it did give a description of them which was capable of being rendered certain by extrinsic evidence; and that is sufficient. Id certum est quod certum reddi potest.’ 27.10 Second, the point would appear to be covered by the same practical considerations as in the case of annexation in relation to restrictive covenants set out by the Court of Appeal in Crest Nicholson Residential (South) Ltd v McAllister.26 At paragraph 34, Chadwick LJ for the Court, said: ‘A restrictive covenant affecting land will not be enforceable in equity against a purchaser who acquires a legal estate in that land for value without notice of the covenant. A restrictive covenant imposed in an instrument made after 1925 is registrable as a land charge under class D(ii): section 10(1) of the Land Charges Act 1925 and, now, section 2(5) of the Land Charges Act  1972. If the title is registered, protection is effected by entering notice of the restrictive covenant on the register: section 50 of the Land Registration Act 1925 and, now, section 11 of the Land Registration Act 2002. Where practicable the notice shall be by reference to the instrument by which the covenant is imposed and a copy or abstract of that instrument shall be filed at the registry: section 50(1) of the land Registration Act 1925 and section 3(5) of the Land Charges Act 1972. It is obviously desirable that a purchaser of land burdened with a restrictive covenant should be able not only to ascertain, by inspection of the entries on the relevant register,

23 [1949] 2 KB 500, see above, and see also para 27.18 below. 24 Tucker, Someville and Denning LJJ. 25 Further, without the land being identified, it would not have been possible to tell whether the covenantee held a legal estate in that land (see Rule 3 below) or whether the successor in title owned an estate (or, pre-1926, the same estate) in such land (see Rule 4 below). 26 [2004] 1 WLR 2409.

708

Common law rules for running of the benefit of a covenant 27.13 that the land is so burdened, but also to ascertain the land for which the benefit of the covenant was taken-so that he can identify who can enforce the covenant. That latter object is achieved if the land which is intended to be benefited is defined in the instrument so as to be easily ascertainable. To require a purchaser of land burdened with a restrictive covenant, but where the land for the benefit of which the covenant was taken is not described in the instrument, to make inquiries as to what (if any) land the original covenantee retained at the time of the conveyance and what (if any) of that retained land the covenant did, or might have, “touched and concerned” would be oppressive. It must be kept in mind that (as in the present case) the time at which the enforceability of the covenant becomes an issue may be long after the date of the instrument by which it was imposed.’ 27.11 Although this was said in relation to annexation of restrictive covenants27 to avoid such oppression the same reasoning would appear to apply. It is consistent with the words of Denning LJ just quoted, and provides good reason why the land needs to be identified by some description or reference to it in the conveyance or other instrument itself, although aided, if necessary, by external evidence to identify the land so described or referred to.28

Rule 3: The covenant must have been entered into with the owner of the legal estate in the land which is to be benefited 27.12 Lord Coke twice stated the necessity for this requirement29 and it is supported by at least two cases. In Horne’s Case,30 Markham J said: ‘In a writ of covenant one must be privy to the covenant if he would have a writ of covenant or aid by covenant. But peradventure, if the covenant had been made with the lord of the manor, who had inheritance in the manor … it would be otherwise’. 27.13 In Webb v Russell,31 A and B, who were respectively the mortgagor and mortgagee of a lease for a term of 99 years, together granted a sub-lease to C. Although B was a party to the sub-lease, the covenants for the payment of rent and to repair were entered into by C with A alone. Later, the head-lease and the freehold reversion on the head-lease became vested in X who sought to enforce the covenant to repair contained in the sub-lease. The action failed on two grounds. First, because the leasehold reversion expectant upon the sub-lease

27

28 29

30 31

And see Re Union of London and Smith’s Bank Ltd’s Conveyance [1933] Ch 611 which held it to be necessary in that context for the existence of benefited land to be shown by the instrument imposing the covenant (though cf the position if express assignment can be shown, where it has been held that extrinsic evidence is admissible to show the existence, as well as the extent, of the benefited land: Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd [1952] Ch 286. See, further, para 6.7 et seq above. As referred to at para 45 of Crest Nicholson. Co Litt 385a (y); 5 Co Rep f 18a. At the former reference, after referring to Pakenham’s Case, Lord Coke states: ‘But if the covenant had beene with a stranger to celebrate divine service in the chappell of A and his heires, there the assignee shall not have an action of covenant; for the covenant cannot be annexed to the mannor, because the covenantee was not seised of the mannor’. (1401) YB 2 Hen IV fo 6 pl 25. (1789) 3 Term Rep 393.

709

27.14  Benefit of positive covenants: (II) Subsequent owners/occupiers etc had ceased to exist by reason of the merger of that reversion in the freehold.32 Second, and more significantly, because the covenant had been entered into with the mortgagor A, who had a mere equity of redemption, and not with B who alone, as mortgagee by assignment, had the legal term of 99 years vested in him. Although this case turned on the enforcement of a covenant in a lease, on the second point the decision appears to have been based on the law of covenants generally. Accordingly, where the original covenantee had merely an equitable interest in that land, that would be insufficient and the benefit would not pass at law. Following the Supreme Court of Judicature Act 1875, this is no longer so, however (see para 27.30 et seq below).

Rule 4: The person seeking to enforce the covenant must have a legal estate in the land (and pre-1926, must have the same legal estate as the original covenantee) 27.14 There is no doubt that in the case of the old warranty of title, the person to be benefited had to have the same estate in the land as that of the original grantee.33 Coke stated the effect of the cases as follows:34 ‘As if a man hath a warrantie to him, his heires, and assignes, and he make a lease for life, or a gift in taile, the lessee or donee shall not vouch as assignee, because he hath not the estate in fee simple whereunto the warranty was annexed.’ However, it is by no means clear whether the rule is one of law or one of the intention of the parties. The uncertainty is compounded by the fact that early on, covenants were described as effective where ‘running with the land’ rather than (if such were intended) running with a particular estate in the land.35 That clearly gave rise to the possibility (realised in the case of the benefit of easements) that the benefit of the covenant accrues to any person having some interest in the land. 27.15 In Pakenham’s Case,36 although there was no actual decision on the point, the covenant was made with the fee simple owner of the manor ‘and his heirs’ and the action on covenant being allowed at the instance of a tenant in tail.37 32

After the Real Property Act 1845, such a merger would not present any bar to an action on the covenants in the sub-lease: see, now, s 139 of the Law of Property Act 1925. However, that section has no application where the head lease is either forfeited or is determined by notice to quit: as to the latter, see Pennell v Payne [1995] 2 All ER 592, CA. 33 See Chudleigh’s Case (1595) 1 Co Rep 120a at 122b, sub nom Dillon v Freine Poph 70. 34 Co Litt 385a. 35 See Co Litt 384b referring to ‘a covenant annexed to the land’ and (ibid 385a) as an assignee having an action of covenant ‘because the acquitall did runne with the land’. Section 80(2) and (3) of the Law of Property Act 1925 refer to covenants running with the land but sub-s (4) declares that ‘For the purposes of this section, a covenant runs with the land when the benefit or burden of it, whether at law or in equity, passes to the successors in title of the covenantee or the covenantor, as the case may be’. Section 189(2) of the same Act refers to certain covenants of indemnity being ‘annexed to the land to which the indemnity is intended to relate’ but then provides that such covenants ‘may be enforced by the estate owner for the time being of the whole or any part of that land’. 36 See above. 37 A tenant in tail could not enforce a warranty given to a grantee ‘and his assigns’: Co Litt 385a. See the passage cited in the text above.

710

Common law rules for running of the benefit of a covenant 27.19 27.16 Westhoughton Urban District Council v Wigan Coal and Iron Co Ltd38 concerned an action by a lessee for a term of 30 years for damages for breach of a covenant entered into with his freeholders ‘and their assigns’. The actual decision went on other grounds but the judgments contain observations on the question of the locus standi of a lessee. Swinfen Eady MR said:39 ‘In cases, however, not arising between landlord and tenant I am of opinion that a lessee (who is not an express assignee of the benefit of the covenant) is not an ‘assign’ of an owner in fee for the purpose of obtaining damages for breach of a covenant entered into with such owner in fee, his heirs and assigns.’ Duke LJ was less inclined to exclude a lessee from the benefit of a covenant expressed in those terms though he found it unnecessary to express a concluded opinion. The arguments and judgments both seem to have concentrated their attention on the question whether as a matter of construction the lessee qualified as an ‘assign’40 and no consideration was given to the fundamental issue whether as a matter of law the covenant could so run even if expressed to do so.41 27.17 Accordingly, the rule could be regarded not as one of law but simply one of the intention of the parties, able to be displaced by evidence of an intention for the benefit to run in favour of derivative estates or interests. 27.18 Notwithstanding this, in Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board,42 Denning LJ referred to the position at common law as follows: ‘It was always held, however, at common law that, in order that a successor in title should be entitled to sue, he must be of the same estate as the original owner. That alone was a sufficient interest to entitle him to enforce the contract. The covenant was supposed to be made for the benefit of the owner and his successors in title, and not for the benefit of anyone else.’ 27.19 However, this requirement (that the subsequent owner must have the same legal interest as the original covenantee) was held to have been removed by section 78 of the Law of Property Act 1925, which provides that a covenant relating to any land of the covenantee shall be deemed to be made with the covenantee and his successors in title, ‘“and the persons deriving title under him or them” and shall have effect as if such successors “and other persons” were expressed’: see, eg Denning LJ at the foot of p 516 in the Smith and Snipes Hall Farm Ltd case. Accordingly, in relation to post-1925 covenants, this has abrogated the common law requirement that the same legal interest must be held.

38 [1919] 1 Ch 159, CA. See, also, South of England Dairies Ltd v Baker [1906] 2 Ch 631. 39 [1919] 1 Ch 159, at p 171. 40 In the restrictive covenant case of Taite v Gosling (1879) 11 ChD 273, a lessee was held entitled to enforce a covenant entered into with the lessor his ‘heirs and assigns’. 41 To the like effect on the point of construction is the case of South of England Dairies v Baker [1906] 2 Ch 631. 42 [1949] 2 KB 500.

711

27.20  Benefit of positive covenants: (II) Subsequent owners/occupiers etc

Rule 5: The covenant must show an intention that its benefit shall run with the land 27.20 From early times, it seems that provided a covenant, taken as a whole, shows an intention that the benefit shall run with the land,43 this is sufficient without any reference to successors.44 In Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board,45 Tucker LJ stated in clear terms that once it has been shown the covenant ‘touches or concerns’ the land, ‘it must then be shown that it was the intention of the parties that the benefit thereof should run with the land’. The judgments of Somervell LJ (at p 511) and Denning LJ (at pp 516–7) also suggest this. 27.21 The question whether, in the absence of express words, any particular covenant shows such an intention is not always easy to determine, however, as the case of Smith and Snipes Hall Farm itself shows. In Smith and Snipes Hall Farm, the defendant board covenanted to widen, deepen and make good the banks of Eller Brook ‘and maintain for all time the work when completed’. At first instance, Morris J regarded the contractual obligations of the board as not differing from those which a firm of contractors might undertake. This decision was unanimously reversed by the Court of Appeal, the court finding that the obligation to maintain the work for all time showed the requisite intention the obligation should run with the land. 27.22 In P & A Swift Investments v Combined English Stores Group plc,46 Lord Oliver of Aymerton did not specifically mention the need for this, though he did say in relation to the question of whether the covenant ‘touched or concerned’ the land, on which the House was focused, that the covenant must not be expressed to be personal. Some47 have doubted on this basis whether there is any such requirement. However, the Court of Appeal case of Smith and Snipes Hall Farm Ltd was cited to the House of Lords in P & A Swift Investments and there was no statement any part of the law as laid down in it was being overruled. Further, as it concerned a post-1925 covenant, no issue in relation to this arose because of section 78 of the Law of Property Act 1925. 27.23 In relation to covenants entered into after 1925, covenants ‘relating to any land of the covenantee’ are by section 78 of the Law of Property Act 1925 deemed to be made also with successors in title of the covenantee, so that this requirement is automatically fulfilled (as confirmed, for example, by Smith and Snipes Hall Farm Ltd48).

43 44

45 46 47 48

712

Ie identifiable land – see Rule 2 above. Pakenham’s Case, above; Co Litt 385a (x); Laugher v Williams (1672) 2 Lev 92. In Pakenham’s Case the covenant was with the lord of the manor and his heirs but a subsequent owner (the covenantee’s younger grandchild) who was not the heir was held entitled to enforce it by action of covenant. [1949] 2 KB 500. [1989] AC 632. Such as the current editors of Megarry and Wade, The Law of Real Property (8th edn, Sweet & Maxwell), at para 32-012. For a clear statement, see the judgment of Denning LJ at pp 616–617.

Common law rules for running of the benefit of a covenant 27.26 27.24 In relation to pre-1926 covenants, the nature of the clause as well as what it says needs to be considered, as shown by the decision of the Court of Appeal in Shayler v Woolf.49 There, Mrs Woolf agreed in writing that she would ‘henceforth supply to [Mrs Peacock] … a regular and continuous supply of water’ from a pump on Mrs Woolf’s land, for all domestic purposes in connection with the bungalow then in the course of erection on Mrs Peacock’s land and would ‘henceforth maintain and keep the pump and the pipes … in good and proper working order and repair’. The agreement as to the maintenance and repair of the pump was expressed to be made by Mrs Woolf ‘with intent to bind so far as may be herself and her successors in title’. No reference was made to Mrs Peacock’s successors in title and the agreement provided for the submission of any disputes to arbitration. Mrs Peacock sold the bungalow to Mr Shayler and simultaneously assigned the benefit of the agreement to him. It was argued that the agreement was not assignable and did not pass to Mr Shayler since (i) it was not in terms expressed to extend to assigns and (ii) the arbitration clause precluded its assignment. In relation to point (i), Lord Greene MR (with whom the other members of the court agreed) said:50 ‘Looking at the whole nature of the subject-matter, it seems to me impossible that any sensible persons could have intended in the circumstances that the right to this supply should be personal to Mrs Peacock herself. I come to that conclusion quite clearly, notwithstanding the fact that in clause 4 there is an express reference, for the purpose of the repairing covenant, to the assigns of Mrs Woolf.’ On point (ii), it was held that there was nothing in principle or authority which prevented the arbitration clause following the assignment of the subject-matter of the agreement and accordingly that its existence did not prevent the benefit of the agreement from passing to Mr Shayler.

The effect of all five rules being satisfied 27.25 Whilst it is not certain that in any particular case all five of the above characteristics would be insisted upon as a precondition to the running of a positive covenant at common law, what can be said is that if a covenant satisfied all five rules, then the basis for the running of its benefit was established. It should be added that unlike the position with restrictive covenants and easements, it is not necessary for the creation of a transmissible positive covenant that the covenantor should himself own or have owned, any land.51 27.26 This leaves the question whether, when the benefited land was disposed of, the benefit of the covenant passed automatically to the assignee of the land or whether it had to be expressly assigned. The answer seems to be that the

49 [1946] Ch 320, CA. 50 Ibid, at p 322. 51 See Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500, where the argument of the defendant board that the benefit of its covenant to maintain the banks of Eller Brook could not run because the board owned no relevant land was firmly rejected.

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27.27  Benefit of positive covenants: (II) Subsequent owners/occupiers etc benefit passed automatically.52 Whilst, in some of the cases where the claimant succeeded, there has been an express assignment of the benefit of the covenant,53 in others there has been no such assignment and nothing seems to have turned on the matter in any of the cases. On this point, the common law appears to have been more liberal than equity in its requirements for the passing of the benefit of a covenant. As has been seen in Chapter 4, unless a restrictive covenant has been annexed to the benefited land or entered into under a building scheme, the benefit of it will not pass in equity without an express assignment.54

MODIFICATION OF THE COMMON LAW RULES BY EQUITY AND STATUTE 27.27 Prior to 1875, the common law courts and the Court of Chancery each developed their own distinct rules relating to the passing of the benefit of covenants. With effect from the beginning of that year, the two sets of courts were merged into the Supreme Court of Judicature consisting of the High Court and the Court of Appeal.55 Thereafter, all divisions of the High Court, together with the Court of Appeal, were required to administer justice by applying both the rules of equity and the rules of common law relevant to the disposal of the case. Where in their application to any given case, those rules produced different results, then the rules of equity were to prevail. This position remains and is currently provided for by section 49(1) of the Senior Courts Act 198156 which provides that: ‘(1) Subject to the provisions of this or any other Act, every court exercising jurisdiction in England or Wales in any civil cause or matter shall continue to administer law and equity on the basis that, wherever there is any conflict or variance between the rules of equity and the rules of the common law with reference to the same matter, the rules of equity shall prevail.’ 27.28 Taking each of the common law rules in turn, the effect of the application of the equitable rules and statute would seem to be as follows. Rule 1 remains the same (as the position in equity was the same as at law).57 27.29 In relation to Rule 2, section 78(1) of the Law of Property Act 1925 impinges on this rule and (so far as material) provides as follows: ‘(1) A covenant relating to any land of the covenantee shall be deemed to be made with the covenantee and his successors in title and the persons deriving title under him or them, and shall have effect as if such successors and other persons were expressed.’

52 See Pakenham’s Case (1368) Co Litt 385a; Westhoughton UDC v Wigan Coal and Iron Co Ltd [1919] 1 Ch 159 (referred to above). 53 See, eg, Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board, above, so far as concerns the first plaintiff (Smith) but not the company plaintiff, and Shayler v Woolf [1946] Ch 320. 54 Re Union of London and Smith’s Bank Ltd’s Conveyance [1933] Ch 611. Furthermore, as that case held, the assignment must be simultaneous with the disposition of the benefited land. 55 By the Supreme Court of Judicature Act 1873. 56 Re-enacting s 44 of the Supreme Court of Judicature (Consolidation) Act 1925 which re-enacted s 25(11) of the Supreme Court of Judicature Act 1873. 57 See, as to restrictive covenants, Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd [1952] Ch 286.

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Modification of the common law rules by equity and statute 27.33 27.30 In relation to Rule 3, the position is that the covenant need not have been entered into with the owner of a legal interest in the land to be benefited, and so long as the owner of the land to be benefited has some interest in the land, that will be sufficient. Equity treated a covenant entered into with the owner of an equitable interest in the land as having the same degree of transmissibility to the extent of that interest as would have applied had the covenantee been the owner of the corresponding legal estate. The rule which was evolved in equity was stated by Collins LJ, delivering the judgment of the Court of Appeal in Rogers v Hosegood,58 as follows: ‘… when the covenant was clearly made for the benefit of certain land with a person who in the contemplation of such a court [of equity] was the true owner of it, it would be regarded as annexed to and running with that land, just as it would have been at law but for the technical difficulty.’ The ‘technical difficulty’ referred to was that the covenants in question had been entered into with a mortgagor of the land who had conveyed the legal estate by way of mortgage to a third party so that the mortgagor’s interest in the land consisted only of an equity of redemption. 27.31 More generally, Farwell J, at first instance in the same case, expressed the position thus: ‘Covenants which run with the land must … be made with a covenantee who has an interest in the land to which they refer’.59 It follows that the decision on this point in Webb v Russell would now be decided the other way. 27.32 In addition, in relation to post-1925 covenants, by section 205(1)(ix) of the Law of Property Act 1925, ‘land’ includes incorporeal hereditaments and an ‘easement, right, privilege, or benefit in, over, or derived from land’. Accordingly, in so far as section 78(1) has substantive effect in making the benefit of a covenant run in favour of all the persons with whom the covenant is deemed to be made,60 it is sufficient that the covenantee has an interest in the land of any of the above kinds. 27.33 In relation to Rule 4, as indicated above, the lack of clear-cut authority on the point leaves it uncertain whether this is a common law rule of law or a rebuttable presumption which could be displaced by evidence of an intention that the benefit may run in favour of derivative estates and interests. There is a similar lack of clear-cut authority in the cases involving the application of purely equitable principles, but Taite v Gosling61 suggests this is also so. In Taite v Gosling, the purchaser of a house on an estate covenanted with his vendors and their assigns and with the owners of adjoining lots and their respective heirs and assigns not to carry on a certain trade. The plaintiff was the lessee of one of such lot owners and sought an injunction to enforce the covenant. It was held that the plaintiff was an ‘assign’ within the meaning of the covenant and an injunction was granted. The presumption is in favour of general enforceability. It should be added that although the benefit of a covenant

58 59 60 61

[1900] 2 Ch 388, at 404. Ibid, at p 395 (italics interpolated). As to which, see para 27.29 above. (1879) 11 ChD 273.

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27.34  Benefit of positive covenants: (II) Subsequent owners/occupiers etc may be annexed or deemed to be annexed to the benefited land, such annexation does not itself give free range to enforcement by any person who may have some interest in the land. Annexation merely ensures that those persons who are within the scope of the benefit of the covenant will take such benefit without the need for an express assignment.62 27.34 In the case of post-1925 covenants, as indicated above, section 78(1) of the Law of Property Act 1925 has the effect of making the benefit of a covenant run in favour of all the persons with whom the covenant is deemed to be made, ie ‘the covenantee and his successors in title and the persons deriving title under him’ so that other interests are sufficient: see Smith and Snipes Hall Farm Ltd. Accordingly, in the case of covenants entered into after 1925, unless section 78(1) is effectively excluded,63 and subject to it being shown that the covenant is one ‘relating to any land of the covenantee’,64 any person having the same estate in the land as the original covenantee or having a lesser estate or interest in the land derived from the original covenantee or any successor, will be entitled to enforce the covenant. This would accordingly include the owner of any equitable interest in the land as well as lessees and periodic tenants.65 However, licensees, whether contractual or otherwise, do not acquire any proprietary interest in the licensor’s land66 and as mere occupiers they would not, in the absence of an express provision in the terms of covenant showing an intention to include them,67 be entitled to enforce a positive covenant.68 27.35 In relation to Rule 5, equity, like the common law, requires to be satisfied, either from the wording of the covenant or its nature and the circumstances in which it is entered into, that it is intended to be not merely personal to the covenantee but transmissible. Under both common law and equity, if the covenant touches and concerns land, then it will be readily assumed that it is intended to be transmissible with the land. 27.36 Further, in the case of covenants relating to land of inheritance69 entered into after 1881 and before 1926, section 58 of the Conveyancing Act 1981 provides that they are deemed to have been made ‘with the covenantee, his heirs and assigns’. These words will therefore show the requisite intention for permitting the covenant to be passed on to ‘heirs and assigns’.

62

Annexation is one mechanism by which the benefit of a covenant can be made to pass without express assignment. But the words of covenant, or its nature and the surrounding circumstances, must, as a matter of construction, or of prima facie presumption, still govern the categories of assignees who are intended to receive that benefit. 63 As to which, see para 6.42 et seq above. 64 As to which, see para 6.28 et seq above. 65 In Smith’s case, the only claim was for damages. If a weekly or other tenant claimed an injunction, the order, if made, would presumably be limited to the duration of the plaintiff’s interest: cf Simper v Foley (1862) 2 John & H 555; Jacomb v Knight (1863) 32 LJ Ch 601. 66 See National Provincial Bank Ltd v Ainsworth [1965] AC 1175. 67 Or possibly an express assignment to a particular occupier. 68 It appears to be otherwise in the case of the enforcement of a restrictive covenant since, in such a case, s 78(1) of the Law of Property Act 1925 declares that the expression ‘successors in title’ shall be deemed to include ‘the owners and occupiers for the time being of the land intended to be benefited’. 69 Ie, not leaseholds or life interests.

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The Contracts (Rights of Third Parties) Act 1999 27.39

Greater stringency of equity in one respect 27.37 Notwithstanding the above, in one respect the approach adopted by equity in relation to the running of the benefit of restrictive covenants appears to be more stringent than that adopted by the common law in relation to positive covenants. In equity, in the absence of annexation or a building scheme, the benefit will not pass with the benefited land in the absence of a simultaneous express assignment.70 However, as previously noted,71 at common law, once the requirements for transmissibity are established, the benefit will pass automatically (on a disposition to a person within the scope of the covenant). 27.38 It has not been decided whether (apart from cases to which the provisions of section 78(1) of the Law of Property Act 1925 apply72) the absence, in the case of a positive covenant, of any words of annexation (or a building scheme) will necessitate an express assignment for the benefit to pass.73 If an assignment is made then the requirements of section 136 of the Law of Property Act 1925 should be observed to place the assignee in the best possible position. In the case of post-1925 covenants which satisfy the requirement of ‘relating to any land of the covenantee’, section 78(1) of the Law of Property Act 1925 will be invoked unless it has been effectively excluded.74 Where it applies it automatically shows the requisite intention for permitting the transmissibility of the covenant amongst the wider categories of person considered above.75

THE CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 27.39 In relation to covenants entered into on or after 11 May 2000, the Contracts (Rights of Third Parties) Act 1999 provides that, subject to the provisions of the Act, a person who is not a party to a contract (‘third party’) may in his own right enforce a term of the contract (which includes a covenant). This does not affect covenants already existing at the date the Act comes into force, but could clearly be of considerable importance in relation to such successors in title having the benefit of the land covenant. There is no requirement for the covenant to ‘touch and concern’ land, or be purely negative, let alone restrictive in nature. In relation to the Act, see further, para 3.9 et seq above.

70 Though in relation to covenants entered into after 1925, the effect of s 78 of the Law of Property Act 1925 is effectively to give automatic annexation in relation to all covenants: see Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594, above, para 6.31 et seq. 71 See para 27.26 above. 72 As to which, see footnote 70 above. 73 This would seem to depend upon whether the benefit of a positive covenant and the benefit of a restrictive covenant are regarded as ‘the same matter’ for the purposes of s 49(1) of the Supreme Court Act 1981. In the cases relating to the running of the benefit, there seems no reason for supposing that any particular importance was attached to the fact that the court was considering a restrictive rather than a positive covenant: see, eg Rogers v Hosegood [1900] 2 Ch 388. In the more recent cases on positive covenants, there has in fact been an express assignment: see, eg Shayler v Woolf [1946] Ch 320 and Smith and Snipes Hall Farm Ltd v River Doughs Catchment Board [1949] 2 KB 500. 74 As to its exclusion, see Roake v Chadha [1984] 1 WLR 40 and above, para 6.42. 75 And see the judgments of Tucker and Denning LJJ in Smith and Snipes Hall Farm v River Douglas Catchment Board [1949] 2 KB 500.

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27.40  Benefit of positive covenants: (II) Subsequent owners/occupiers etc

TRANSMISSION OF BENEFIT ONLY 27.40 The common law rules in relation to the transmission of the benefit of a covenant are clearly important where a covenant other than a restrictive covenant (ie one restrictive of the use of the land) is involved, that is, where there is merely a negative covenant which is not a restrictive covenant or a positive covenant. Generally speaking,76 they are now the same as the rules in equity in relation to the transmission of the benefit of the covenant.

Special cases 27.41 Certain specific covenants are statutorily given a special status of transmissibility: see, for example, sections 64(3), 77(5) and 189(2) of the Law of Property Act 1925.

76

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Subject to the point made at para 27.37 above.

28 The burden of positive covenants

INTRODUCTION 28.1 It is clear from the cases considered in the previous chapter that a positive covenant may benefit (‘touch and concern’) the land of the covenantee in one of three different ways, namely: (1) in requiring the covenantor to do something on the covenantee’s land, as in Pakenham’s Case;1 or (2) in requiring the covenantor to make a payment in respect of some liability issuing out of the covenantee’s land, as in the case of a covenant of indemnity against a rentcharge;2 or (3) in requiring the covenantor to do something on the covenantor’s land, such as a covenant to erect a footbridge over a railway, giving access to the covenantee’s land,3 or a covenant to make up a road and keep it in repair,4 or to erect a fence along a boundary of the covenantor’s land.5 28.2 In the case of the first two types of covenant, there is no question of any land of the covenantor being affected by the covenant. The covenant is entered into by him in gross and the question of the burden of the covenant running with any land of the covenantor cannot arise.6 28.3 However, in the case of covenants of the third type, where performance requires something to be done on the covenantor’s land, the question arises whether, assuming the covenant is made by the covenantor with the intention of binding the land into whosoever’s hands it shall come, the burden of the covenant will run with the covenantor’s land. The answer is that (in the absence of some special method being used to achieve this – as to which, see Chapter 29), it will not, for the reasons discussed below.

1 (1368) YB 42 Edw 3 fo 3 pl 14. 2 See, now, s 189(2) of the Law of Property Act 1925. 3 Hubbard v Weldon (1909) 25 TLR 356. 4 Austerberry v Oldham Corpn (1885) 29 ChD 750. 5 See Potter v Perry (1859) 23 JP 644. 6 It is clearly established that, unlike the position with restrictive covenants, the fact that a covenant does not affect any land of the covenantor does not prevent a covenant from running with the land of the covenantee: see Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500.

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28.4  The burden of positive covenants

BACKGROUND TO THE RULE LAID DOWN IN AUSTERBERRY v OLDHAM CORPN7 28.4 As Wendell Holmes suggested,8 it seems likely that had the common law courts been called upon to decide this question in the early stages of the development of the law of covenants, they would have answered it in the affirmative. The model taken for the early development of the law of positive covenants was the warranty as to title. Such a warranty might either be personal or real – in the latter case, particular land was earmarked by the warranty to replace the land granted with warranty in the event of the title to that land proving defective.9 The theory of succession used by Bracton to explain the passing of the benefit of a covenant to assigns might equally well have been applied to the passing of the burden in those cases where the burden factually fell on the covenantor’s land.10 In this way, a positive covenant whose performance fell on the covenantor’s land might well have been held to be a ‘real’ covenant which ran with the covenantor’s estate in the land.11 However, it appears that it was not until the second half of the 19th century that this question came to be considered as a matter of principle by the courts.12 28.5 In the vendor and purchaser case of Potter v Perry,13 where a former owner of land contracted to be sold had covenanted to make and maintain certain boundary fences, the question whether the burden of the covenant ran with the land was held to be too doubtful to admit of the title being forced upon the purchaser. In Morland v Cook,14 Lord Romilly MR, sitting in a court of equity before 1875, appears to have ventured close to extending the principle in Tulk v Moxhay15 to positive covenants; and in Cooke v Chilcott16 in 1876 Malins V-C, sitting in the Chancery Division of the newly-created High Court of Justice, expressed the opinion that the burden (as well as the benefit) of a covenant to erect a pump and reservoir and to supply water to all houses intended to be built on adjoining land ran with the land although he decided the case on another point. 28.6 However, these tentative encouragements to the idea of the burden of a positive covenant running with the land were firmly reversed by the views

7 8 9 10

(1885) 29 ChD 750. Oliver Wendell Holmes, The Common Law, p 395. YB 20 Ed I 360. Bracton expressed the view ‘quia res eum onere transit ad quemcumque’: Bracton, De Legibus Angliae, ff 282, 282b and Fleta appears to have held a similar view: Lib VI c 23 s 17. 11 If the burden of a positive covenant had been held to run by the common law courts, the result would have been to create a legal interest binding on the land in rem independently of any question of notice. 12 See Keppell v Bailey (1834) 2 My & K 517. In Holmes v Buckley (1691) 1 Eq Cas Abr 27, a covenant to cleanse a watercourse was apparently enforced against a successor in title of the original covenantor, but in Austerberry v Oldham Corpn (1885) 29 ChD 750, Lindley LJ said of that case: ‘I fail to understand the exact grounds of that decision, specifically enforcing that covenant to cleanse. I doubt whether it was a decision to that effect; but the case is too loosely reported to be a guide on the point’. 13 (1859) 23 JP 644. 14 (1868) LR 6 Eq 252. 15 (1848) 2 Ph 774. 16 (1876) 3 ChD 694.

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The decision in Austerberry v Oldham Corpn 28.7 expressed in Haywood v Brunswick Building Society17 where, in relation to a covenant by a freeholder with the grantee of a rentcharge to build and repair buildings, Cotton LJ said: ‘I think that a mere covenant that land shall be improved does not run with the land … so as to give the plaintiff a right to sue at law. I also think that the plaintiff has no remedy in equity … The covenant to repair can only be enforced by making the owner put his hand to his pocket and there is nothing which would justify us in going that length.’18

THE DECISION IN AUSTERBERRY v OLDHAM CORPN 28.7 The forthright opinion expressed by Cotton LJ in Haywood’s case was endorsed by the decision of the Court of Appeal in Austerberry v Oldham Corpn,19 the facts of which were as follows: John Elliott sold and conveyed a strip of land (adjoining other land which he retained) to trustees who held it in trust for a company which intended to make up the land as a toll road. The trustees covenanted with John Elliott, his heirs and assigns, that the trustees, their heirs and assigns, would make the road at their expense and at all times keep it in good repair and allow the public to use it on payment of tolls. Subsequently, John Elliott sold and conveyed the adjoining land to Austerberry and the corporation (in exercise of statutory powers) acquired the road by purchase from the trustees. Both Austerberry and the corporation purchased with notice of the covenant. Under the Public Health Act 1875, Austerberry, as a frontager to the road, was required to contribute to the corporation’s expenses of making up the road to the required standard but Austerberry claimed that he was entitled to enforce the covenant against the corporation by way of extinction of such liability. In connection with the question whether the corporation was bound by the covenant, it was accepted that the corporation was in no better position than any other purchaser of the road would have been. The Court of Appeal, affirming the decision at first instance, held that the burden of the covenant did not run either at law or (notwithstanding notice of the covenant) in equity under Tulk v Moxhay.20 In the process of so holding, the decision in Morland v Cook21 was explained by Lindley LJ on the basis that the covenant (to contribute to the expense, inter alia, of maintaining sea walls protecting the land from flooding) created a rentcharge for the expenses of maintenance and the opinion expressed by Malins V-C in Cooke v Chilcott22 was rejected as being obiter and ‘so shaken [by the effect of later cases] that I cannot rely upon it as an authority at all’.

17 (1881) 8 QBD 403. 18 Subsequently, in Grant v Edmondson [1931] 1 Ch 1, the Court of Appeal held that the benefit a pre-1926 covenant to pay a rentcharge did not run with the rentcharge and the same would clearly apply to the benefit of a positive covenant to improve the rentcharged land. 19 (1885) 29 ChD 750. 20 (1848) 2 Ph 774. 21 Above, para 28.5. 22 Above, para 28.5.

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28.8  The burden of positive covenants

THE RESULTING RULE OF LAW AND EQUITY 28.8 The decision in Austerberry v Oldham Corpn has since been treated as finally establishing the general rule in regard to the non-transmissibility of the burden of a positive covenant both at common law and in equity. It was re-affirmed in 1935 in the case of E & GC Ltd v Bate23 and was upheld by the House of Lords in Rhone v Stephens.24

SECTION 79 OF THE LAW OF PROPERTY ACT 1925 28.9 Following the decision of the Court of Appeal in Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board,25 on section 78(1) of the Law of Property Act 1925 (relating to the benefit of covenants),26 the question arose whether the corresponding provisions of section 79(1) had any enlarging effect on the running of the burden of positive covenants. 28.10

The section provides as follows:

‘(1) A covenant relating to any land of a covenantor or capable of being bound by him, shall, unless a contrary intention is expressed, be deemed to be made by the covenantor on behalf of himself his successors in title and the persons deriving title under him or them, and, subject as aforesaid, shall have effect as if such successors and other persons were expressed. This subsection extends to a covenant to do some act relating to the land, notwithstanding that the subject-matter may not be in existence when the covenant is made. (2) For the purposes of this section in connexion with covenants restrictive of the user of land ‘successors in title’ shall be deemed to include the owners and occupiers for the time being of such land. (3) This section applies only to covenants made after the commencement of this Act.’ 28.11 In Rhone v Stephens,27 Lord Templeman, with whose speech the other four Lords of Appeal agreed, after quoting a dictum of Lord Wilberforce in Tophams Ltd v Earl of Sefton28 and a passing reference to section 79 by Brightman J in Federated Homes Ltd v Mill Lodge Properties Ltd,29 and referring

23 24 25 26 27 28

29

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(1935) 79 L Jo 203. [1994] 2 AC 310. [1949] 2 KB 500. See para 27.34 above. Above, footnote 24. [1967] 1 AC 50 at 73: ‘I should add that section 79 of the Law of Property Act 1925 itself does not have the effect of causing Tophams’ covenants to run with the land: it merely extends the scope of Tophams’ covenants.’ Lord Wilberforce was one of two dissenting members of the House of Lords in that case and, the action being against Tophams Ltd as original covenantor, the observation was purely obiter. [1980] 1 WLR 594, at 605–606: ‘Section 79, in my view, involves quite different considerations [from section 78] and I do not think that it provides a helpful analogy’.

Land Registration 28.14 to two decisions on section 78,30 dismissed the appellant’s argument on section 79(1) in the following words: ‘Without casting any doubt on those long-standing decisions I do not consider that it follows that section 79 of the 1925 Act had the corresponding effect of making the burden of positive covenants run with the land.’ Accordingly, it is clear from the decision that section 79 does ‘not have the far reaching (and perhaps unexpected) effects which section 78 has been held to have’,31 and does not operate to make the burden of post-1925 positive covenants run with the land. 28.12 In Morrells of Oxford Ltd v Oxford United Football Club Ltd32 the Court of Appeal made clear33 that section 79 merely extends (subject to any contrary intention being expressed)34 the persons (to owners and occupiers for the time being of the land) whose acts and omissions are within the reach of the covenant in the sense of making equitable remedies available ‘provided that the other conditions for equity’s intervention are satisfied’ (paragraph 35), including the fact that the covenant is restrictive in nature and that the covenantee retains land capable of being benefited (see paragraph 39, read together with paragraph 34).35 It does not extend its ambit to positive covenants.

STATEMENT OF THE GENERAL RULE WHICH APPLIES TO THE BURDEN OF A POSITIVE COVENANT 28.13 The general rule which emerges from the foregoing is that – subject to certain statutory exceptions – the burden of a positive covenant made by the owner of an estate or interest in land, relating to that land (not being a covenant by a party to a lease with the other party pertaining to the subject matter of both the lease and the reversion),36 does not run with the land. It will, of course, be enforceable between the original parties.

LAND REGISTRATION 28.14

Section 64 of the Land Registration Rules 2003 provides as follows,

‘(1) The registrar may make an appropriate entry in the proprietorship register of any positive covenant that relates to a registered estate given by the proprietor or any previous proprietor of that estate. (2) Any entry made under paragraph (1) must, where practicable, refer to the instrument that contains the covenant.

30

Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500 and Williams v Unit Construction Co Ltd (1955) 19 Conv (NS) 262. 31 Morrells of Oxford Ltd v Oxford United FC Ltd [2001] Ch 459, at para 14, per Robert Walker LJ for the court. 32 [2001] Ch 459. 33 Albeit that they described it as a tentative view, the point not actually being necessary to the determination of the appeal (see para 29). 34 See s 79(1) of the Law of Property Act. 35 See further, para 11.53 above. 36 cf Dartstone Ltd v Cleveland Petroleum Co Ltd [1969] 1 WLR 1807.

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28.15  The burden of positive covenants (3) If it appears to the registrar that a covenant referred to in an entry made under paragraph (1) does not bind the current proprietor of the registered estate, he must remove the entry.’37

STATUTORY EXCEPTIONS WHERE THE BURDEN OF A POSITIVE COVENANT RUNS WITH THE LAND 28.15 There are a number of statutory exceptions in relation to covenants entered into with various public authorities, of which the following are examples.

1 Section 35 of the Highways Act 1980 – ‘walkway’ agreements 28.16 This section authorises a local highway authority or a district council (after consultation with the local highway authority) to enter into an agreement with any person having a sufficient interest in any land on which a building is, or is proposed to be, situated for the provision and dedication of footpaths through or under the building (referred to in the section as ‘walkways’). A walkway agreement may impose positive obligations relating to such things as maintenance, lighting, cleansing and drainage of the walkway and may make provision for payments by the authority to any person having an interest in the land or building affected by the agreement. In relation to the burden of the obligations undertaken by the person having the interest in the land section 35(4) provides as follows: ‘(4) Any covenant (whether positive or restrictive) contained in any agreement under this section and entered into by a person having an interest in any land affected by the agreement shall be binding upon persons deriving title to the land under the covenantor to the same extent as it is binding upon the covenantor notwithstanding that it would not have been binding upon those persons apart from the provisions of this subsection, and shall be enforceable against those persons by the local highway authority.’ By section 35(5), a covenant contained in a walkway agreement entered into by the owner of an interest in the land is a local land charge and registrable as such.38

2 Section 33 of the Local Government (Miscellaneous Provisions) Act 1982 28.17 This section enables local authorities to enter into certain agreements with landowners.

37 Such entries are relatively common: see para 25.10 above. 38 Unlike a general land charge, a local land charge is enforceable whether registered or not, but a purchaser relying on a local land charges search which does not disclose it is entitled to compensation for any loss suffered: see s 10 of the Local Land Charges Act 1975, para 10.27 above.

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Exceptions where burden of positive covenant runs with land 28.19 Section 33(2) provides as follows: ‘(2) If, in a case where this section applies,— (a) the instrument contains a covenant on the part of any person having an interest in land, being a covenant to carry out any works or do any other thing on or in relation to that land, and (b) the instrument defines the land to which the covenant relates, being land in which that person has an interest at the time the instrument is executed, and (c) the covenant is expressed to be one to which this section or section 126 of the Housing Act 1974 (which is superseded by this section)) applies, the covenant shall be enforceable (without any limit of time) against any person deriving title from the original covenantor in respect of his interest in any of the land defined as mentioned in paragraph (b) above and any person deriving title under him in respect of any lesser interest in that land as if that person had also been an original covenanting party in respect of the interest for the time being held by him.’

3 Section 39 of the Wildlife and Countryside Act 1981 – management agreements 28.18 By this section, a county planning authority (in the case of a national park outside a metropolitan county), or the Broads Authority (in the case of land within the Broads) or a local planning authority (as respects any other land) may, for the purpose of conserving or enhancing the natural beauty or amenity of land in the countryside or promoting its enjoyment by the public, make a ‘management agreement’ with any person having an interest in the land with respect to its management. Such an agreement may impose on that person restrictions on cultivation or positive obligations to carry out works or agricultural or forestry operations or do other things on the land. Section 39(3) provides as follows: ‘(3) The provisions of a management agreement with any person interested in the land shall, unless the agreement otherwise provides, be binding on persons deriving title under or from that person and be enforceable by the relevant authority against those persons accordingly.’

4  Section 75 of the Mission and Pastoral Measure 2011 28.19

This legislation in relation to Church of England land provides that:

‘(1) Without prejudice to any restriction or requirement in a pastoral (church buildings disposal) scheme or a pastoral church buildings scheme to which section 58 or 59 applies, the Commissioners39 or the diocesan board of finance may, in exercising their powers under this Part to sell, give, exchange or let or, as the case may be, to let or license, any building or land, include in the conveyance, lease or other instrument such covenants imposing conditions and requirements as to the use of 39

Ie, the Church Commissioners.

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28.20  The burden of positive covenants the building or land concerned as the Commissioners or board think necessary or expedient to give effect to the provisions of the scheme or otherwise to secure the suitable use of the building or land; and, in a case where the land is sold, given or exchanged, any such covenants shall be enforceable as if the Commissioners or board were the owners of adjacent land and the covenants were expressed to be entered into for the benefit of that adjacent land, and in the case of covenants of a positive character as if they were negative. (2) Where any such covenant is subsequently varied or released by agreement, any sum of money received by a diocesan board of finance in consideration of the variation or release of a covenant imposed by the board shall be paid to the Commissioners and section 63(5) shall apply in relation to the sum so paid, and in relation to any sum of money received by the Commissioners in consideration of the variation or release of a covenant imposed by them, as it applies in relation to the proceeds of any sale or exchange under section 63(2), (3) or (4). (3) Section 84 (except subsection (2)) of the Law of Property Act 1925 (c.20) (which enables the Upper Tribunal to discharge or modify restrictions affecting land) shall not apply in relation to conditions and requirements imposed under subsection (1).’ ‘Negative’ in subsection(1) is presumably intended to mean ‘restrictive’, otherwise the reference to that would add nothing (negative covenants being no more enforceable under the general law than positive covenants), though that is not what it says. 28.20 This is the latest measure so providing. Like provisions were in force prior to this Measure under the Pastoral Measure 1983 (where section 62 was to the same effect).

5 Sections 155 and 156 of the Housing Act 1985 (as amended) 28.21 Section 155 provides that a conveyance of the freehold or grant of a lease of a council house or flat made pursuant to the exercise of the right to buy conferred by Part V of the Act shall, where the price was discounted, contain a covenant ‘binding on the secure tenant and his successors in title’ to repay the discount or a proportion of it on demand in the event of a relevant disposal of the property within three years of the conveyance or grant. Apart from the words quoted above, the only other provisions operating to render the covenant binding upon the covenantor’s ‘successors in title’ are contained in section 156(1) which provides as follows: ‘(1) The liability that may arise under the covenant required by section 155 is a charge on the dwelling-house, taking effect as if it had been created by deed expressed to be by way of legal mortgage.’ Provision is made in the section for determining the priority of the charge in relation to other charges on the property.40 The charge is a puisne mortgage 40 Section 156(2), (2A) and (2B). These provisions presumably assume that the order of priority is not otherwise affected by non-registration of any charge.

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Exceptions where burden of positive covenant runs with land 28.25 taking effect as a land charge Class C(i) and in the case of registered land is required to be protected as such under section 59(2) of the Land Registration Act 2002.41

6  Section 106 of the Town and Country Planning Act 1990 28.22

See Chapter 32 below.

7  Section 19 of the Leasehold Reform Act 1967 28.23 This section provides for the approval by the High Court of a scheme of management on the application of a landlord of properties situated in an area whose standards of appearance and amenity are dependent upon the exercise of powers of management by the landlord where otherwise the landlord’s powers of management would be reduced or extinguished by reason of disenfranchisement under the Act. No application can be made unless the landlord (or a representative body of the tenants) has, on an application made before 1 January 1970, obtained a certificate from the appropriate minister.42 28.24 Section 19(8) lists matters for which a scheme may provide including matters (paragraph (c)): ‘for imposing on persons from time to time occupying or interested in any such property obligations in respect of maintenance or repair of the property or of property used or enjoyed by them in common with others …’ 28.25

Section 19(10) then provides for enforcement as follows:

‘(10) A certificate given or scheme approved under this section shall be registered under the Land Charges Act 192543 as a local land charge; and where a scheme is so registered— (a) the provisions of the scheme relating to property of any description shall, so far as they respectively affect the persons from time to time occupying or interested in that property, be enforceable by the landlord for the time being against them, as if each of them had covenanted with the landlord for the time being to be bound by the scheme.’44

41 See s 156(3) of the Housing Act 1985. In the (now unlikely) event of the land charged being unregistered, the charge would require protection by registration as a Class C(i) land charge under the Land Charges Act 1972. 42 As regards areas in Wales and Monmouthshire, the Secretary of State for Wales and as regards other areas the Minister of Housing and Local Government: s 19(1). For examples of applications made to the High Court for approval of a scheme, see Re Sherwood Close (Barnes) Management Co Ltd [1972] Ch 208; Re Abbots Park Estate [1972] 1 WLR 598; Cadbury v Woodward (No 2) (1972) 24 P&CR 335; Re Calthorpe Estate, Edgbaston, Birmingham (1973) 26 P&CR 120; Re Dulwich College Estate’s Application (1973) 231 Estates Gazette 845; Mosley v Cooper [1990] 23 EG 66; Eton College v Nassar [1991] 2 EG 63, CA. 43 Now, in relation to local land charges, the Local Land Charges Act 1975. 44 See also the orders which may be made under ss 26(1) and 50(1) of the Leasehold Reform, Housing and Urban Development Act 1993.

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28.26  The burden of positive covenants

8  Local and private Acts 28.26 Numerous local Acts contain provisions designed to secure the running of the burden of covenants in circumstances where they would not run under the general law. 28.27 The most significant of them is the Greater London Council (General Powers) Act 1974. The power given to London borough councils by section 16 of the 1974 Act still applies, notwithstanding that it no longer applies to the Greater London Council, which has since been abolished. This is therefore of major importance, as it continues to cover the whole of Greater London. Section 16 provides that every undertaking given to, or agreement with, such an authority by the owner of any legal estate in land which (a) is made under seal in connection with the land, and (b) is expressed to be given or made in pursuance of the section shall be enforceable not only against the owner joining in the undertaking or agreement but also against the successors in title of any such owner and any person claiming through or under them. Such an undertaking or agreement was to be treated as a local land charge for the purposes of the Land Charges Act 1925.45 Any person against whom such an undertaking or agreement is enforceable shall be entitled to require a copy thereof from the local authority without payment.46 Section 16 was recently relied on by the Court of Appeal in R (Khodari) v Royal Borough of Kensington and Chelsea47 to uphold the enforceability of a negative obligation, although not restrictive of the user of the land (so that it was not covered by section 106 of the Town and Country Planning Act 1990 or the ordinary law of restrictive covenants). The same would apply to positive covenants. 28.28 Other Acts include the Wentworth Estate Act 1964, the Lincoln’s Inn Act 1860 (regulating the maintenance of buildings in the Inn), the Green Belt (London and Home Counties) Act 1938, section 22, and the London Building Acts 1930 and 1939. Many local authorities will be found to have (or to have had) special powers under a local Act and the existence and possible effect of such an Act on the enforceability of covenants entered into with a local authority ought to be considered in any particular case.

LOCAL LAND CHARGES 28.29 By virtue of the combined effect of the provisions of section 1(1)(b)(ii), (c)(ii) and (d) and (2)(a) and (c) of the Local Land Charges Act 1975, any positive

45 46 47

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Subsection (2). See now the Local Land Charges Act 1975, below. Subsection (3). [2018] 1 WLR 584 (see paras 32.36–32.37 below).

Local Land Charges 28.29 covenant affecting land, as well as any restriction on the use of land enforceable by a local authority or minister or government department under any covenant or agreement, other than one between a lessor and a lessee, which is binding upon successive owners of the land otherwise than by reason of such local authority, minister or government department owning an interest in the benefited land, is registrable as a local land charge against the burdened land. The individual Acts also generally so provide. For further detail (and the effects of failure to register such a charge), see Chapter 10 above at para 10.23 et seq (and 10.27 et seq).

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29 Methods of securing the indirect running of the burden of a positive covenant

INTRODUCTION 29.1 Since the burden of a positive covenant requiring something to be done by the owner for the time being of specified land cannot under the general law be made to run with the land so as to bind such owner, the only alternative is to seek to achieve performance by indirect methods. The approach adopted by these methods falls primarily under one or other of the following heads: (a) the deployment of ancillary legal mechanisms which, whilst not positively securing performance, impose effective sanctions for non-performance; or (b) the use of devices which cause the burden to run in a different format; or (c) the use of procedures designed to renew the covenant or its burden on each change of ownership of the would-be burdened land. 29.2 (1) (2) (3) (4) (5) (6) (7) (8) (9)

1 2 3 4 5 6 7 8 9

In this chapter, the following nine methods are considered: Use of the right of re-entry.1 Use of the right of entry.2 Use of the rentcharge.3 Conditions attached to property rights.4 Lease of easements containing covenants.5 Fresh covenants on every change of ownership.6 Long lease followed by enlargement.7 Chain of indemnity covenants.8 Fencing covenants as easements.9

At para 29.3 et seq. At para 29.59 et seq. At para 29.68 et seq. At para 29.72 et seq. At para 29.89 et seq. At para 29.92 et seq. At para 29.98 et seq. At para 29.108 et seq. At para 29.111 et seq.

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29.3  Securing the indirect running of the burden of a positive covenant

(1)  RIGHT OF RE-ENTRY10 29.3 By comparison with the alternative methods considered below, the right of re-entry appears to offer the greatest degree of flexibility in covering virtually any type of positive obligation (or, indeed, restriction11) required to be made binding on the land. Further, it seems to offer a reasonably satisfactory degree of legal certainty in its effectiveness for the purpose.

Right of re-entry at common law 29.4 At common law, if land was conveyed to a grantee upon condition that a particular event did not occur within a period which did not exceed the perpetuity period, the effect was to create a right of re-entry in favour of the grantor exercisable on the happening of the condition.12 The condition might be the happening of any event, provided it was not contrary to public policy,13 repugnant to the estate granted,14 or uncertain.15 Alternatively, the grantor of land might expressly reserve a right of re-entry exercisable on a specified event – and that event might consist of a breach of covenant on the part of the grantee.16 In the case of the grant of the fee simple estate upon condition, there was no question of any reversion being vested in the grantor – the right of re-entry was a legal interest in the land less than an estate and it existed in gross. The position was the same in the case of a right of re-entry reserved to the assignor of a lease on the occasion of the assignment of the lease.17 In each case the effect of the exercise of the right of re-entry was to destroy the estate of the grantee and restore it to the grantor and there could be no gift over to a third party on its exercise.18

10

The expression ‘right of re-entry’ is used in order to avoid confusion with some types of ‘right of entry’ which do not confer a right of forfeiture but merely to enter for some specific purpose, as in the case of the rights of entry referred to in ss 121(3) and 162(1)(d) of the Law of Property Act 1925. But this usage is by no means universally observed. Thus, ss 1(2)(e), 4(3) and 56(1) of the same Act use the expression ‘right of entry’ when it is clear from the context that the right is a right of forfeiture. 11 The burden of a restrictive covenant will only run with the land where the covenant is entered into for the benefit of land in which the covenantee has some interest. Accordingly, if the covenantee has no land capable of benefiting (so that the restrictive covenant is in gross), the methods for securing indirect enforceability considered in this section are equally relevant. 12 See Re Macleay (1875) LR 20 Eq 186; Re Da Costa, Clarke v Church of England Collegiate School of St Peter [1912] 1 Ch 337; Re Hollis’ Hospital Trustees and Hague’s Contract [1899] 2 Ch 540. 13 Egerton v Earl Brownlow (1853) 4 HL Cas 1; Re Moore (1888) 39 ChD 116. 14 Eg, that the grantee shall not alienate: Re Dugdale (1888) 38 ChD 176; Re Rosher (1884) 26 ChD 801. 15 Clavering v Ellison (1859) 7 HL Cas 707, per Lord Cranworth at 725; Re Sandbrook [1912] 2 Ch 471. 16 As in Dunn v Flood (1883) 25 ChD 629, where, however, the right of re-entry was void for perpetuity. 17 Doe d Freeman v Bateman (1818) 2 B & Ald 168; Hyde v Warden (1877) 3 Ex D 72. 18 Serjeant Rudhall’s Case (1596) Sav 76, cited in Re Hollis’ Hospital Trustees and Hague’s Contract [1899] 2 Ch 540, at 549.

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Right of re-entry 29.7

Effect of the 1925 property legislation on right of re-entry and the land affected: legal and equitable rights of re-entry 29.5

With two exceptions, all rights of re-entry will now be equitable.

By section 1(2)(e) of the Law of Property Act 1925, a right of re-entry will now be a legal interest only if it is ‘exercisable over or in respect of a legal term of years absolute, or annexed for any purpose, to a legal rentcharge’. By section 1(3), all other rights of re-entry are equitable. Accordingly, if on a conveyance or transfer of freehold land a right of re-entry which is not annexed to a legal rentcharge is, or was after 1925, made exercisable on a breach of a covenant occurring during any prescribed perpetuity period19 that right of re-entry is now necessarily equitable. The same applies where the right of re-entry so exercisable was or is reserved on the occasion of the assignment of an existing leasehold interest in land.20 29.6 So far as concerns the land affected, the existence of the right of re-entry will not prevent either an estate in fee simple or a term of years from being ‘absolute’ and thus capable of subsisting as a legal estate. As to the fee simple estate, a provision added to section 7(1) of the Law of Property Act 1925 by section 7 of the Law of Property (Amendment) Act 1926 provides that ‘a fee simple subject to a legal or equitable right of entry or re-entry is for the purposes of this Act a fee simple absolute’. As to the term of years, section 205(1)(xxvii) of the 1925 Act defines a term of years absolute as specifically including a term liable to determination by re-entry – and in the absence of any indication to the contrary, the re-entry referred to must be taken as including re-entry pursuant to a right of re-entry in gross21 such as existed in Shiloh Spinners Ltd v Harding.22 29.7 Since 22 July 1977, when the Rentcharges Act 1977 came into operation, no rentcharge may be created either at law23 or in equity, other than the five kinds specified in section 2(3) of the Act.24 One of these is ‘an estate rentcharge’ which is defined in section 2(4), which states as follows: ‘(4) For the purposes of this section ‘estate rentcharge’ means (subject to subsection (5) below) a rentcharge created for the purpose—

19 Which could prior to 6 April 2010 be by reference to any ascertainable lives in being (such as Royal lives) plus 21 years: Re Villar [1929] 1 Ch 243, or (in the case of instruments executed on or after 16 July 1964) any period not exceeding 80 years as may be specified as the perpetuity period: s 1 of the Perpetuities and Accumulations Act 1964. If (in the case of such instruments) no period was prescribed then the ‘wait and see’ provisions of s 3 of that Act would operate. From 6 April 2010 perpetuity periods have been largely abolished: see below. 20 Shiloh Spinners Ltd v Harding [1973] AC 691. In rejecting the argument that such a right of re-entry was ‘exercisable over or in respect of a legal term of years absolute’ Lord Wilberforce regarded the matter as obscure and considered that a right of re-entry exercisable in respect of a legal term of years was ‘without discernible meaning’. His Lordship concluded his consideration of this argument as follows: ‘It would I think be contrary to the whole scheme of the Act, which requires the limiting and vesting of legal estates and interests to be by reference to a fee simple or a term of years absolute, to allow this to rank as a legal interest. In my opinion it is clearly equitable’. 21 Ie, not attached to the lessor’s reversion. 22 [1973] AC 691. 23 In order to be a legal rentcharge, it must be in possession and either perpetual or for a term of years absolute: Law of Property Act 1925, s 1(2)(b). 24 Section 2(1) and (2).

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29.8  Securing the indirect running of the burden of a positive covenant (a) of making covenants to be performed by the owner of the land affected by the rentcharge enforceable by the rent owner against the owner for the time being of the land; or (b) of meeting, or contributing towards, the cost of the performance by the rent owner of covenants for the provision of services, the carrying out of maintenance or repairs, the effecting of insurance or the making of any payment by him for the benefit of the land affected by the rentcharge or for the benefit of that and other land.’ Subsection (5) goes on to provide that: ‘(5) A rentcharge of more than a nominal amount shall not be treated as an estate rentcharge for the purposes of this section unless it represents a payment for the performance by the rent owner of any such covenant as is mentioned in subsection (4)(b) above which is reasonable in relation to that covenant.’ 29.8 There have been very few cases at higher court level considering these provisions. In the first such case, as late as 2002, Orchard Trading Estate Management Ltd v Johnson Security Ltd,25 Orchard agreed to provide certain services for the owners of 15 industrial units, including a sewage system and the payment of rates, in return for the payment of variable sums under a rentcharge. The Court of Appeal held that it was clear that this was an estate rentcharge within the meaning of section 2(4) as the payments were clearly for the benefit of the land, including the payment of rates which was for the benefit of the units and so within section 2(4)(b). The court expressly left open for decision in another case, the question of whether if some payment was included within the ambit of the charge which was not for the benefit of the land that would render the entire rentcharge void. 29.9 In Canwell Estate Co Ltd v Smith Brothers Farms Ltd,26 the claimant owned the roads and amenity areas on a large rural estate where the defendant, together with a number of other landowners, owned freehold agricultural land. The claimant was the registered owner of a rentcharge on the defendant’s land which had been created by the transfer of the land between the claimant and the defendant’s predecessor in title. Under the rentcharge, the defendant was required to pay a proportion of the costs of repairing and maintaining all the roads on the estate, over most of which it had no right of way, as well as 90 per cent of the costs of repairing and maintaining the sole road on the estate over which it did have a right of way. It challenged the validity of the rentcharge on the basis the rentcharge was not for the benefit of its particular land. 29.10 The Court of Appeal held that the focus under section 2(4)(b) was on the overall beneficial purpose of the rentcharge for the estate, not on any specific, direct benefit for a particular piece of land and it was sufficient that the purpose of the rentcharge was the performance of a covenant that would benefit affected land directly or indirectly, and that the fact that the defendant’s payments under the rentcharge would include a contribution to the cost of maintaining roads on the estate over which it had no right of way did not prevent it from being a valid estate rentcharge.

25 26

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[2002] EWCA Civ 406. [2012] EWCA Civ 237.

Right of re-entry 29.13 29.11 The Court also held that although the aim of section 2(5) was to prevent the creation of rentcharges for pure income profit by means of rentcharges for more than nominal amounts that were not ‘reasonable’, it did not follow that the validity of a rentcharge depended on the reasonableness of the amount calculated from time to time for the service charges. It held that if a rentcharge is created for the legitimate purpose of contributing to the cost of the performance of a covenant for the benefit of the landowner’s land, it is valid from the outset and remains so thereafter. If, however, the rentcharge owner seeks to recover a payment that is not reasonable in relation to the performance of the covenant, whilst the registered estate rentcharge does not automatically cease to be a valid estate rentcharge, it simply becomes unavailable to the rent owner as a means of recovering the contribution to unreasonable costs. Accordingly, the fact that the defendant’s contribution under the rentcharge was alleged to be unreasonable, in the sense that its land did not directly benefit from the costs incurred by the claimant in the upkeep of roads on the estate over which the defendant had no right of way, did not prevent the rentcharge from being a valid estate rentcharge. The wording of section 2(4)(a) shows, however, that there need not be any ‘estate’ going beyond an individual piece of land owned by one person, imposed in an isolated transaction.

Enforceability of a right of re-entry against successors etc Unregistered land 29.12 A legal right of re-entry affecting unregistered land, being a right in rem, will bind all persons subsequently acquiring an estate or interest in the land whether they have notice of the right or not. An equitable right of re-entry, as a right in personam, will be binding upon all persons subsequently acquiring an estate or interest in the land except a bona fide purchaser of a legal estate who takes for value and without notice.27 Since 1925, most equitable interests in unregistered land which do not arise under trusts are registrable as land charges under the Land Charges Act 1972.28 However, the list of land charges is specific29 and in Shiloh Spinners Ltd v Harding30 the House of Lords (reversing the decision on this point of the Court of Appeal) held that an equitable right of re-entry was not included in the statutory list. 29.13 Accordingly, the enforcement of an equitable right of re-entry against a purchaser of a legal estate or interest in the land affected continues to depend on the old equitable doctrine of notice as now modified and encapsulated in the provisions of section 199 of the Law of Property Act 1925.31

27 28 29 30 31

See, generally, Pilcher v Rawlins (1872) 7 Ch App 259, especially per James LJ at 268. Or prior to that Act, the Land Charges Act 1925. See, now, s 2 of the Land Charges Act 1972. [1973] AC 691. For a discussion on some aspects of this section see above, para 9.17 et seq.

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29.14  Securing the indirect running of the burden of a positive covenant This being so, if the right of re-entry is created by a separate instrument from that by which the legal estate in the land affected is disposed of, it should be an agreed term that a memorandum giving notice of the existence of the right of re-entry be indorsed on or (if indorsement is impracticable) permanently annexed to a document of title selected by the person entitled to the right of re-entry.32 By section 15 of the Land Registration Act 2002, where land is unregistered, a caution may be lodged against first registration, as an interest affecting a qualifying interest.

Registered land 29.14 In the case of registered land, a legal right of re-entry has no greater status of enforceability than an equitable right of re-entry – neither is an overriding interest and in order to be enforceable against a subsequent transferee or grantee for valuable consideration, the right of re-entry must be protected by a notice on the register pursuant to section 29 of the 2002 Act.

Procedure when an event occurs giving rise to the exercise of the right of re-entry 29.15 In the case of a legal right of re-entry annexed to a legal rentcharge, the provisions of section 146 of the Law of Property Act 1925 apply33 and by section 146(12) those provisions have effect notwithstanding any stipulation to the contrary. However, section 146(11) provides that ‘This section does not, save as otherwise mentioned,34 affect the law relating to re-entry or forfeiture or relief in case of non-payment of rent.’ Accordingly, if the right of re-entry is being exercised solely by reason of nonpayment of the rent payable under the rentcharge, no notice need be served under the section. But if the rent is payable only on demand, then unless on its true construction the right of re-entry can be treated as being intended to be exercisable on nonpayment whether lawfully demanded or not,35 a common law demand for the

32 Cf section 200 of the Law of Property Act 1925 which, however, does not appear to extend to a right of re-entry. 33 This section applies to a right of re-entry for breach of any covenant or condition in a lease. But by s 146(5)(a), for the purposes of the section ‘lease’ includes ‘a grant at a fee farm rent, or securing a rent by condition’. It follows that a grant in fee simple subject to a right of re-entry on non-payment of a rentcharge is subject to the provisions of the section. As to the meaning of ‘fee farm rent’, see Co Litt 143b–144a and especially note (5); Bristol Corpn v Virgin [1928] 2 KB 622. By s 146(5)(b) and (c), for the purposes of the section ‘lessee’ includes ‘a grantee under such a grant and the persons deriving title under him’ and ‘lessor’ includes ‘a person making such grant and the persons deriving title under him’. 34 Section 146(11) re-enacted s 14(8) of the Conveyancing Act 1881 but with the addition of the words ‘save as otherwise mentioned’. These words were necessary solely because of the words ‘or non-payment of rent’ which were added to subsection (4) (relating to claims for relief from forfeiture by an underlessee). 35 As in Doe d Biass v Horsley (1834) 1 Ad & El 766.

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Right of re-entry 29.18 rent must first be made. This entails demand being made between sunrise and sunset on the very day that the rent is due (thus not including any arrears) either at an appointed place or at the place where the land is situated and waiting until midnight on that day for payment.36 Having regard to the exactitude of these requirements, it is clearly desirable that the right to re-enter on non-payment of rent be expressed to be exercisable whether the rent is lawfully demanded or not. 29.16 In relation to positive and negative covenants, a rentcharge may be reserved (or granted) requiring the owner of the land affected to comply with the positive and negative covenants with the rentcharge owner, for instance to keep all buildings in good and substantial repair,37 to insure, to give notice of subsequent dispositions and not to make structural additions or alterations to any building or erect any new building without first obtaining the approval in writing of the rentcharge owner to the plans and specifications,38 with the right of re-entry to be made exercisable on breach or non-observance of any such covenants. In such cases, before the right of re-entry can be exercised for breach, the rentcharge owner must serve on the owner of the estate which is subject to it a notice in writing (commonly referred to as a ‘section 146 notice’) specifying the breach, requiring it to be remedied and (if compensation is required) requiring compensation. If within a reasonable time thereafter the breach is not remedied, then the right of re-entry becomes exercisable.39 29.17 In the case of an equitable right of re-entry which is not annexed to a legal rentcharge, but which is made exercisable on breach of covenant (whether positive or restrictive) the provisions of section 146 of the 1925 Act do not apply and subject to any requirements as to the service of notice to which the exercise of the right of re-entry is expressly made subject, the right can be immediately enforced by action or otherwise.

Exercising the right of re-entry Peaceable re-entry 29.18 If the rentcharge (although existing in gross) issues out of a lease or tenancy of premises which are let as a dwelling then, by section 2 of the Protection from Eviction Act 1977, if any person is lawfully residing in the premises or part of them, it is unlawful to enforce a right of re-entry otherwise than by proceedings in court. In the case of other premises, this limitation does

36 See Duppa v Mayho (1669) 1 Wms Saund 275; Cutting v Derby (1776) 2 Wm Bl 1075; Startup v MacDonald (1843) 6 Man & G 593. 37 See Shiloh Spinners Ltd v Harding [1973] AC 691. Cf Haywood v Brunswick Building Society (1881) 8 QBD 403. 38 As to the running of such covenants with the rentcharge, see paras 29.50–29.52. 39 As to the circumstances which determine what is a reasonable time see, eg Expert Clothing Service and Sales Ltd v Hillgate House Ltd [1986] Ch 340; Civil Service Co-operative Society Ltd v McGrigor’s Trustee [1923] 2 Ch 347; Scala House and District Property Co Ltd v Forbes [1974] QB 575.

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29.19  Securing the indirect running of the burden of a positive covenant not apply.39a Further, where the rentcharge issues out of a fee simple estate, then regardless of the type of premises, there is no restriction on peaceable re-entry. As a practical matter, however, peaceable re-entry is likely to be viable only where the occupier of the land co-operates or the land is unoccupied, since by section 6(1) of the Criminal Law Act 1977 it is a criminal offence for any person without lawful authority to use or to threaten violence for the purpose of securing entry into any premises if, to his knowledge, there is someone present on those premises who is opposed to his entry.40

Order of the court 29.19 The service of proceedings asking for an order of forfeiture, possession and mesne profits has the effect, subject to the order afterwards being made, of destroying the legal estate in question from the date on which the proceedings are served.41 The demand for possession must be unequivocal. Where a claim form claims possession and, without prejudice to that claim, alternatively an injunction restraining certain acts on the premises, there has not been an unequivocal demand for possession and the lease still subsists.42 Mesne profits become payable from the date of such service until delivery of possession. For certain purposes, however, including relief from forfeiture, the estate may be deemed to remain in existence pending the making of any order.

The effect of re-entry Unregistered land 29.20 The effect of the exercise of a legal right of re-entry is directly to cause the ownership of the estate in land in question to vest in the person who re-enters. Thereafter that person is entitled to delivery up of the title deeds from the person whose estate has been defeated43 – a matter for which express provision would ordinarily have been made in the instrument reserving the right of re-entry. 29.21 In the case of the exercise of an equitable right of re-entry, such exercise will not automatically operate to vest the legal estate in the person exercising the right but entitles him to require it to be vested in him. In such a case, section 3(3)

39a See Pirabakaran v Patel [2006] 1 WLR 3112 for an example of premises that were both commercial and residential and to which the section was held to apply. 40 See, also, in relation to unlawful repossession from residential occupiers, s 1 of the Protection from Eviction Act 1977. 41 See Canas Property Co Ltd v KL Television Services Ltd [1970] 2 QB 433, CA; Hammersmith and Fulham London Borough Council v Top Shop Centres Ltd [1990] Ch 237. 42 Moore v Ullcoats Mining Co Ltd (No.1) [1908] 1 Ch. 575; Calabar Properties v Seagull Autos [1969] 1 Ch 451. Where there is not an alternative claim but merely a claim for possession with further relief sought incidental thereto (eg mesne profits) that will amount to forfeiture: ibid. 43 In the same way as a person who has acquired title by adverse possession is entitled.

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Right of re-entry 29.24 of the Law of Property Act 1925 (as amended by the Reverter of Sites Act 1987) provides as follows: ‘(3) Where, by reason of an equitable right of entry taking effect, or for any other reason, a person becomes entitled to require a legal estate to be vested in him, then and in any such case the estate owner whose estate is affected shall be bound to convey or create such legal estate as the case may require.’ In the event of refusal, an action for specific performance or for a vesting order pursuant to section 9 of the Law of Property Act 1925 would seem to be the appropriate course of action.

Registered land 29.22 On the exercise of the right (whether legal or equitable), it will be necessary to apply to the Land Registry for change of ownership and to support the application with documentary evidence of title to the right of re-entry and, in the absence of an order of the court declaring that the right of re-entry had been effectively exercised, evidence (in the form of a statutory declaration exhibiting any relevant documents) sufficient to satisfy the Land Registrar: (i)

that the requirements for the exercise of the right existed and had been met (referring to those requirements and setting out the facts relied upon as showing that they had been met; (ii) that the right had been exercised (eg by physical entry accompanied by an announcement of its purpose); and (iii) that no right to relief existed.44 29.23 The land certificate (if available) should also be lodged. Upon the Land Registrar being satisfied, he will then effect the change of legal ownership by entering the name of the person who has re-entered on the proprietorship register. If the land certificate has been produced, it will be returned duly amended; but if it is unobtainable, the existing title will be closed and a new title opened with a new title number and a new land certificate.

Relief from forfeiture I Legal right of re-entry annexed to a legal rentcharge – non-payment of rent 29.24 In respect of re-entry for non-payment of the rent, the right to relief conferred by section 146(2) of the Law of Property Act 1925 does not apply.45 But forfeiture being involved, the High Court and (within the limits of its equitable jurisdiction) the county court, have general equitable jurisdiction to grant relief from the forfeiture. Whilst most of the cases of relief for non-payment of rent

44 As to relief, see immediately below. 45 Section 146(4) applies but it would seem to have no application to rentcharges in gross on either freehold or leasehold land: see the definition of ‘lessee’ in s 146(5)(b).

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29.25  Securing the indirect running of the burden of a positive covenant have been in connection with relief from forfeiture of a lease, there is no doubt that the jurisdiction extends to relief from forfeiture for non-payment of money in other transactions.46 Clearly, the closest analogy to the case of forfeiture for non-payment of a rentcharge in gross consists of the case of forfeiture of a lease for non-payment of rent annexed to the reversion and it is considered that the principles laid down in the numerous cases decided on the latter would be applied by the courts to the former so far as those principles are based on the general equitable jurisdiction of the court and not on statutory provisions which apply only to leases.47 It appears that those general equitable principles (extrapolated mutatis mutandis) are, in summary, as follows below.

Time for applying for relief 29.25

Relief may be applied for as follows:

(1) At any time whilst the rentcharge owner is proceeding by action to effect forfeiture, the person whose land is affected may apply to the court for relief either in the action or by separate proceedings.48 (2) Subject to (5) and (6) below, the person whose land is affected may apply for relief after re-entry has been effected without the assistance of the court.49 (3) After judgment but before execution by recovery of possession, relief may be applied for.50 (4) After possession has been recovered the court has jurisdiction to entertain an application for relief subject to (5) and (6) below. (5) After possession has been recovered an application may not be entertained if, although payment of the rent due and costs is tendered, there are other grounds of forfeiture besides the non-payment of rent.51 However, this would be unlikely to apply where the judgment is subsequently set aside for some reason.52 (6) After possession has been recovered the person suffering the forfeiture will not be granted relief after the expiration of six months from the date of such possession.53

46 See, eg Starside Properties Ltd v Mustapha [1974] 1 WLR 816, CA (relief in respect of payment of a deposit in a contract for the sale of land); Steedman v Drinkle [1916] 1 AC 275. 47 See the decision of Eve J in Sykes v Williams [1932] 2 Ch 190 granting relief for non-payment (over 19 years) of a perpetual yearly rentcharge – reversed on appeal [1932] WN 230 but on the ground that the right of re-entry was, like the rentcharge, statute-barred by lapse of time. See, also, the observations of Lord Wilberforce in Shiloh Spinners Ltd v Harding [1973] AC 691 cited below at para 29.32. 48 See Belgravia Insurance Co Ltd v Meah [1964] 1 QB 436. 49 Howard v Fanshawe [1895] 2 Ch 581; Lovelock v Margo [1963] 2 QB 786. 50 Phillips v Doelittle (1725) 8 Mod Rep 345. 51 Doe d Lambert v Roe (1835) 3 Dowl 557. 52 See Lord Oliver in Billson v Residential Ltd [1992] 1 AC 494, at p 543G. 53 This is by analogy to s 210 of the Common Law Procedure Act 1852 which conferred on the common law courts the equitable jurisdiction then currently being exercised by the Court of Chancery.

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Right of re-entry 29.27

Conditions for the grant of relief 29.26 The principle underlying relief for non-payment of rent was stated by Sir James Wigram V-C in Bowser v Colby54 in the following terms: ‘The object of the proviso in both cases is to secure to the landlord the payment of his rent; and the principle of the court is – whether right or wrong is not the question – that, if the landlord has his rent paid him at any time, it is as beneficial to him as if it were paid upon the prescribed day.’ (1) If relief is applied for before possession has been recovered, then it will generally, but not necessarily, be granted on tender or payment into court of all arrears together with interest and costs.55 (2) After possession has been recovered but before the expiration of six months, relief may be granted on the above terms if to do so would not cause inconvenience or hardship to the rentcharge owner.56

Relief from forfeiture II Legal right of re-entry annexed to a rentcharge – other covenants 29.27 In addition to the covenant to pay the rent, the rentcharge owner will usually have required the owner of the land affected to enter into positive or negative covenants to maintain (or increase) the value of the land. In such a case, it would also be usual for an express right of re-entry to be reserved to the rentcharge owner exercisable (as well as for non-payment of the rent) on breach of any of those other covenants. In such a case, because the covenants are entered into with the owner of a rentcharge, the provisions of section 146 of the Law of Property Act 1925 (including the provisions for relief from forfeiture contained in section 146(2)) will apply to the exercise of the right of re-entry in relation to those other covenants.57

54 55

(1841) 1 Hare 109, at 120. See, also, Gill v Lewis [1956] 2 QB 1. Goodright d Stevenson v Noright (1771) 2 Wm BI 746 (stay of proceedings ordered after judgment but before ejectment delivered); Doe d Harris v Masters (1824) 2 B & C 490 (relief refused after trial but before ejectment); Public Trustee v Westbrook [1965] 1 WLR 1160, CA (relief refused despite willingness to pay full amount of arrears because the case was ‘exceptional’ – 22 years having passed without payment of any rent). Relief may always be refused if the conduct of the applicant is such as to make it inequitable that relief should be given to him: see Bowser v Colby (1841) 1 Hare 109, at 132 and Gill v Lewis [1956] 2 QB 1 at 17. If the plaintiff obtains an order for forfeiture but without costs and an application for relief is dealt with subsequently, relief may be granted on terms of payment of the arrears, interest and costs of the summons for relief without any other costs: Croft v London and County Banking Co (1885) 14 QBD 347. 56 Eg, if the rentcharge owner has committed himself to letting the land: Stanhope v Haworth (1886) 3 TLR 34. 57 Below, para 29.29.

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29.28  Securing the indirect running of the burden of a positive covenant By that section 146(2), an application for relief can only be made: ‘Where the lessor58 is proceeding, by action or otherwise59, to enforce such a right of re-entry or forfeiture …’. Accordingly, if and so far as the former equitable jurisdiction could have been exercised on an application made after judgment and thereafter recovers possession or makes peaceable re-entry, any such jurisdiction is excluded by the subsection.60 29.28 Although relief from forfeiture cannot be granted under section 146(2) where possession has been recovered by re-entry pursuant to a judgment of the court, relief can still be sought and granted where the landlord has physically re-entered premises without obtaining a court order, since the party is still ‘proceeding’ to enforce his right of forfeiture within the meaning of section 146(2) by reliance on the right of re-entry where he has not obtained a judgment for possession.61 Further, even where there has been a court order followed by re-entry in reliance on it, that would not necessarily preclude a relief from forfeiture being sought and granted if the court order was set aside because it was based on a default judgment for example, or had been improperly obtained: see Lord Oliver in Billson v Residential Ltd.62 The same would seem to follow where the order was set aside on appeal.

Jurisdiction and conditions for grant of relief 29.29

Section 146(2) of the Law of Property Act 1925 provides:

‘… the court may grant or refuse relief, as the court, having regard to the proceedings and conduct of the parties under the foregoing provisions of this section, and to all the other circumstances, thinks fit; and in case of relief may grant it on such terms, if any, as to costs, expenses, damages, compensation, penalty, or otherwise, including the granting of an injunction to restrain any like breach in the future, as the court, in the circumstances of each case, thinks fit.’

58 To be read as meaning the grantor of the rentcharge and the persons deriving title under him: s 146(5)(c). 59 A landlord begins ‘proceeding’ to enforce his right of re-entry as soon as he serves a s 146 notice, and the tenant is thereupon entitled to apply for relief against forfeiture: Pakwood Transport v 15 Beauchamp Place (1978) 36 P&CR 112. 60 Rogers v Rice [1892] 2 Ch 170. See also Official Custodian for Charities v Parway Estates Developments Ltd [1985] Ch 151, at 165E, CA where Dillon LJ said: ‘Where the legislature steps in with particular legislation in a particular area, effect must be given to that legislation, and in that particular area any wider equitable jurisdiction is ousted’. This observation formed the basis of the Court of Appeal’s decision that the limited rights to relief from forfeiture provided for by s 146(10) ousted any wider equitable right to relief which might otherwise have existed. See also Billson v Residential Ltd [1992] 1 AC 494, at p 538F: ‘I accept that it is now settled law that a tenant cannot apply for relief after the landlord has recovered judgment for possession and has re-entered in reliance on that judgment’ (Lord Templeman, with whose speech the other Law Lord agreed). 61 Billson v Residential Apartment Ltd [1992] 1 AC 294 (HL). 62 [1992] 1 AC 494, at p 543G.

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Right of re-entry 29.32 29.30 If relief is granted it will usually63 be upon terms that the breach is remedied (if capable of being remedied) and that the applicant pays all the costs save in so far as they may have been increased by the rentcharge owner’s unsuccessful argument on a legal point64 or other consideration influencing the exercise of the court’s discretion as to costs.65

Relief from forfeiture III Equitable right of re-entry exercisable on breach of covenant (1)  Jurisdiction to grant relief 29.31 Where there is no rentcharge and a right of re-entry is reserved exercisable on breach of covenant (positive or negative), the right of re-entry is necessarily equitable.66 Further (by reason of the covenants being unrelated to a rentcharge) the statutory provisions for relief contained in section 146(2) of the Law of Property Act 1925 do not apply. 29.32 In Shiloh Spinners Ltd v Harding67 the question arose as to whether the court had a general equitable jurisdiction to grant relief in the context of the exercise of a right of re-entry in gross reserved on the occasion of the assignment of part of the premises comprised in a lease.68 Lord Wilberforce, with whose speech the other four Lords of Appeal69 expressed their agreement, said:70 ‘There cannot be any doubt that from the earliest times courts of equity have asserted the right to relieve against the forfeiture of property. The jurisdiction has not been confined to any particular type of case. The commonest instances concerned mortgages, giving rise to the equity of redemption, and leases, which commonly contained re-entry clauses; but other instances are found in relation to copyholds, or where the forfeiture was in the nature of a penalty.’ Later Lord Wilberforce, after reviewing certain conflicting judicial views, continued: ‘But it is consistent with these principles that we should reaffirm the right of courts of equity in appropriate and limited cases to relieve against forfeiture for breach of covenant or condition where the primary object of the bargain is to secure a stated result which can effectively be attained when the matter comes before the court, and where the forfeiture provision is added by way of security for the production of that result. The word ‘appropriate’ involves

63 But not necessarily. The discretion is unfettered by rigid rules: Hyman v Rose [1912] AC 623 (reinstatement to comply with covenant postponed to the end of the lease subject to a sum being placed on deposit sufficient to secure reinstatement); Duke of Westminster v Swinton [1948] 1 KB 524 (reinstatement postponed to a future date, national shortages and restrictions preventing earlier reinstatement). 64 Howard v Fanshawe [1895] 2 Ch 581. 65 See Croft v London and County Banking Co (1885) 14 QBD 347. There is a wide discretion as to costs under the CPR. 66 Above, para 29.5. 67 [1973] AC 691, HL. 68 Such a right of re-entry is on all fours for present purposes with a right of re-entry in gross excercisable in respect of a fee simple estate. 69 Viscount Dilhorne and Lords Pearson, Simon and Kilbrandon. 70 At pp 722A–B.

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29.33  Securing the indirect running of the burden of a positive covenant consideration of the conduct of the applicant for relief, in particular whether his default was wilful, of the gravity of the breaches, and of the disparity between the value of the property of which forfeiture is claimed as compared with the damage caused by the breach.’ Lord Wilberforce concluded: ‘The present case, in my opinion, falls within the class of case in which it would be possible for a court of equity to intervene. When the appellants assigned a portion of their leased property, retaining the rest, which adjoined and was supported by the portion assigned, they had an essential interest in securing adequate protection for their buildings, in having the entire site fenced, in preventing unauthorised access through the assigned property. The covenants were drafted accordingly. The power of re-entry was inserted by way of reinforcement of the contractual obligations which it must have been perceived might cease to be enforceable as such.71

(2)  Principles applicable to exercise of jurisdiction 29.33 The general principles which apply were stated by Lord Wilberforce72 in the following terms: ‘Failures to observe the covenants having occurred, it would be right to consider whether the assignor73 should be allowed to exercise his legal rights if the essentials of the bargain could be secured and if it was fair and just to prevent him from doing so. It would be necessary, as stated above, to consider the conduct of the assignee, the nature and gravity of the breach, and its relation to the value of the property which might be forfeited. Established and in my opinion sound principle requires that wilful breaches should not, or at least should only in exceptional cases, be relieved against, if only for the reason that the assignor should not be compelled to remain in a relation of neighbourhood with a person in deliberate breach of his obligations.’74 29.34 These principles clearly embody a much higher set of requirements than those applicable to relief from forfeiture for non-payment of a rent.75 In the 71 In fact, the positive obligations had, when the case was brought, become unenforceable since the original purchaser of the part assigned had effected a further assignment to the defendant against whom the right of re-entry for breaches of (unenforceable) covenants was now sought to be exercised. 72 At 725D–F. 73 Referring to a person in the position of the appellant company which had assigned part of the property comprised in the lease and reserved to itself a newly-created right of re-entry in gross exercisable on breach of the covenants contained in the assignment. 74 Having considered the facts, Lord Wilberforce then concluded that the breaches, having extended over four years and there being no evidence that the default would be speedily and adequately made good and there being no disproportion between the expenditure required and the value of the interest involved as to amount to a case of hardship, relief against the forfeiture should be refused. 75 In Bhimji v Salih 1978 B No 1099 (unreported, 4 February 1981) a Court of Appeal case, relief was granted by the Court of Appeal to a tenant who had lodged all the arrears with his solicitors by the time of the appeal even though the court found that he had ‘an appalling record as a tenant, had broken other covenants in the lease and was guilty of “thoroughly unmeritorious behaviour”’. It may be, however, that in relation to equitable relief from forfeiture also, modern-day courts would be more keen to grant relief where possible, given the draconian consequences otherwise, than the comments of Lord Wilberforce in the early 1970s would suggest.

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Right of re-entry 29.36 case itself, Lord Wilberforce indicated that he shared the same view as the judge at first instance (Burgess V-C) as to whether the case was one in which relief should, according to established principles, be granted. Dealing with the facts, Lord Wilberforce said:76 ‘But I have examined in detail the evidence given, the correspondence over a period of four years, the photographs and plans of the site. All this material establishes a case of clear and wilful breaches of more than one covenant which, if individually not serious, were certainly substantial; a case of continuous disregard by the respondent of the appellants’ rights over a period of time, coupled with a total lack of evidence as to the respondent’s ability speedily and adequately to make good the consequences of his default, and finally a failure to show any such disproportion between the expenditure required and the value of the interest involved as to amount to a case of hardship. In my opinion the case is not, on established principles, one for relief.’

Third party may now take a right of re-entry 29.35

Section 4(3) of the Law of Property Act 1925 provides as follows:

‘(3) All rights of entry affecting a legal estate which are exercisable on condition broken or for any other reason may after the commencement of this Act, be made exercisable by any person and the persons deriving title under him, but in regard to an estate in fee simple (not being a rentcharge held for a legal estate) only within the period authorised by the rule relating to perpetuities.’ Accordingly, unlike the position before 1926, a right of re-entry, on its initial creation, may now be reserved in favour of a third party. Further, as to the formalities, section 56(1) provides: ‘A person may take … the benefit of any condition, [or] right of entry … over or respecting land … although he may not be named as a party to the conveyance or other instrument’.77

Application of the perpetuity rule Position in relation to instruments taking effect before 6 April 2010 29.36 In instruments taking effect prior to 6 April 2010, except where the right of re-entry is in respect of a legal rentcharge, it could not be made exercisable beyond the duration of the relevant perpetuity period78 and would be void from 76 [1973] AC 691, at pp 725G–726A. 77 For the limits of operation of this provision see above, paras 3.4 (restrictive covenants) and 26.4 et seq (positive covenants). 78 See, post-1925, s 4(3) of the Law of Property Act 1925 and s 11(1) of the Perpetuities and Accumulations Act 1964. As to the position before 1926, there is doubt whether the perpetuity rule applied to a right of re-entry exercisable on non-payment of a rentcharge. Easton, The Law of Rentcharges (2nd edn, 1931) at 26, is firmly of the view that it was subject to the rule on the ground that there was no good reason for distinguishing, in this respect, between the right of re-entry exercisable on non-payment of rent and a right of re-entry exercisable on breach of any of the other covenants normally entered into on the grant of the rentcharge – the latter

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29.37  Securing the indirect running of the burden of a positive covenant the outset where it purported to do so. This rule continues to apply to a right of re-entry created by an instrument taking effect prior to 6 April 2010. 29.37 However, in three respects the application of the perpetuity rule was affected by the Perpetuities and Accumulations Act 1964 as follows: (1) An equitable right of re-entry created on or after 16 July 1964 which was not confined to the perpetuity period was no longer void ab initio, but is be valid for such period as is provided for by section 3 of the Act. If it has not become entirely spent by its exercise during that period it will then become void, but without prejudice to anything done before that time. (2) As an alternative to limiting the exercise of an equitable right of re-entry to a perpetuity period fixed by reference to a specified life or lives in being plus 21 years, a period not exceeding 80 years was able to be specified as the perpetuity period.79 (3) Before the 1964 Act there was a difference of opinion as to whether section 4(3) of the Law of Property Act 1925 gave exemption from the perpetuity rule to a right of re-entry only in so far as that right applied to non-payment of rent or whether it also gave exemption where the right of re-entry applied to breach of other covenants.80 However, section 11(1) of the 1964 Act provides: ‘(1) The rule against perpetuities shall not apply to any powers or remedies for recovering or compelling the payment of an annual sum to which section 121 or 122 of the Law of Property Act 1925 applies, or otherwise becoming exercisable or enforceable on the breach of any condition or other requirement relating to that sum.’ Section 121 of the Law of Property Act 1925 applies (inter alia) to a rentcharge issuing out of land other than one incident to a reversion and section 122 applies to a rentcharge issuing out of another rentcharge – neither being incident to a reversion. 29.38 Section 11(1) of the 1964 Act accordingly gave freedom from perpetuity to a right of re-entry exercisable in respect of breach of any condition or covenant ‘relating to the sum’ payable under the rentcharge. This did not give carte blanche to the indirect enforcement in perpetuity by a right of re-entry attached to a rentcharge of any covenant but only of covenants which have some direct or indirect connection with the rent payable. Thus, a right of re-entry exercisable on breach of a covenant by the owner of the land affected to pay the rent, to build, to maintain buildings, to insure, not to make any alterations or additions to buildings without the consent in writing of the rent owner, and to contribute to the cost of maintaining the banks of a river or a sea wall necessary having been held to be subject to the rule: Dunn v Flood (1883) 25 ChD 629; on appeal (1885) 28 ChD 586. But the contrary view is expressed in Key and Elphinstone’s Precedents in Conveyancing (15th edn, 1953) at 811 note 6, the reasoning being that a right of entry (ie a remedial right not a forfeiting right) is necessary to secure payment of the rent and so could never have offended the modern rule of perpetuity since that rule was a branch of public policy and not a fetish, and that (on the authority of Litt s 347) a right of entry and a right of re-entry are all one. The view of Williams on Vendor and Purchaser (4th edn) vol 1, p 694, seems to be in line with that of Easton. 79 Section 1 of the Perpetuities and Accumulations Act 1964. 80 Eg, Easton at p 27, takes the latter view but Key and Elphinstone at p 812 note 7 express the former view. Morris and Leach The Rule against Perpetuities (2nd edn, 1962) at p 218 express doubt.

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Right of re-entry 29.40 to prevent flooding of the land, would all have qualified for exemption. But a right of re-entry exercisable on breach of a covenant which benefited adjoining property or (collaterally) the rentcharge owner but not the rentcharge, such as a covenant to supply water or to provide support for adjoining buildings or a covenant to pay the rent owner a capital sum in the event of planning permission for development being obtained did not qualify for exemption. It is considered that only if the right of re-entry was capable of existing in perpetuity was it capable of being ‘annexed, for any purpose, to a legal rentcharge’ so as to be a legal interest under section 1(2)(e) of the Law of Property Act 1925.81 If a right of re-entry is to be made exercisable on non-performance of covenants of both classes, then in order not to give rise to questions of the severability of a right of re-entry, separate rights of re-entry should be reserved in respect of each class – the one annexed to the legal rentcharge being legal and without time limit, the other (exercisable on non-performance of collateral covenants) being equitable and restricted to a suitable perpetuity period.82

Position in relation to instruments taking effect on or after 6 April 2010 29.39 The rule against perpetuities does not apply to rights of re-entry contained in instruments taking effect on or after 6 April 2010 by reason of the Perpetuities and Accumulations Act 2009 (save as there set out in relation to trusts).83

Application of the Limitation Act 1980 to rights of re-entry and rentcharges 29.40

The relevant statutory provisions are as follows.

Section 15(1) of the Limitation Act 198084 provides: ‘No action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued 81 In this connection, the words ‘annexed, for any purpose, to a legal rentcharge’ must surely imply any purpose for which a right of re-entry is capable of being annexed to a legal rentcharge. A right of re-entry exercisable on an event which did not directly or indirectly affect the rent can hardly warrant the description of being ‘annexed’ to the rentcharge. The right of re-entry and the rentcharge would simply be two independent transactions. Equally, the words of s 4(3) ‘rights of entry … in regard to an estate in fee simple (not being a rentcharge held for a legal estate)’ must similarly refer to a right of entry which is relevant, or annexed, to a legal rentcharge. 82 It is submitted that the definition of ‘estate rentcharge’ contained in s 1(4)(a) of the Rentcharges Act 1977 as including a rentcharge created for the purpose ‘of making covenants to be performed by the owner of the land affected by the rentcharge enforceable by the rent owner against the owner for the time being of the land’ does not enlarge the scope of the covenants on breach of which a right of re-entry annexed to a legal rentcharge may operate in perpetuity. This definition is ancillary to s 1(3) which provides (negatively) that the section (prohibiting the creation of future rentcharges) ‘does not prohibit the creation of a rentcharge – (c) which is an estate rentcharge’. It therefore does no more than permit the continued creation of rentcharges which make covenants ‘enforceable’ against the owner for the time being of the land but does not enlarge their scope for doing so. 83 Brought into force on 6 April 2010 by the Perpetuities and Accumulations Act (Commencement) Order 2010, SI 2010/37. 84 Replacing s 4(3) of the Limitation Act 1939.

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29.41  Securing the indirect running of the burden of a positive covenant to him or, if it first accrued to some person through whom he claims, to that person.’ Paragraph 7(1) of Schedule 1 to the Act provides: ‘(1) Subject to sub-paragraph (2) below,85 a right of action to recover land by virtue of a forfeiture or breach of condition shall be treated as having accrued on the date on which the forfeiture was incurred or the condition broken.’ 29.41 In the case of a continuing breach of condition, such as failure to keep buildings in repair, the cause of action will repeatedly accrue during the continuance of the breach.86 Paragraph 8 of Schedule 1 provides (so far as material): ‘(1) No right of action to recover land shall be treated as accruing unless the land is in the possession of some person in whose favour the period of limitation can run (referred to below in this paragraph as “adverse possession”); … (3) For the purposes of this paragraph— (a) possession of any land subject to a rentcharge by a person (other than the person entitled to the rentcharge) who does not pay the rent shall be treated as adverse possession of the rentcharge;’ 29.42 Accordingly, subject to the right of action having accrued under Schedule 1 and subject to the provisions of sections 28 (disabilities), 29(2) (acknowledgements in writing) and 32 (cases of fraud, concealment or mistake), if the rent is unpaid for a continuous period of 12 years, the rentcharge is extinguished and, with it, any covenant to pay the rentcharge.87 Further, a right of re-entry exercisable on non-payment is also extinguished since such a right of re-entry is treated as ancillary to the rentcharge and to the covenant to pay and falls with them.88 29.43 On the other hand, if there are other covenants entered into by the owner of the land affected which, when considered in isolation from the rentcharge, are capable of being performed or observed in their own right, then there would seem to be no reason why those covenants should not continue to exist and a right of re-entry exercisable on their non-performance or non-observance should therefore remain valid so far as concerns the indirect enforcement of those covenants. Section 19 provides: ‘No action shall be brought, or distress made, to recover arrears of rent,89 or damages in respect of arrears of rent, after the expiration of six years from the date on which the arrears became due.’

85 86

Sub-paragraph (2) deals with interests in reversion or remainder. As to the distinction between ‘once and for all’ breaches and continuing breaches, see the cases on breaches of covenant in leases. 87 Section 17; Sykes v Williams [1932] 2 Ch 190 (reversed on appeal [1932] WN 230, but not on these points). 88 Sykes v Williams, above (CA reversing Eve J on this point). 89 Defined by s 38(1) as including a rentcharge.

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Right of re-entry 29.47 So long as the rentcharge itself continues to exist, the effect of the above provision is merely to bar the legal remedies of action and distress for arrears of rent falling due more than six years previously – it does not extinguish the legal liability to pay. Accordingly, if a right of re-entry is exercised in respect of non-payment of rent recently falling due, then it seems likely that the owner of the land affected (the terre tenant) who claimed relief from the forfeiture, would only obtain it on terms that he paid all arrears including any which fell due more than six years before the right of re-entry was exercised.

Practical use of the right of re-entry in connection with positive covenants 29.44 In the light of the foregoing discussion, the practical application of this mechanism will now be briefly considered.

(1) Legal right of re-entry exercisable on breach of condition relating to a legal rentcharge 29.45 This involves the creation of a rentcharge to which the right of re-entry is ancillary. To be excepted from the prohibition on the creation of rentcharges contained in section 2(1) of the Rentcharges Act 1977, the rentcharge must be an ‘estate rentcharge’ as defined by that Act. For this purpose, the sum payable under the rentcharge must either be nominal only, or represent ‘a payment for the performance by the rent owner of any such covenant as is mentioned in subsection (4)(b) above which is reasonable in relation to that covenant’. The covenants mentioned in subsection (4)(b) are ‘covenants for the provision of services, the carrying out of maintenance or repairs, the effecting of insurance or the making of any payment by him for the benefit of the land affected by the rentcharge or for the benefit of that and other land’. 29.46 A legal right of re-entry annexed to an estate rentcharge will, as a legal right, have the greatest degree of enforceability in unregistered land, as against subsequent purchasers of a legal estate in the land. However, with the advent of universal compulsory registration of title this advantage is clearly of diminished significance. Additionally, the following points are to be noted. First, it will only be suitable as a means of enforcing obligations which satisfy the requirement of being obligations whose performance is of some benefit to the rentcharge owner as a person interested in receiving rent. Covenants which exclusively benefit land which he or some third person occupies will not satisfy this requirement. Second, prior to the exercise of the right, the notice provisions of section 146 (1) of the Law of Property Act 1925 will have to be complied with. 29.47

The way in which this works is as follows.

If, on a sale of land, the vendor wishes to impose positive obligations on the purchaser, such as a covenant to build, or to keep buildings in repair and insured then, since these obligations are such as would operate for the protection of the value of a rentcharge on the land (although they may also, or even 749

29.48  Securing the indirect running of the burden of a positive covenant primarily, benefit the vendor’s adjoining land), a nominal90 rentcharge would be reserved out of the land supported by covenants to pay, build and repair (together with any appropriate restrictive covenants) as required and providing for a right to re-enter on non-payment of the rentcharge or breach of any of the covenants. Provision could be made for a prior notice to be served along the lines of a section 146 notice91 and for the right of re-entry to be exercisable only if the requirements of the notice are not met within the (reasonable) period specified in the notice. If the land affected is such that it might in the future be split up into parcels in different ownership then provision should also be made for the severance of the rentcharge and its accompanying covenants and right of re-entry accordingly. Although the burden of the positive covenants will not run with the land (and the same will apply to the restrictive covenants unless they touch and concern land retained by the vendor) if the terms of the covenants are not complied with (no matter by whom or at how remote a time in the future), or, of course, if the rent is not paid, then the right of re-entry will (subject to service of the appropriate notice or notices92) become exercisable. 29.48 In this connection, the right of re-entry in Shiloh Spinners Ltd v Harding93 was expressed to be exercisable ‘If … there shall be any failure to perform or observe any of the covenants herein contained … on the part of the Purchaser’. It was conceded that the covenants were not directly enforceable against the respondent first, because in so far as they were positive no action would lie, and, secondly, in so far as they were restrictive an action for breach would not lie because the covenants had never been registered under the Land Charges Act 1925. This being so, it was then argued that the event upon which the right of re-entry was expressed to be exercisable – ‘failure to perform or observe any of the covenants’ could never occur, the covenants being unenforceable, and that therefore the right of re-entry had become inoperative and unenforceable. As Russell LJ pointed out when the case was before the Court of Appeal:94 ‘It would have been possible as a matter of drafting, though perhaps wordy, to turn the stipulations into conditions eo nomine on non-performance of which the right of re-entry should arise, once the covenant qua covenant became no longer directly enforceable. In such a case the right of re-entry would be exercisable on failure of a condition and be the only remedy available, without any obligation on anyone to fulfil the condition other than the pressure exerted by the need to avoid re-entry. In my judgment it is proper to regard this document as treating the stipulations, when not directly enforceable, as conditions.’ 29.49 For directness of expression, reference has been made throughout the text above to a right of re-entry being made exercisable ‘on non-performance of a covenant’, against the background in this context of the benevolent approach to construction displayed by the Court of Appeal and the House of Lords.

90 91 92 93 94

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Below, para 29.68. As to the need for which, see para 29.16 above. Above, para 29.15 et seq. [1973] AC 691. [1972] Ch 326, 346F–H, whose judgment on this point met with the ‘entire satisfaction’ of Lord Wilberforce on appeal to the House of Lords.

Right of re-entry 29.52 However, the technical incongruity does not feature well in a professionally drafted document and for the avoidance of any doubt, although at the inevitable cost of wordiness referred to by Russell LJ, the right of re-entry should be expressed to be made exercisable ‘if and as often as an event shall occur which, if the covenants on the part of [the Purchaser] were enforceable, would constitute a breach of one or more of the covenants’.

Assigning the benefit of a legal right of re-entry 29.50 At common law, neither a covenant to pay a rentcharge nor any other covenant connected with it runs with the rentcharge.95 In the absence of specific authority96 it would seem to follow that a right of re-entry exercisable on non-performance of any such covenant did not run with the land.97 In the case of covenants entered into after 1925 which relate to ‘land’, it has been held98 that the effect of section 78(1) of the Law of Property Act 1925 is to annex the benefit of such covenants to the land. Since the Act defines ‘land’ as including ‘a rent and other incorporeal hereditaments’ it is arguable that the above covenants would, if the rentcharge was created after 1925, now be annexed to and therefore presumably run with the rentcharge. 29.51 If so, then a right of re-entry exercisable either on non-payment of the rentcharge or on breach of any of the rentcharge-supporting covenants would perhaps also run with both. In this event, the assignment of the rentcharge would carry with it (without express mention) the benefit of the annexed covenants and the right of re-entry. However, in view of the uncertainty, it is clearly to be recommended that on any assignment of the rentcharge, the benefit of all associated covenants and rights or re-entry should also be expressly assigned.99 Since the rentcharge and the right of re-entry are legal interests, the assignment must be by deed.100

(2)  The equitable right of re-entry 29.52 Unlike the position in the case of a legal right of re-entry annexed to a legal rentcharge, the events upon which an equitable right of re-entry may be exercised are at large.

95 96

Randall v Rigby (1838) 4 M & W 130; Grant v Edmondson [1931] 1 Ch 1, CA. Havergill v Hare (1616–18) Cro Jac 510 held that a remedial right of entry ran with the rentcharge. Even assuming this case applies equally to a forfeiting right of re-entry, the analogy would be to a right of re-entry running with the rentcharge and not with any associated covenants which themselves did not run with the rentcharge. 97 The reference in s 1(2)(e) of the Law of Property Act 1925 to a right of re-entry being ‘annexed, for any purpose, to a legal rentcharge’ would seem, despite the words ‘for any purpose’ to be confined to the obligation imposed by the rentcharge itself and not to refer to a right of re-entry annexed to non-performance of associated covenants. 98 Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594, CA. For further consideration of this case, see above, para 6.31. 99 Whether, in any particular case, an assignment of the rentcharge would be treated as including an assignment of the associated covenants and rights or re-entry is a question of construction: cf Griffith v Pelton [1958] Ch 205, CA. 100 Section 52(1) of the Law of Property Act 1925. The covenants themselves, being choses in action, could be assigned at law by writing not executed as a deed under s 136(1) of the Act.

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29.53  Securing the indirect running of the burden of a positive covenant It can be reserved or granted to ensure the indirect enforcement of any covenant, positive or restrictive, regardless of the content of the covenant. Further, its enforcement is not subject to the requirements of section 146(1) of the Law of Property Act 1925. In registered land, it is in no worse position, vis-à-vis enforcement against the owner for the time being of the land, than a legal  right of re-entry, though in relation to unregistered land, see paras 29.12–29.13 above. The only obvious additional disadvantage from which it suffered where created by an instrument coming into force before 6 April 2010 as compared with a legal right of re-entry was that its exercise must have been restricted to a period permitted by the perpetuity rule. However, this could usually be made to cover a period in the region of 100 years by reference to an updated Re Villar101 type formula. Within these ambits, it is capable of giving effect to a desire to secure the running with the land of positive (or restrictive) obligations. 29.53 Its effectiveness lies, of course, in the ability of the person entitled to the right of re-entry to obtain ownership of the land affected in the event of non-compliance with the requirements of a covenant. The owner for the time being of the land affected can usually be expected to prefer to comply with the obligations imposed by the (unenforceable) covenants rather than forfeit his ownership of the land pursuant to the exercise of the enforceable right of re-entry. 29.54 This type of right of re-entry is therefore well suited to securing the performance by the owner for the time being of land of any of the following types of obligations: (1) to do something positive on the land, such as to erect and maintain buildings or to maintain existing buildings; (2) not to do something, whether in respect of the use of the land or otherwise, such as (in the latter category) not to object to an application for planning permission,102 not to sue in respect of a nuisance or not to sell to anyone under a specified age; (3) to make some monetary payment, such as to indemnify against liability for breach of a covenant or non-payment of a rentcharge, to contribute towards the cost of maintaining roads and passageways and means of supply of gas, electricity, water and telephone services, to pay an increased purchase price in the event of planning permission being obtained which increases the market value of the land.

Monetary obligations – capital sum – right of re-entry or charge? 29.55 In relation to the imposition of obligations for the payment of a recurring (if variable) sum, clearly the imposition of a rentcharge supported by a right of re-entry is a suitable mechanism. But in relation to obligations to

101 [1929] 1 Ch 243, CA. As to the need for updating, see Re Leverhulme (No 2) [1943] 2 All ER 274. 102 Which is capable of being a valid contractual provision: see Fulham Football Club Ltd v Cabra Estates plc (1993) 65 P&CR 284, CA.

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Right of re-entry 29.58 pay a capital sum of an essentially non-recurring nature, the rentcharge is not available and the main choice is between a charge by way of mortgage or a right of re-entry. As between the two, the right of re-entry would appear to provide the better security for payment as compared with the charge since the latter, but not the former, is afflicted by unresolved problems of priority where the land in question is subsequently mortgaged to a third party.

Example – increased purchase price on obtaining planning permission 29.56 A not uncommon case is where, on a sale of land with development potential, the vendor wishes to take a share of any increase in the market value of the land which might result in the event of the occurrence of some specified event, most commonly upon the owner for the time being obtaining planning permission for the development of the land or any part (an ‘overage clause’). 29.57 Clearly a covenant by the purchaser to pay a proportion of the increase in value would not itself be binding on a successor in title. Further, if the land is charged by way of legal mortgage as security for such a future contingent payment (‘the contingent mortgage’) then if, before any payment becomes due, the land is mortgaged to a third party to secure a loan which is actually advanced or agreed to be advanced, that later mortgage would appear to obtain priority over the contingent mortgage. Only when the amount of the increased purchase price is ascertained and becomes payable will any sum be charged under the contingent mortgage and it is by no means clear that (in the absence of agreement with the later mortgagee) the contingent mortgagee would be able to tack that sum so as to obtain priority over the later mortgagee. In this connection, the amount of the increased purchase price which becomes charged under the contingent mortgage is clearly not an existing advance and it will only be able to be tacked if permitted under the general law as modified by section 94 of the Law of Property Act 1925 in the case of unregistered land or section 30 of the Land Registration Act 1925 in the case of registered land pre-13 October 2003, or section 49 of the Land Registration Act 2002 after that date. 29.58 Under the pre-1926 law, future capital sums to be secured by a mortgage which had not become charged at the time of the creation of a second mortgage, could not, on crystallisation be tacked as against the later mortgagee if, at the date of crystallisation, the earlier mortgagee had notice of the later mortgage.103 In one respect, the doctrine of tacking has been extended by the 1925 legislation, namely by permitting tacking where the mortgage imposes an obligation on the mortgagee to make such further advance104 – subject, in the case of registered land, to that obligation being noted on the register.105 However, in the absence

103 See Bradford Banking Co Ltd v Briggs & Co Ltd (1886) 12 App Cas 29, HL. 104 Thus reversing West v Williams [1899] 1 Ch 132 where the Court of Appeal held that, after notice of a later mortgage, a prior mortgagee could not tack even though he was under an obligation to make further advances. 105 Section 94(1)(c) of the Law of Property Act 1925 and s 30 of the Land Registration Act 1925 now replaced by s 49 of the Land Registration Act 2002, and subject to the rules there referred to.

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29.59  Securing the indirect running of the burden of a positive covenant of any decision on the point, it seems doubtful whether a sum which becomes automatically charged on the happening of a future contingent event falls within the description either of ‘further advances’ made by the mortgagee or (even more doubtfully) within the description of an advance made by the mortgagee under an obligation imposed on him to make further advances.

(2)  RIGHT OF ENTRY Nature of a right of entry 29.59 The type of right of entry now being considered is the ‘satisfying’ or ‘remedial’ right of entry as opposed to the ‘absolute’ or ‘forfeiting’ right of re-entry considered above. The power conferred by this type of right of entry is to enter the subjective land for the purpose of making good a breach of obligation by the owner of the land. A statutory example occurs in section 121(2) of the Law of Property Act 1925 in relation to the rights conferred upon the owner of a rentcharge to enter the land and take the income thereof until arrears of the rentcharge and costs are fully paid. 29.60 In the case of leases, it is common form to reinforce the remedies available for breach of the tenant’s covenant to repair not only by reserving a forfeiting right of re-entry but also a right of entry entitling the landlord to enter and carry out the repairs and charge the cost to the tenant.106 Each of the rights of entry just referred to is capable of existing as a legal interest in the land under section 1(2)(e) of the Law of Property Act 1925 and this no doubt accounts for their continued widespread use. Conversely, all rights of entry exercisable in respect of freehold land which are not annexed to a legal rentcharge can only exist as equitable interests.107 If, on a transfer of freehold land, the transferee covenanted to erect and maintain a fence and in the event of any failure to do so a right was reserved to the transferor to enter and make good the failure at the expense of the transferee, such right would exist as an equitable right of entry only. 29.61 The question whether, if a rentcharge is created and covenants (in addition to the covenant to pay the rentcharge) are taken for the benefit of the rentcharge owner with a right of re-entry being made exercisable on nonperformance of those covenants, such right of re-entry is a legal or equitable right, is considered when dealing with rentcharges below. What is said there in relation to the question whether such rights of re-entry are legal or equitable applies mutatis mutandis to rights of entry exercisable on non-performance of such covenants.

106 See, for example, Key and Elphinstone’s Precedents in Conveyancing (15th edn) p 1016, para 29. 107 Section 1(3) of the Law of Property Act 1925.

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Right of entry 29.64

Rights of entry and the perpetuity rule 29.62 By section 162(1)(d) of the Law of Property Act 1925, the perpetuity rule was declared not to apply to four major groups of right of entry including a right of entry for the purpose of: ‘(iii) executing repairs, alterations, or additions to any adjoining land, or the buildings and erections thereon; (iv) constructing, laying down, altering, repairing, renewing, cleansing, and maintaining sewers, watercourses, cesspools, gutters, drains, water-pipes, gas-pipes, electric wires or cables or other like works.’108 Many (if not most) rights of entry exercisable on non-performance of positive covenants will fall within the above paragraphs and accordingly will be able to be exercised in perpetuity. 29.63 However, to enable the person exercising the right of entry to reclaim the costs and expenses of doing so from a successor in title of the covenantor, it was necessary for the instrument reserving the right of entry to provide for the costs and expenses incurred to be a charge on the land. Such a charge, being an interest in land, was only valid if it came into existence during a period which fell within the perpetuity rule and its priority would be subject to any intervening charge.109 The provisions in section 162(1)(d) of the LPA 1925 still apply in relation to instruments taking effect before 6 April 2010. In relation to instruments taking effect on and after 6 April 2010, the rule against perpetuities ceases to have effect altogether in relation to rights of entry affecting a legal estate by section 1 of the Perpetuities and Accumulations Act 2009.110

The running of the burden of a right of entry 29.64 ●●

The rights of entry are as follows:

Legal right of entry Where annexed to a legal rentcharge affecting a registered estate, the reservation or grant of a right of entry amounts to a ‘registrable disposition’111 and accordingly requires to be completed by registration

108 But a right to construct a sewer and lay drains on another’s land does not carry with it a right to use them. Although the sewers and drains themselves could be constructed outside the limits of the perpetuity rule, any easement of drainage thereover which does not come into existence within those limits will be void: see Dunn v Blackdown Properties Ltd [1961] Ch 433, as now modified by s 3 of the Perpetuities and Accumulations Act 1964. 109 Cf Westminster City Council v Haymarket Publishing Ltd [1981] 1 WLR 677, CA (priority of future statutory charge pursuant to statute). 110 The exceptions laid down in s 162(1)(d) (above) are therefore unnecessary and by s 4 of the 2009 Act are correspondingly abolished from 6 April 2010 onwards. By s 1(9) of the 2009 Act, s 4(3) of the Law of Property Act 1925 is from the same date amended to reflect the abolition of the rule against perpetuities in relation to these rights of entry. 111 See s 27(2)(e) of the Land Registration Act 2002 read in conjunction with s 1(e) of the Law of Property Act 1925.

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29.65  Securing the indirect running of the burden of a positive covenant under section 29 of the Land Registration Act 2002. The person with the benefit of the rentcharge must be entered in the register of title to his rentcharge as the proprietor of the right of entry, and a notice must be entered in the charges register of the registered title affected. A legal right of entry affecting an unregistered estate is binding on the whole world. ●●

Equitable right of entry Unless annexed to a legal rentcharge, a right of entry exercisable in respect of freehold land will take effect as an equitable interest only. Where a right of entry is equitable (just as where it is legal – above), in relation to registered land, it will, in order to bind the land in the hands of a person taking under a registered disposition for valuable consideration, require to be protected on the entry of a notice in the register.112 As an equitable interest in unregistered land it will be binding on the whole world except a bona fide purchaser of a legal estate in the land who takes for value and without notice of the right. Such a right does not fall within any of the classes of ‘land charge’ set out in section 2 of the Land Charges Act 1972 and its enforcement is therefore unaffected by that Act.113

29.65 If, as will usually be the case, the equitable right of entry is supported by a right to impose a charge on the land in respect of the costs and expenses incurred by the exercise of the right then, assuming the right is an equitable interest in the land,114 in unregistered land its enforcement against a purchaser of a legal estate in the land affected would depend upon the operation of the equitable doctrine of notice.115 In registered land, it will require protection by notice in order to be binding on a person taking a registered disposition for valuable consideration. However, in view of the restrictions on tacking contained in section 94(1) of the Law of Property Act 1925, it is considered priority could probably not be obtained over a subsequent chargee of the land in respect of sums becoming charged on the land after the creation of the subsequent charge.116

The running of the benefit of a right of entry 29.66 Except (it would appear) in the case of a rentcharge,117 there is no authority turning on the question whether a right of entry can be annexed to land which it benefits. Accordingly, even if, on its creation, words of annexation

112 See s 29 of the Land Registration Act 2002. 113 See Shiloh Spinners Ltd v Harding [1973] AC 691, the reasoning in which appears to apply to equitable rights of entry as well as to equitable rights of re-entry. 114 Quaere whether before any money is actually charged, it can be described as a general equitable charge. 115 It would not be registrable as a general equitable charge under the Land Charges Act 1972 by reason of s 2(4)(iii)(c) of the Act. 116 See, further, para 29.58 above. 117 By virtue of s 1(2)(e) of the Law of Property Act 1925. Above, para 29.5.

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Use of the rentcharge 29.69 were employed, the safest course is to ensure that, on every disposition of the benefited land, the benefit of the right of entry (and any ancillary right to impose a charge on the subjective land) is expressly assigned.118

Practical use of the right of entry 29.67 The object of the right of entry is to enable the person entitled to the right to enter the land of another and carry out works there, such as repairs to buildings, erections and service media. Whilst it can exist in gross, it will usually be reserved as a remedy for nonperformance of a positive covenant to execute such works entered into by the owner of the land. By itself, it would not enable the person entering and carrying out the works to exact payment of the costs and expenses from the owner of the subjective land. It will thus usually be accompanied by a provision that the costs and expenses incurred shall become a charge on the land. Subject to the limitations already considered above, both the right of entry and the charge will then be enforceable against subsequent owners of the land notwithstanding that the burden of the covenant itself is not binding on such owners.

(3)  USE OF THE RENTCHARGE 29.68 In the context of a mechanism for making the burden of positive covenants run with the land, a rentcharge created on or after 22 July 1977 will be valid only if it is an ‘estate rentcharge’ as defined in section 2(4) of the Rentcharges Act 1977.119 This provides for two types of estate rentcharge, namely: (1) (section 2(4)(a)) a nominal120 rentcharge: ‘created for the purpose of … making covenants to be performed by the owner of the land affected by the rentcharge enforceable by the rent owner against the owner for the time being of the land’; (2) (section 2(4)(b)) a rentcharge for payment of an amount reasonably required121 for: ‘meeting, or contributing towards, the cost of the performance by the rent owner of covenants for the provision of services, the carrying out of maintenance or repairs, the effecting of insurance or the making of any payment by him for the benefit of the land affected by the rentcharge or for the benefit of that and other land.’ 29.69 Estate rentcharges of type 1 have already been fully considered in dealing with legal rights of re-entry above.122 The creation of a nominal

118 In the case of an equitable right of entry, writing is sufficient: s 53(1)(c). 119 Section 2(3) of the Rentcharges Act 1977. 120 See s 2(5) of the Rentcharges Act 1977. 121 Ibid. 122 Above, para 29.7 et seq.

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29.70  Securing the indirect running of the burden of a positive covenant rentcharge is incapable of serving any useful purpose in making the burden of positive covenants run with the land123 unless a right of re-entry is also expressly granted or reserved exercisable on non-payment of the rentcharge and non-performance of associated covenants entered into by the owner of the land affected. This type of estate rentcharge is therefore entirely ancillary to (albeit vital for the existence of124) a legal right of re-entry and it has accordingly been dealt with under the heading of the legal right of re-entry. 29.70 Estate rentcharges of type 2 are entirely apt for imposing a positive obligation on the owner for the time being of the land to make periodical payments in meeting or contributing towards any of the costs and expenses referred to in section 2(4)(b). Such rentcharges frequently feature in flat development schemes where the maintenance and insurance of common parts and the provision of services is undertaken by a management company for the benefit of the flat owners in return for a variable estate rentcharge. Such rentcharges serve the dual purpose of ensuring that the positive obligation to make payments runs with each individual flat (whilst, of course, a covenant to pay – unless construed as a rentcharge125 – would not) and of providing priority for such payments over any subsequently created interest or charge.126

Estate rentcharges not subject to statutory extinguishment or redemption 29.71 By section 3(3)(b) of the 1977 Act, the provisions for the extinguishment of rentcharges (without compensation) after a maximum period of 60 years contained in section 3 do not apply to estate rentcharges. Nor do the provisions for compulsory redemption (subject to compensation) contained in section 8.127 In addition, a rentcharge of type 1 above but for more than a nominal sum and a rentcharge of type 2 above but providing for payment of more than a sum reasonably required for meeting or contributing to the costs and expenses referred to, being in either case a rentcharge created before the commencement of the Act, is not subject to extinguishment under section 3.128 Thus (inter alia) a rentcharge operating in terrorem which, before the Act, was sometimes created and which sought to secure compliance with positive covenants by imposing a high level of payment if the covenants were not duly performed but which reduced the level to a nominal sum if they were duly performed, would continue and not be subject to extinguishment under section 3.

123 Hayward v Brunswick Building Society (1881) 8 QBD 403, CA; Re Blackburn and District Benefit Building Society, ex p Graham (1889) 42 ChD 343. 124 See s 1(2)(e) of the Law of Property Act 1925 and see also para 29.5 above. 125 See Morland v Cook (1868) LR 6 Eq 252 as explained by Lindley LJ in Austerberry v Oldham Corpn (1885) 29 ChD 750. 126 In this respect (as in others) a rentcharge differs from a mortgage in that future payments take priority over intervening mortgages independently of complying with the rules as to tacking: see para 29.58 above. A subsequent charge arising pursuant to the exercise of statutory powers may, however, take priority over the rentcharge: see Westminster City Council v Haymarket Publishing Ltd [1981] 1 WLR 677, CA. 127 Section 8(4). 128 Section 3(3)(b) (words in brackets). As a practical matter redemption under s 8 will also almost always be excluded by reason of the inability of the applicant to satisfy the provisions of that section.

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Conditions attached to property rights 29.74

(4)  CONDITIONS ATTACHED TO PROPERTY RIGHTS The principle stated 29.72 The effect of the decisions in Barber v Whiteley129 Aspden v Seddon,130 Westhoughton UDC v Wigan Coal and Iron Co,131 Halsall v Brizell,132 Tito v Waddell (No 2),133 and Rhone v Stephens134 appears to be as follows: Where the performance of a positive obligation is made a condition of the enjoyment of some right or interest over or in respect of the land of another, then if the positive obligation is relevant to the exercise of the right, that right cannot be exercised without performance of the positive obligation.135

Examples 29.73 Common examples of conditions attached to the enjoyment of property rights include: (1) the grant of easements of way, drainage and such like subject to paying a fair proportion of the cost of keeping the roads and sewers etc in good repair and cleansed;136 (2) the grant or reservation of mines and minerals and the right to work them, making compensation for all damage done by the exercise of the right;137 (3) a right to enter the property of another for the purpose of laying pipes, cables and conduits, doing as little damage as possible and making good all damage done.138

The operation and limits of the principle 29.74 It is clear that conditions can be attached to the exercise of a right either in express terms or by implication.139 If the condition forms an integral part of the right granted, then no problem arises. But if it does not then it

129 130 131 132 133 134 135

(1865) 34 LJQB 212. (1876)1 Ex D 496. [1919] 1 Ch 159. [1957] Ch 169. [1977] Ch 106, at 301–303. [1994] 2 AC 310. An analogous principle has been applied in cases where the enjoyment by X of some right or interest over the land of Y is subject to a condition that Y is permitted to enjoy some right or interest over X’s land: see Hopgood v Brown [1955] 1 WLR 213 and ER Ives Investment Ltd v High [1967] 2 QB 379. 136 See Halsall v Brizell [1957] Ch 169 as explained by Lord Templeman in Rhone v Stephens [1994] 2 AC 310, rejecting the ‘pure principle’ for which it was cited by Megarry V-C in Tito v Waddell (No 2) [1977] Ch 106, at 301–303. 137 Aspden v Seddon (1875) 10 Ch App 394 (injunction to restrain damage refused) and Aspden v Seddon, Preston v Seddon (1876) 1 Ex D 496 (claim for compensation succeeded); Westhoughton UDC v Wigan Coal and Iron Co Ltd [1919] 1 Ch 159. 138 Extrapolation from Halsall v Brizell, above. 139 [1994] 2 AC 310, per Lord Templeman at 322F–G.

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29.75  Securing the indirect running of the burden of a positive covenant will be a question of construction whether a separate condition in the shape of a covenant or provision will be treated as a condition of the grant. Thus, in Chamber Colliery Co Ltd v Twyerould,140 a deed granting mining rights contained, in a separate clause, a covenant by the grantees that they would make full satisfaction for any damage to any buildings caused by working the mines. The plaintiff and the defendant derived title from the grantors and the grantees respectively and damage was done by the mining operations to the plaintiff’s buildings. The question was whether the obligation imposed by the positive covenant was binding on the defendant as a condition of the right to work the mines. The House of Lords held that it was. In the course of his speech, Lord Watson said: ‘It [the covenant] is an inherent qualification of the coal owner’s licence to work with the effect of letting down the surface, and provides that he shall not do so except upon the condition of compensating the owner for the time being of buildings which are injured by his operations. I do not think it is open to question that what is in form a covenant may nevertheless appear from the whole of the provisions of the instrument to be intended to operate as a condition also.’ 29.75 Similarly, in Halsall v Brizel,141 one part of a deed, executed in 1851 by the owners of roads and drains on an estate of 174 houses, granted142 rights of way and user in respect of the roads and drains. Another part of the deed (in fact an earlier part) then contained a covenant by each of the plot owners to pay a ‘just proportion in respect of the plot … of all costs charges and expenses’ of making, maintaining and cleansing the roads and drains. Upjohn J treated the grant and the covenant as linked so the defendants who owned a house on one of the plots could not ‘if they desire to use their house, as they do, take advantage of the trusts concerning the user of the roads contained in the deed and the other benefits created by it without undertaking the obligations thereunder’. 29.76 On the other hand, in Radstock Co-operative and Industrial Society Ltd v Norton-Radstock UDC,143 predecessors in title of the present owner of part of the bed of the river Somer, granted a lease for 99 years to the predecessor council of the defendant enabling them to build and maintain a sewer across the river. By clause 14 of the lease, the council covenanted not to interfere with the flow of water in the river. By the operation of certain statutory provisions in the Public Health Act 1875, the sewer vested in the defendant council whose title thereto was therefore independent of the lease but the provisions of clause 14 were statutorily preserved as if the right were granted by the lease. On the question whether the covenant contained in clause 14 (which was unenforceable as such 140 [1915] 1 Ch 268n, HL affirming SC sub nom Twyerould v Chamber Colliery Co [1892] WN 27, CA, cited in Tito v Waddell (No 2) [1977] Ch 106, at 305. 141 [1957] Ch 169. 142 The relevant provision was one under which the owners of the roads and drains declared that they held them ‘Upon trust to permit and suffer the same at all times for ever hereafter to be left open and unbuilt upon and to be freely used and enjoyed by the said several and respective persons parties to these presents and by their several and respective heirs and assigns and by the owners and occupiers for the time being of the said several and respective plots of land numbered from 1 to 174 inclusively …’. As a trust, it would seem to have been void both as a non-charitable purpose trust and as infringing the perpetuity rule. It seems odd that Upjohn J held the positive covenant, qua covenant, to be void for perpetuity but made no reference to either of these apparent problems. Presumably the declaration of trust was treated as the grant of the relevant easements. 143 [1967] Ch 1094, CA.

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Conditions attached to property rights 29.79 both at law and in equity) could be treated as a condition of the right granted, both Harman and Russell LJJ expressed the view that the covenant could not be construed as a condition. 29.77 In Tito v Waddell (No 2),144 one of the issues raised related to the enforceability against successors in title of the burden of a positive covenant given by a company to the owners of lands, which contained deposits of phosphates, to replant the lands, the company by the relevant deeds containing that covenant being entitled to remove the phosphates. After analysing the authorities, Sir Robert Megarry V-C held that in two types of case the burden could be enforced against the successors in title. One was where what he called ‘the pure principle of benefit and burden’ applied and he put Halsall v Brizell into that category. The other was where the benefit was conditional on the undertaking of the burden. The Vice-Chancellor held that the successors in title to the company were liable to replant the lands under the pure principle. The first, ‘pure’ principle has now been rejected and in relation to the second, it is now settled that it cannot be treated as a condition of the exercise of the right unless the covenant or obligation is ‘relevant to the exercise of the right’. 29.78 These matters were decided by the House of Lords in Rhone v Stephens,145 the facts of which were as follows: In 1960 the owner of a house divided it into two separate dwellings, a house and a cottage. Part of the roof of the house lay above a bedroom in the cottage. The owner retained the house and sold the cottage by a conveyance in which he covenanted “for himself and his successors in title … to maintain to the reasonable satisfaction of the purchasers and their successors in title such part of the roof of [the house] as lies above the property conveyed in wind and watertight condition.” By 1984 the condition of the roof had deteriorated so that water leaked through into the cottage bedroom. The claimants, who had purchased the cottage in 1981 by a conveyance containing an assignment of the benefit of the covenant, brought an action to enforce the covenant against the defendant, the successor in title to the original owner of the house. The House of Lords (through Lord Templeman) held that there was no principle requiring a party deriving benefit from a conveyance to accept any burden in the same conveyance, and although a condition could be attached to the exercise of a power in express terms or by implication, that condition had to be relevant to the exercise of the right. In the present case, the obligation in the 1960 conveyance to repair the roof was an independent provision which did not impose any reciprocal rights or benefits; and accordingly, although the defendant was in breach of the covenant to repair, the burden of that covenant did not run with the land and the plaintiffs could not enforce it against her. 29.79 Lord Templeman, with whom the other members of the House agreed, said:146 ‘The condition must be relevant to the exercise of the right. In Halsall v Brizell there were reciprocal benefits and burdens enjoyed by the users of the roads

144 [1977] Ch 106. 145 [1994] 2 AC 310. 146 Ibid, at p 322.

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29.80  Securing the indirect running of the burden of a positive covenant and sewers. In the present case clause 2 of the 1960 conveyance imposes reciprocal benefits and burdens of support but clause 3 which imposed an obligation to repair the roof is an independent provision. In Halsall v Brizell the defendant could, at least in theory, choose between enjoying the right and paying his proportion of the cost or alternatively giving up the right and saving his money. In the present case the owners of Walford House could not in theory or in practice be deprived of the benefit of the mutual rights of support if they failed to repair the roof.’ It is plain that the House considered Halsall v Brizell not to be an example of the ‘pure principle of benefit and burden’, which principle was rejected, but one falling into Megarry VC’s second category of conditional benefit, which was adopted on the terms set out. 29.80 In Thamesmead Town Ltd v Allotey,147 a house on a large London estate was transferred to the defendant’s predecessors in title in 1988. The transfer contained positive covenants for them and their successors in title to contribute a fair proportion of the claimant’s costs of maintaining and repairing the roads, footpaths, sewers, cables, landscaped and communal areas on the estate. The 1988 transfer granted with the property the right to use the roads and paths owned by the claimant on the estate and the right to the free passage of services through sewers and cables under the estate, but did not grant the transferees any rights over the landscaped or communal areas or require the claimant to maintain them. In 1992 the house was transferred to the defendant. The claimant claimed service charges of £95.91 in respect of janitorial services, maintenance of communal areas, and maintenance of paving, sewers, lighting, roadworks and fencing. The Court of Appeal referred to the statement of Lord Templeman in Rhone v Stephens that taking a benefit under a conveyance is not sufficient to make every burden of the conveyance enforceable, that simply attaching a right to a condition for payment would not render that condition enforceable, and that there must be a correlation between the burden and the benefit that the successor has chosen to take. So far as the part of the claim that related to everything other than the communal areas was concerned, this was satisfied on the facts and the defendant was liable to pay the charges. 29.81 However, the transfer conferred no right on the defendant to use the communal areas or obligation on the claimant to maintain them, and Peter Gibson LJ, for the court, said: ‘There is no authority to suggest that any benefit obtained by a successor in title, once the property has been transferred to him, to enable the enforcement of a burden under the conveyance is sufficient, even if that benefit was not conferred as of right by the conveyance. In my judgment, it cannot be sufficient that the taking of an incidental benefit should enable the enforcement of a burden against a person who has not himself covenanted to undertake the particular burden. Lord Templeman’s reference to rights and power suggests that the successor in title must be able as of right to obtain the relevant benefit. I have already pointed out that not only is there no right conferred on the defendant by the 1988 transfer to use the communal areas but also that the plaintiff has no obligation to maintain those areas.’

147 (2000) 79 P&CR 557.

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Conditions attached to property rights 29.84 Accordingly, there was no obligation to pay the charges relating to the communal areas. 29.82 In Davies v Jones148 the Court of Appeal, indicated that Rhone v Stephens and Thamesmead Town Ltd v Allotey lay down the following binding principles: ‘(1) The benefit and burden must be conferred in or by the same transaction. In the case of benefits and burdens in relation to land it is almost inevitable that the transaction in question will be effected by one or more deeds or other documents. (2) The receipt or enjoyment of the benefit must be relevant to the imposition of the burden in the sense that the former must be conditional on or reciprocal to the latter. Whether that requirement is satisfied is a question of construction of the deeds or other documents where the question arises in the case of land or the terms of the transaction, if not reduced to writing, in other cases. In each case it will depend on the express terms of the transaction and any implications to be derived from them. (3) The person on whom the burden is alleged to have been imposed must have or have had the opportunity of rejecting or disclaiming the benefit, not merely the right to receive the benefit.’ It was also made clear that the transaction must be one having legal effect. In the instant case found to be no transaction making the benefit conditional on the performance of the relevant obligation. 29.83 In contrast, in Wilkinson v Kerdene,149 bungalows on a holiday village site were sold with a covenant by the vendor to repair and maintain areas over which the purchasers were given rights, and the purchasers covenanted to pay a contribution to the costs of works to those areas. The claimants’ successors in title sought payment of the contributions and an injunction restraining the defendants from using the areas until arrears were paid. Most of the defendants were successors in title to the original covenantees so the positive covenant to pay could only be enforced if the case was within the equitable benefit and burden principle set out in Halsall v Brizell. It was held that although the rights were not made expressly conditional upon the payments being made, the payments were intended to ensure that the rights remained capable of being exercised. Accordingly, the positive covenant to pay was enforceable.

The running of the burden of a condition 29.84 In many cases, the condition will require something to be done from time to time during the period of exercise of the right. In such cases, it is clearly the person who is for the time being exercising the right who will be subject to the burden of the obligation.150

148 [2010] 1 P&CR 22, at para 27. 149 [2013] EWCA Civ 44. 150 If the obligation which is imposed is not, on the true construction of the document, a condition of the exercise of the right, then (the theory of a ‘pure’ principle of benefit and burden having been exploded by the House of Lords in Rhone v Stephens, above) on an assignment of the right, the burden would not pass to the assignee.

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29.85  Securing the indirect running of the burden of a positive covenant In other cases, the obligation may be to do something on completion of the exercise of the right.151 In such cases, if the right is exercisable over a long period and during that period there are changes in the persons exercising it, then the question arises as to whether the burden is apportionable between those persons or whether the last of them to enjoy the right is exclusively liable. 29.85 The only direct authority bearing on this point is Tito v Waddell (No 2)152 in which, under deeds executed between 1913 and 1920, a company was authorised (subject to obtaining the necessary leases from landowners) to mine coral and phosphates on an area of some 250 acres of land in Ocean Island, a south sea island forming part of the Gilbert and Ellice Islands in the Pacific Ocean. These islands were a British protectorate to which English law applied subject to local statute law. The deeds imposed an obligation on the company, on completion of the mining operations (for which no time limit was laid down) to replant the worked-out area with coconut trees and other food-bearing trees. In 1920 the company assigned its undertaking, including its rights under the deeds, to the British Phosphate Commissioners (an unincorporated body consisting of three individuals) who continued the mining operations. During the period of continuance, there were several changes in the membership of the British Phosphate Commissioners and the three being sued were the members as at the time of completion of the mining operations. 29.86 On the question whether they were exclusively liable for the performance of the obligation subject to which the mining rights had been granted, Megarry V-C held that they were. On this point he said:153 ‘Where there is a terminal liability, such as the obligation of replanting in this case, it seems right that the burden should ultimately be borne by the latest in the chain of persons liable at the time when the burden accrues. Certainly this should be so in the case of an undertaking such as that of the British Phosphate Commissioners, where normal commercial methods contemplate some sinking fund or other provision for meeting future liabilities of this kind.’ This case proceeded on the (now flawed) basis of the existence of the ‘pure principle’ of benefit and burden but on this point the underlying approach and reasoning appear to be equally applicable to cases of conditional rights. The burden of a terminal condition is accordingly prima facie enforceable against the last person to exercise the right. 29.87 On the question whether the burden imposed by a condition is a legal or equitable burden,154 it is considered that its nature will depend upon whether the right to which it is incident is legal or equitable. If the right is a

151 As in Tito v Waddell (No 2) [1977] Ch 106. In this case, Megarry V-C referred to burdens of this type as ‘unitary burdens’. 152 [1977] Ch 106. 153 Ibid, at p 308C–E. 154 The answer to which may, in any given case, be material in the context of remedies, formalities and the doctrine of notice.

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Lease of easements containing covenants 29.89 legal right, the burden ought to be legal and, correspondingly, if the right is an equitable right.155

The running of the benefit of a condition 29.88 Since the condition and the right are (as discussed above) inseparable, the benefit of the condition must run with the land over which the right is exercisable. Accordingly, the right to enforce the obligation will accrue to the person who is the owner of the land at the time when the obligation falls to be performed or (if it is not enforced) his successor who enforces it.156

(5)  LEASE OF EASEMENTS CONTAINING COVENANTS Elements of the scheme 29.89 This scheme, incorporating a lease of easements, presupposes the sale of freehold premises where the access and services to it pass over or through other land owned by the vendor and where the vendor wishes to impose positive covenants whose burden will (indirectly) run with the land. In such a case, the elements of the transaction would be two-fold: (1) a transfer of the freehold premises to the purchaser containing any required restrictive covenants but not containing any positive covenants or any grant of any right of way or right to use services crossing or passing through other land and expressly excluding any implied right of access or use of service media in or over any land retained by the vendor; (2) a lease by the vendor to the purchaser of all the required easements for the benefit of the freehold premises conferring rights in respect of access and services passing over or through the vendor’s adjoining land for a term of 999 years at a yearly rent of £1.00 and containing all the required positive covenants relating to the freehold premises together with a right for the vendor to determine the lease in the event of non-payment of the rent or (after service of a notice complying with the provisions of section 146(1) of the Law of Property Act 1925) breach of any of the covenants.

155 In Tito v Waddell, above, Megarry V-C considered this question in the context of an obligation treated as imposed by the ‘pure’ principle of benefit and burden and concluded that it depended on the legal or equitable nature of the burden itself. It is considered, however, that a condition as such (whether originating in a covenant or an integral limitation) has no separate identity of character from the right granted. 156 Cf Tito v Waddell (No 2), above, at 309H–310A, where Megarry V-C, in dealing with a burden which he treated as enforceable under the ‘pure’ principle, said: ‘There is no reason why the benefit of the replanting obligations should not run with the land both at law and in equity. The obligations could hardly more clearly touch and concern the land, and the benefit of them must have been intended to run with the land and be enforceable by the owner for the time being. The present owners of the land are therefore the persons entitled to enforce the obligations.’ It is submitted that in the case of a conditional right, provided the obligation is ‘relevant’ to the subject-matter of the right, it would run with the land whether or not it touched and concerned the land in the technical sense.

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29.90  Securing the indirect running of the burden of a positive covenant

Operation of the scheme 29.90

The effectiveness of the scheme centres on two factors:

(1) the assumption that the freehold premises are virtually worthless in the absence of any legal or equitable right of access across, or right to use service pipes, drains and cables running across or through, the vendor’s adjoining land. As a matter of law, this assumption can initially be made by the absence of any express grant of easements and the express exclusion of any implied grant of easements. As to the latter, the effectiveness of such an exclusion was upheld by the Court of Appeal in Nickerson v Barraclough,157 which held that the doctrine of a way of necessity was not founded on public policy but on implication and that, where the intention of the parties was that there should be no such implication, effect would be given to that intention. The presumption is that any rights the grantor required over the land transferred would have been expressly reserved in the grant, so that there is therefore no normal expectation for access, and the burden lies on anyone seeking to overcome the presumption do so by clear evidence: see Adealon International Pty Ltd v Merton LBC.158 (2) the enforceability of the right to forfeit the lease of easements on breach of any of the covenants. As between the parties to the lease there is privity of contract and the provisions of the lease will take effect according to their terms.159 So far as concerns successors, provided the covenants have reference to the subject-matter of the lease, ie the easements, there will be no difficulty concerning this in the future.160 In fact, the covenants will inevitably relate to works to be carried out on the freehold premises, but since it is these premises which constitute the dominant tenement and the carrying out of such works may be said to benefit to the servient tenement, then there is plainly a good argument that there is sufficient nexus for the works to have reference to the easements. 29.91 On the assumption that both the above factors are made out, then the risk of the freehold premises being left without access or services in the event of forfeiture of the lease of easements, would undoubtedly be a powerful incentive to the freehold owner to ensure that the covenants in the lease were performed.

(6) FRESH COVENANTS ON EVERY CHANGE OF OWNERSHIP 29.92 Where a positive covenant is entered into which is intended to be performed by the owner for the time being of the covenantor’s land for the benefit of the owner for the time being of the covenantee’s land, then this intention can

157 [1981] Ch 426, reversing the decision of Megarry V-C. This was approved by the Privy Council in Privy Council in Manjang v Drammeh (1991) 61 P&CR 194. 158 [2007] 1 WLR 1898. 159 Subject, of course, to the ordinary rules relating to relief from forfeiture: see above. 160 See s 141 of the Law of Property Act 1925. See also Caerns Motor Services Ltd v Texaco Ltd [1994] 1 WLR 1249.

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Fresh covenants on every change of ownership 29.94 be effectively realised if on every change of ownership of the covenantor’s land his successor enters into a direct covenant with the owner for the time being of the covenantee’s land. Direct enforceability under privity of contract will thereby be available. But this result can only be assured if a reliable mechanism is available for ensuring that the necessary new deeds of covenant are entered into by subsequent owners of the covenantor’s land.

(1)  Unregistered land 29.93 In the case of unregistered land, the deed containing the covenant would also contain a further covenant that on every ‘disposition’ of the covenantor’s land or any part thereof to another person or persons (the transferee), the covenantor would procure the transferee on completion of the disposition to deliver to the person or persons who should then be the owner or owners of the whole or the severed parts of the covenantee’s land (the extant owner) a deed expressed to be made between the transferee and the extant owner and duly executed by the transferee, containing covenants in the terms of the covenant and the further covenant. ‘Disposition’ would be defined as including a transfer of the freehold estate and the grant of any lease for more than three years. It would not include a mortgage since it could not be expected that a mortgagee would enter into the main covenant. But a mortgagee exercising his power of sale might reasonably be expected to comply with the requirements of the further covenant in obtaining a deed of covenant from the purchaser. Accordingly, the deed would provide that in the case of a mortgage, the provisions applicable to a disposition would apply save that the deed to be executed by the mortgagee would contain only the further covenant. If under the deed of covenant to be executed by the original covenantee and subsequent owners the liability of the covenantor under the main covenant is expressed to be limited to the period of his estate ownership then, of course, no indemnity for non-performance will, on a change of ownership, be required. But if the liability is not so limited then on every change of ownership a covenant of indemnity will also be required. 29.94 The effectiveness of this procedure would, of course, be dependent upon the covenantee and each successive covenantee who entered into a fresh deed complying with the terms of the further covenant when making a disposition. Failure to do so would be an actionable breach of covenant, but what the covenantee wishes to secure is specific compliance. This might be encouraged by providing a release from future personal liability after a disposition of the freehold to a transferee who executed a fresh deed of covenant.161 But if the original covenantor, A, disposes of the land to a person, B, who does not in fact enter into a fresh deed of covenant with the covenantee, C, then if the object of A and B was to prevent A from performing the covenant, that will prima facie amount to the tort of interference with contract on the part of B (as well

161 Such incentive would be confined to a transfer only and not to the granting of a lease. It could also be encouraged by imposing a penalty for non-compliance such as the extant owner thereupon becoming entitled to require security for the performance of the main covenant. The drafting of such a provision would, however, need to have regard to the rules relating to certainty, perpetuity and penalties.

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29.95  Securing the indirect running of the burden of a positive covenant as, possibly, the tort of conspiracy).162 In such a case, since damages against B would prima facie not sufficiently compensate C, a mandatory injunction could be sought to compel B to retransfer the land back to A thereby undoing the tortious act.163

(2)  Registered land 29.95 In this case invoking the use of the registered land restriction in conjunction with the procedure referred to above in relation to unregistered land should overcome the risk of a disposition being made of a kind which is required to be registered without the transferee or lessee entering into a direct deed of covenant with the extant owner. 29.96 In addition to the main covenant and the further covenant the deed of covenant would contain an application to the Chief Land Registrar by the covenantor (as registered proprietor of the land to be affected) for the entry of a restriction in the register of the covenantor’s title that no transaction consisting of a transfer or the granting of a lease or mortgage shall be effected unless the solicitors for the extant owner certify that the requirements of the further covenant contained in the deed of covenant have been satisfied.164 The expression ‘extant owner’ would require to be expanded so as clearly to establish its meaning (as above). If the title to the covenantee’s land is registered, then the extant owner would conveniently be described as the registered proprietor or proprietors for the time being of the whole or the severed parts of the land comprised in the registered title in question. Where future fragmentation of the covenantee’s land is a real possibility, the deed of covenant should contain provision for securing that in respect of the certificate required to be given by the solicitors, the owners of severed parts act through the same firm of solicitors. It will be for the purchaser’s, lessee’s or mortgagee’s solicitors (as the case may be) to ensure the required certificate is available when application for registration of the transaction is made. 29.97 If (as appears to be the common practice) the restriction is that no such disposition shall be registered (as opposed to effected165) unless the certificate is given, then, since leases for seven years or less cannot be registered,166 the entry of such a restriction on the register would not operate on the grant of such leases. Accordingly, in relation to these leases, the unregistered land position (as above) would obtain. This position would also obtain in the case of a mortgage or charge which did not become a registered charge.

162 See Law Debenture Trust Corpn plc v Ural Caspian Oil Corpn Ltd [1995] 1 All ER 157, CA, and the cases cited therein. 163 See Esso Petroleum Co Ltd v Kingswood Motors (Addlestone) Ltd [1974] QB 142. 164 Such a restriction would be applied for pursuant to s 40 of the Land Registration Act 2002. Provided the terms of the restriction are reasonable in content and sufficiently certain, there would seem to be no reason for the registrar not approving them: see s 40(2). An application should be made under s 43(1)(a) and (b) or, failing that, s 93, complying with the requirements of rule 92 of the Land Registration Rules 2003. 165 The word used by s 58(1) and (2) is ‘effected’. 166 Section 3(3) of the Land Registration Act 2002.

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Long lease followed by enlargement 29.101

(7)  LONG LEASE FOLLOWED BY ENLARGEMENT The rule in Spencer’s case 29.98 By virtue of the rules laid down in Spencer’s Case,167 as later judicially refined and modified by section 79(1)168 of the Law of Property Act 1925, the burden of any covenant, restrictive or positive, contained in a lease granting a term of years absolute, which ‘touches and concerns’ the land demised, will run with the leasehold estate in the land. Further, by virtue of statutory provisions originating in the Statute of Grantees of Reversions 1540169 and now embodied in section 141(1) of the Law of Property Act 1925, the benefit of such covenants will run with the reversionary estate in the land immediately expectant on the term granted by the lease. However, by section 141(2) of the Law of Property Act 1925, the person entitled to enforce such covenants is ‘the person from time to time entitled, subject to the term, to the income of … the land leased’.170 29.99 As a result, long leases, rather than a freehold transfer, are often used to ensure that covenants will remain enforceable.

Section 153 of the Law of Property Act 1925 29.100 Under section 153 of the Law of Property Act 1925, where the lease is for 300 years or more, the long lease may in certain circumstances be converted (‘enlarged’) into a freehold which will be subject to the same covenants and obligations which burdened the lease. This may mean that though the land is then held in freehold positive covenants remain enforceable. However, it is important to note that this has never actually been tested in any decided case. 29.101 By this section,171 a lessee entitled to a term originally granted for 300 years or more of which at least 200 years remain unexpired, being a term which satisfies the conditions laid down by the section, may by deed declare that the term shall be enlarged into a fee simple and thereupon the person so declaring acquires a fee simple instead of the term.172 The conditions which the term must satisfy to fall within the section are: (i) freedom from any trust or right of redemption in favour of the reversioner; (ii) no currently payable rent of any money value;173

167 (1583) 5 Co Rep 16a. 168 See, especially, the provisions of the second paragraph of this subsection. 169 Passed following the dissolution of the monasteries and the consequential change of landlords decreed by Henry VIII. See Caerns Motor Services Ltd v Texaco Ltd [1995] 1 All ER 247. 170 This may therefore vary, eg between a mortgagor in possession and a mortgagee in possession. 171 Re-enacting, with amendments and additions, s 65 of the Conveyancing Act 1881. 172 Section 153(6) and (7). 173 A rent of ‘one silver penny if lawfully demanded’ is a rent having no money value within the meaning of the section: Re Chapman and Hobbs (1885) 29 ChD 1007. But a rent of three shillings (15p) is a rent having money value: Re Smith and Stott (1883) 29 ChD 1009n. However, by s 153(4), a rent not exceeding the yearly sum of one pound which has not been collected or paid for a continuous period of 20 years or more is, for the purposes of the section, deemed to have ceased to be payable.

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29.102  Securing the indirect running of the burden of a positive covenant (iii) no right of re-entry for condition broken; and (iv) if a sub-demise, the superior term must satisfy the conditions.

Effect of section 153(8) on the former lease covenants The burden of the covenants 29.102 Section 153(8) provides as follows: ‘(8) The estate in fee simple so acquired by enlargement shall be subject to all the same trusts, powers, executory limitations over, rights and equities, and to all the same covenants and provisions relating to user and enjoyment, and to all the same obligations of every kind, as the term would have been subject to if it had not been so enlarged.’ The words of this provision seem wide enough to extend to any obligations whether restrictive or positive. However, the words ‘as the term would have been subject to’ restricts the covenants and obligations which are carried over to the fee simple to those which touched and concerned the demised land. These will include such covenants as to build,174 repair175 and insure.176 The result is that by the grant of a long lease and the subsequent execution of a deed of enlargement, the freehold is statutorily ‘subject to’ all the covenants in the lease which touch and concern the land.

The benefit of the covenants 29.103 Whilst making the fee simple ‘subject to’ those covenants, section 153 says nothing about the manner of identifying the persons who are to be entitled to enforce the covenants. It has been suggested177 that notwithstanding  the enlargement, a reversion of some sort may still remain vested in the former lessor and that the covenants will accordingly run with that reversion. In this connection, it may be significant that by section 153(7) the effect of the enlargement is that the former lessee ‘shall acquire and have in the land a fee simple instead of the term’ – not the fee simple; and since the newlyacquired fee simple was not the result of a dispositive act, the relationship of landlord and tenant by subinfeudation might therefore have arisen as not being caught by the provisions for the general abolition of subinfeudation contained in the statute Quia Emptores 1290. 29.104 In the case of registered land, the procedure for dealing with enlargements  formerly contained in rule 131 of the Land Registration Rules 1925 presupposed that the same registered fee simple estate of the former

174 Easterby v Sampson (1830) 6 Bing 644. 175 Martyn v Clue (1852) 18 QB 661. 176 Vernon v Smith (1821) 5 B & Ald 1. See, further, as to the test of touching and concerning, above, p 502 and Caerns Motor Services Ltd v Texaco Ltd [1995] 1 All ER 247. 177 Tentatively by Challis, Real Property (3rd edn, 1911) pp 334–335 and firmly by TPD Taylor, ‘The enlargement of Leasehold to Freehold’, The Conveyancer and Property Lawyer, vol 22 (NS) 101, at 108–112.

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Long lease followed by enlargement 29.106 freehold owner (landlord) would be vested in the former lessee, and the practice originally was to close that title. However, current practice is to leave the existing freeholder’s title open whilst issuing a new freehold title in the same land to the former lessee (so that both the landlord’s title and the new freehold title are on the register), and to enter a note in the property register stating that if the effect of enlargement is to determine the former landlord’s estate, then that estate is determined. This reflects the uncertainty as to whether the former freehold simply goes to the former lessee, or whether it continues alongside a new freehold estate vested in the former tenant. Whether or not there is any outstanding reversion or not, it is suggested that the necessary inference from the continuance of the burden of the covenants provided for by subsection (8) is that the benefit must continue in the hands of the former lessor and that such benefit may be assigned. As pointed out above, however, these matters have never actually come before the courts, and the effect in terms of enforceability has been doubted.178

The practical application of enlargement 29.105 The attractiveness of the procedure of lease followed by enlargement is perhaps most obvious in the straightforward case of the division of a building into an upper and lower maisonette. In such a case, the grant of separate long leases and cross-assignments of the reversions in respect of each maisonette, resulting in the lessee of the lower maisonette becoming the reversioner of the lessee of the upper maisonette and vice versa, would ensure direct enforceability of both positive and restrictive covenants as between the owners of the leases of the lower and upper maisonettes, and resort to the device of lease plus enlargement could satisfy the preference of many buyers for freehold ownership. What is necessary, in addition to the grant of long leases plus crossassignments of reversions,179 referred to above, is to ensure that the leases satisfied the requirements for enlargement and that each lessee executes a deed of enlargement. On lodging the long lease and deed of enlargement at the Land Registry, each maisonette owner would be registered as proprietor of a freehold and (in view of the effect of section 153(8) of the Law of Property Act 1925) the registrar would be obliged to note all the lease covenants on the freehold title. There would, however, (subject to the registrar’s discretion) be no corresponding entry of the benefit of those covenants on the title of the other maisonette owner and, on a subsequent disposition of either maisonette, it would be necessary180 to make an express assignment of the benefit of the covenants in accordance with section 136(1) of the Law of Property Act 1925. 29.106 Notwithstanding the lack of authority as to the actual legal effect in relation to covenants, the Land Registry indicated in 2013 that the number of applications to enlarge newly created leases was increasing.181 Though still

178 See for example, the article by Christopher Jessel at [2017] 2 Conv 132. 179 The cross-assignments of reversions would still be necessary prior to the deeds of enlargement being executed in order to ensure that the respective maisonette owners became entitled to the benefit of the covenants and not the original lessor. 180 In order to effect a legal, as opposed to equitable, assignment. 181 Land Registry, Landnet 35 (April 2013).

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29.107  Securing the indirect running of the burden of a positive covenant only amounting to a few applications a year, the Law Commission in its consultation paper on ‘Updating the Land Registration Act 2002’182 considered the explanation may be the attractiveness of using it as a device to make the burden of positive covenants run, whilst allowing freehold ownership, as just referred to.183

Land registration 29.107 The nature of the entries that will be made by the Land Registry on enlargement of the lease have been referred to above.184 If the leasehold title is unregistered an application should be made for registration using Land Registry Form TR1, accompanied by the necessary documents, including a plan, the lease (or a certified copy or examined extract of it), the deeds relevant to the leasehold title which are in the applicant’s control and, where necessary, a statutory declaration (or statement containing a statement of truth) as to the non-payment of rent over a period of 20 years (to show that a rent not exceeding £1 is deemed to have ceased to be payable185). If the leasehold title is registered, an application to change the register should be made using Land Registry Form AP1, accompanied by the deed of enlargement, the lease (or a certified copy or examined extract of it), and, if necessary, a statutory declaration (or statement) in relation to the non-payment of rent to the effect just referred to.

(8)  CHAIN OF INDEMNITY COVENANTS 29.108 In reality, the creation of a chain of indemnity covenants is not preordained at the behest of the original covenantee but comes into existence at the instance, and for the protection, of the original covenantor – and at his sole discretion. It is an indirect means of enforcing a covenant at the instance of the original covenantee only in the sense that the original covenantee has exacted from the covenantor a covenant which imposes liability for the acts or omissions of his successors as well as for his own.186 The existence of a chain of ‘pure’ indemnity covenants187 will not in any way increase the power of the original covenantee to enforce the covenant. 29.109 It is a common term in contracts for the sale of land, where the vendor will remain personally liable under the terms of a covenant for non-performance of an obligation after completion (eg a covenant to erect and maintain

182 Law Com no 227. 183 In its consultation paper, the Law Commission at para 3.10 considered the Land Registry’s practice of including both the landlord’s title and the new freehold title on the register, with a note as to the possible effect of s 153 of the Law of Property Act 1925 being to determine the landlord’s title (as referred to in para 29.104 above) to be a sensible one. 184 At para 29.104. 185 See footnote 173 above. 186 As to which, see above, para 11.54 et seq. 187 le, covenants which do not undertake the actual performance of the original covenant except for the purposes of indemnity.

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Chain of indemnity covenants 29.110 boundary fences), to require the purchaser to covenant in the conveyance or transfer to perform the obligation and to indemnify the vendor in respect of any non-performance.188 Such a covenant appears to go beyond indemnity in that it undertakes actual performance not limited to indemnity; but for convenience it is referred to here as a covenant of indemnity.189 In the case of unregistered land, the existence of all such covenants will appear on the face of the title deeds.190 In the case of registered land, although (being positive) the burden of such a covenant does not run with the land, it is the practice of the Land Registry to note the existence of the last indemnity covenant on the proprietorship register, express power to do so being conferred by rule 65 of the Land Registration Rules 2003. The existence of earlier indemnity covenants will therefore be revealed only from earlier copy entries. If the existence of the covenant is apparent from the register in some other way, for example by being included amongst restrictive covenants in the charges register where it is set out, the Registry will not generally make a separate note on the proprietorship register. 29.110 If the existence of an unbroken chain of indemnity covenants can be established as between the original covenantor and the present owner of the land, then in the event of the original covenantor being sued (in damages) for breach, the liability will, at least in theory, be able to be passed on, through the liability of the intermediate indemnifiers, to the present owner indemnifier whose nonperformance will have occasioned the action for damages. However, even assuming the existence and discoverability of an unbroken chain of indemnity covenants, the ability of the covenantee (or his successor) to sue the original covenantor, and of the latter to pass the liability down the chain,191 will depend upon whether the relevant parties or their estates are traceable and solvent. Further, since the original covenantor (having ceased to own the land) does not have it in his power specifically to perform the covenant, the only remedy available against him is damages.192

188 In the absence of such a provision, the vendor cannot insist on the purchaser giving an indemnity or entering into similar covenants: Lukey v Higgs (1855) 3 Eq Rep 510. But where a contract discloses that the vendor has entered into an indemnity covenant, a purchaser cannot insist on specific performance without giving his vendor a similar indemnity covenant even though the contract did not stipulate for one: Moxhay v Inderwick (1847) 1 De G & Sm 708. 189 But as to whether it does in fact add anything to an ordinary covenant of indemnity, see Reckitt v Cody [1920] 2 Ch 452 and as to the scope of covenants of indemnity, see TRW Steering Systems Ltd v North Cape Properties Ltd (1993) 69 P&CR 265, CA. 190 Although these may be confined to the period commencing with a good root of title. 191 Procedurally this will be done under the Civil Procedure Rules by making a Part 20 claim joining the idemnifying party in the proceedings. 192 As to the measure of damages, see Radford v De Froberville, below, paras 30.35–30.36. If in fact (as provided for by condition 4.5.4(a) of the Standard Conditions of Sale (3rd edn) each of the indemnifiers also undertook to perform the covenant (not merely by way of indemnity) then the original covenantor might be said to have it in his power to secure actual performance by the present owner and that he ought to exercise that power so as to have no defence to an action for specific performance: cf Elliott and H Elliott (Builders) Ltd v Pierson [1948] Ch 452; Jones v Lipman [1962] 1 WLR 832. The argument would have particular force if the present owner was the immediate purchaser of the original covenantor: see London and South Western Rly Co v Humphrey (1858) 32 LTOS 70.

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29.111  Securing the indirect running of the burden of a positive covenant In addition to its inherent limitations, in so far as the question whether a chain of indemnity covenants comes into existence at all is outside the control of the original covenantee, it is a system which is for him especially uncertain and unsatisfactory.

(9) THE EXCEPTIONAL CASE OF FENCING COVENANTS AS EASEMENTS Covenants exhibiting the characteristics of easements 29.111 If the substance of an obligation undertaken by covenant is that of an easement, there is authority for the proposition that it can be construed and enforced as such. Thus, in Holms v Seller,193 a covenant that an adjoining owner should have the use of a way across the covenantor’s land was held to amount to an easement of way.194 An easement is either a right to do something or a right to prevent something. A right to have something done is not an easement, nor is it an incident of an easement. That the burden of a positive covenant does not generally run with the land would appear in principle to be as applicable to an obligation to fence as to any other covenant.

The ‘easement’ of fencing 29.112 However, requirements to fence have by way of exception, both to the general definition of an easement, and to the unenforceability of positive covenants, been treated as “easements” and by this anomalous means, the burden has been held to pass with the land. 29.113 In a number of early cases including Pomfret v Ricroft,195 Star v Rookesby,196 Boyle v Tamlyn197 and Lawrence v Jenkins,198 it was held that where, over a lengthy period, it is found that an owner of land has consistently maintained a stock proof boundary fence in circumstances which point to the repairs having been carried out as a matter of obligation199 and not voluntarily, then a right in the nature of an easement to require such maintenance will arise

193 194 195 196 197 198 199

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(1691) 3 Lev 305. It is, however, a question of construction: cf IDC Group Ltd v Clark (1992) 65 P&CR 179, CA. (1669)1 Wms Saund 321. (1711) 1 Salk 335. (1827) 6 B & C 329. (1873) LR 8 QB 274. As where the fence had been repaired by the owner for the time being of the ‘servient’ land at the request of the occupier for the time being of the ‘dominant’ land: Lawrence v Jenkins (1873) LR 8 QB 274. Mere long-term maintenance by an owner of his fence is not, by itself, evidence of any obligation to repair: Hilton v Ankesson (1872) 27 LT 519; Jones v Price [1965] 2 QB 618.

The exceptional case of fencing covenants as easements 29.115 by prescription. The cases show that the benefit and burden of the right will run with the ‘dominant’ and the ‘servient’ land respectively.200 The cases, and the nature of the right of fence, were considered by the Court of Appeal in Jones v Price,201 where the Court of Appeal held that the right to require the owner of adjoining land to keep a boundary fence in repair was a right which it was long established could arise by prescription and ran with the land.202 Willmer LJ said of the right:203 ‘It is not a true easement, for properly speaking an easement requires no more than sufference on the part of the occupier of the servient tenement, whereas an obligation to maintain a hedge involves the performance of positive acts.’ 29.114 Diplock LJ,204 whilst questioning ‘whether such an obligation can today be newly created so as to run with the land, except by Act of Parliament’, added: ‘Such an obligation, described by Gale as a “spurious easement”, is anomalous’. In Crow v Wood205 the existence of the right was reaffirmed and its nature further considered. Until this case, there was doubt206 whether the anomalous ‘easement’ of fencing could be created by express or implied grant as well as by prescription. The Court of Appeal held that if the obligation to fence to keep out cattle existed as a fact (on whatever legal basis) as between the tenants from the same landlord of two adjoining farms, then on the sale of one of the farms, the benefit of the previously existing obligation to fence (not then capable of being an easement by reason of the unity of ownership of the freehold) was converted by section 62(1) of the Law of Property Act 1925 into a legal right in the nature of an easement. 29.115 In the course of his judgment Lord Denning MR said:207 ‘The question is … whether a right to have a fence or wall kept in repair is a right which is capable of being granted by law. I think that it is because it is in the nature of an easement. It is not an easement strictly so called, because it involves the servient owner in the expenditure of money. It was described by Gale as a “spurious easement”. But it has been treated in practice by the courts as being an easement.’ Edmund-Davies LJ said:208 ‘That a duty to fence against trespassers can be created by express or implied grant seems clear. Whether, when such a duty exists, it is to be regarded as

200 In Jones v Price, above, at 639C–D Diplock LJ observed: ‘On the other hand, an obligation to maintain a cattle-proof boundary fence on one’s own land to keep out the cattle of one’s neighbour is capable of running with the land as servient tenement in favour of the neighbouring land as dominant tenement’. A duty to fence land bordering common land may also arise by custom: Egerton v Harding [1974] 3 All ER 689. 201 [1965] 2 QB 618. The Court of Appeal, in reversing the decision of the county court judge, held that the evidence did not justify a finding of any prescriptive or other obligation to fence. 202 The hedge in the case being treated by the court the same as a fence. 203 At p 631C–D. 204 At p 639E. 205 [1971] 1 QB 77. 206 In particular, from comments made in Jones v Price (above). 207 [1971] 1 QB 77, at p 84F–G. 208 Ibid, at p 86G–H.

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29.116  Securing the indirect running of the burden of a positive covenant an easement (“spurious” or otherwise) or a quasi-easement has been much canvassed before us, but I am not satisfied that a final decision as to the exact legal nature of such a duty is presently called for.’

Scope of the easement of fencing 29.116 It is to be noted that in every case in which the easement of fence has been recognised, the obligation which was in question was to maintain a stockproof fence for the purpose of keeping out the ‘dominant’ owner’s cattle or horses.209 There has so far been no case in which an obligation to fence unrelated to that purpose has been recognised. 29.117 However, there would seem no obvious reason why the rule should be restricted to fencing to keep cattle contained, and the importance in terms of cattle or horses (which would presumably have to be ascertained at the time the covenant was entered into) is not said in the cases to be the reason for a special rule. There could be equally important reasons in relation to industrial, domestic, recreational or other land. However, the cases having all involved farmland, it is perhaps possible that were the matter to arise in another context, the higher courts could seek to restrict the ambit of the principle to such fencing on the basis of the unwillingness of the law to extend anomalies beyond what has already been established. It may be, on the other hand, more likely perhaps that they may consider that in the modern context there is no reason why positive covenants should not be enforced against successors in title wherever this is able, on the basis of a wide reading of the principle established in earlier cases, to be permitted.

The words of grant of an easement of fencing 29.118 One of the most commonly found positive covenants is, of course, the covenant to erect and maintain boundary fences. If as between adjoining owners, an obligation to fence can exist as an easement, then there is clearly everything to be said for imposing the obligation by way of reservation or grant of an ‘easement’. In this connection, Diplock LJ has observed,210 ‘in relation to such a grant. I find it difficult to envisage its form’. However, the following words of grant are suggested by way of example: ‘Reserving unto the Vendor for the benefit of the Vendor’s adjoining land shown edged green on the plan annexed hereto and the owners and occupiers for the time being of the whole or any part thereof the right to have maintained in good structural repair and surface condition the fence(s) hereinafter covenanted to be [erected and] maintained by the Purchaser to the intent that the right hereby reserved shall take effect as an easement or right in the nature of an easement and enure for the benefit of the Vendor’s said land and be binding upon the land hereby transferred.’

209 The claims variously involved injury to or trespass by cows, sheep and horses. 210 In Jones v Price, above, at 640A.

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The exceptional case of fencing covenants as easements 29.120 29.119 The transfer would then set out the covenant by the purchaser with the vendor to erect and/or (as the case may require) maintain the fence or fences in question, specifying their type and height as required and identifying their location by reference to a plan. Simple references to the purchaser and the vendor would, in the covenant, be supplemented as to their successors and the persons claiming through or under them by virtue of the provisions of sections 78 and 79 of the Law of Property Act 1925. 29.120 In view of the untried effectiveness of the ‘easement’, such a covenant is best used only as a back-up unless risk is to be taken. One particular problem which might beset the easement is as to the extent of the servient tenement. In the above words of grant the easement is expressed to be binding on the land transferred to the purchaser, but it is difficult to fit such covenants into the law of easements because they do not fit the usual mode.

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30 Remedies for breach of positive covenants

INTRODUCTION 30.1 The four remedies potentially available under the general law for breach of a positive covenant relating to land are: ●● ●● ●● ●●

specific performance; injunction; appointment of a receiver; and damages.

30.2 Additional remedies may also be available where a mechanism for indirect enforcement has been put in place. The latter have been considered in detail in the previous chapter and the present chapter is concerned with the four general remedies. Whether the remedy of specific performance or injunction will be available will depend upon the circumstances considered below but (always assuming the existence of a cause of action) the remedy of damages will (unless statute-barred) be available in every case, although in the absence of proof of damage resulting from the breach, the recoverable damages may be nominal. Each of the four general remedies is considered separately although, in any given proceedings, any of them may, where appropriate, be sought in combination or in the alternative.

SPECIFIC PERFORMANCE Jurisdiction 30.3 Since actions for specific performance of positive covenants will not (generally) involve the sale of property or the grant of a lease, the limitation on the availability of the remedy in the county court contained in section 23(d) of the County Courts Act 1984 does not apply.1 Accordingly, since the jurisdiction of the county court in actions founded on contract is now unlimited,2 it would appear to have jurisdiction to grant specific performance in the case of any covenant not falling under section 23(d).

1 See Bourne v McDonald [1950] 2 KB 422. 2 Section 15 of the Act.

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30.4  Remedies for breach of positive covenants

The court’s power 30.4 Specific performance is an equitable remedy the object of which is to secure actual performance of a positive obligation imposed by agreement. It is in effect a form of mandatory injunction requiring performance of the contract. The commentary set out in Chapter 13, in relation to mandatory injunctions, is therefore of relevance, with suitable adaptation. Its availability is dependent upon the case being one in which the court has power to grant specific performance and the court being satisfied that as a matter of discretion it ought to make an order. 30.5 Thus, the court has no power to grant specific performance in favour of a volunteer,3 if damages will be sufficient compensation,4 where the defendant does not have it in his legal power to comply with an order,5 where there is uncertainty as to the mode of performing the covenant,6 if a personal service is involved which is either continuous or is of a nature which cannot be readily superintended by the court,7 or if the obligation is subject to a condition precedent.8

3 4

5

6

7

8

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Morris v Burroughs (1737) 1 Atk 399, subsequent proceedings (1743) 2 Atk 627; Penn v Lord Baltimore (1750) 1 Ves Sen 444; Jefferys v Jefferys (1841) Cr & Ph 138. Flint v Brandon (1803) 8 Ves 159 (covenant to make good a gravel pit – specific performance not available since the issue, on the facts, was one of money); Ryan v Mutual Tontine Westminster Chambers Association [1893] 1 Ch 116, CA (damages held to be a sufficient remedy for breach by a landlord of a block of flats of a covenant to appoint a resident porter with very detailed duties – contra, Posner v Scott-Lewis [1987] Ch 25; Rogers v Challis (1859) 27 Beav 175 (agreement to borrow a sum of money on mortgage not specifically enforceable); London and South Western Rly Co v Humphrey (1858) 32 LTOS 70 (covenant for a simple indemnity not specifically enforceable but covenant to do the required act by way of indemnity is specifically enforceable); Beswick v Beswick [1968] AC 58 (agreement to pay an annuity to a third party who alone would suffer loss from non-payment – specifically enforceable as the nominal damages to which the estate of the covenantee would be entitled would be inadequate damages). In Crampton v Varna Rly Co (1872) 7 Ch App 562, specific performance of a written agreement (supported by consideration) for the payment of an annual sum of £500 was refused notwithstanding that no action would lie at law becuase the agreement was not executed as a deed. As where the original covenantor has disposed of the land on which performance of the covenant is to take place: see, eg Radford v De Froberville [1977] 1 WLR 1262 (Oliver J) (covenant to build a boundary wall on the covenantor’s land); Surrey County Council v Bredero Homes Ltd [1993] 1 WLR 1361, CA (covenant by estate developer to carry out development of a housing estate in accordance with the terms of a planning permission and approved scheme). Wilson v Northampton and Banbury Junction Rly Co (1874) 9 Ch App 279 (contract to construct ‘a station’); Greenhill v Isle of Wight (Newport Junction) Rly Co (1871) 23 LT 885 (contract for the construction of a railway line subject to a specification of works to be agreed); Tito v Waddell (No 2) [1977] Ch 106 (covenant to ‘replant’); Parker v Camden London Borough Council [1986] Ch 162, CA (covenant to keep in repair services for (inter alia) space heating or heating water—specific performance withheld pending inspection of the installations to discover what precisely was required to be done). Rigby v Connol (1880) 14 ChD 482; Fortescue v Lostwithiel and Fowey Rly Co [1894] 3 Ch 621. In Posner v Scott-Lewis [1987] Ch 25, a covenant by a landlord of a block of flats to employ a resident porter to keep the communal areas clean, to be responsible for the central heating and to collect refuse from the flats, was held by Mervyn Davies J to be specifically enforceable. In C H Giles & Co Ltd v Morris [1972] 1 WLR 307, at 313, Megarry J drew a distinction between specific performance of continuous personal services and specific performance of the execution of an agreement which contains a provision for such services. See, also, Tito v Waddell (No 2) [1977] Ch 106, per Megarry V-C at 321 and Co-operative Insurance Society Ltd v Argyll Stores (Holdings) Ltd (1995) Times, 29 December, CA. Cornish v Brook Green Laundry Ltd [1959] 1 QB 394, CA.

Specific performance 30.8

The court’s discretion 30.6 The court will only make an order if it is appropriate to do so as a matter of discretion. The starting point is that where an agreement which is susceptible to specific performance has been freely entered into without any fraud, accident or mistake, then an order ought prima facie to be made.9 But if an order would result in undue hardship,10 or the claimant is in breach of his interdependent obligations or is not ready and willing to carry out his own future obligations,11 or if he has delayed unduly in bringing proceedings,12 then specific performance will, as a matter of discretion, usually be refused. In exercising its discretion, the court must act judicially according to the fixed and settled rules of equity13 and not arbitrarily. 30.7 A positive covenant to carry out works of construction or repair which benefit the land of the covenantee will (subject to any discretionary considerations) ordinarily be susceptible to a decree of specific performance provided that the following two conditions are satisfied:14 ‘The first is that the building work, of which he seeks to enforce the performance, is defined by the contract; that is to say, that the particulars of the work are so far definitely ascertained that the court can sufficiently see what is the exact nature of the work of which it is asked to order the performance. The second is that the [claimant] has a substantial interest in having the contract performed, which is of such a nature that he cannot adequately be compensated for breach of the contract by damages.’ 30.8 In Carpenters Estates Ltd v Davies,15 the court ordered specific performance of a covenant by a vendor contained in a transfer of land whereby the vendor undertook to make certain roads and sewers on the vendor’s retained land to serve the purchaser’s land.

9

Per Jessel MR in Leech v Schweder (1874) 9 Ch App 465n, reversed on other grounds, 9 Ch App 463. In Hall v Warren (1804) 9 Ves 605, Grant MR said that where a contract was entered into by a competent party and its nature and circumstances were unobjectionable, then specific performance was as much, of course, as damages at law. See also, Buckle v Mitchell (1812) 18 Ves 100. 10 Duke of Bedford v British Museum Trustees (1822) 2 My & K 552. As to the effect of undue difficulty and expense of performance, see Storer v Great Western Rly Co (1842) 2 Y & C Ch Cas 48 and Cooke v Chilcott (1876) 3 ChD 694; Tito v Waddell (No 2) [1977] Ch 106; and as to inadequacy of price realised at an auction see White v Damon (1802) 7 Ves 30, per Lord Eldon LC at 34. 11 Australian Hardwoods Pty Ltd v Railways Comr [1961] 1 WLR 425, PC. But breach of an independent obligation will not necessarily be a bar: Wells v Maxwell (1863) 32 Beav 408 (claimant who had agreed to make a road and sell a piece of land to the defendant not precluded from enforcing the agreement for sale although he may have been in breach of his obligation to construct the road). 12 Scolefield v Whitehead (1690) 2 Vern 126 (covenant to permit digging of black stones not enforced after delay of 60 years); Hood v North Eastern Rly Co (1870) 5 Ch App 525 (covenant with owner of land to use station as a first class passenger station – not so used for 21 years – successor in title of original covenantee held entitled to specific performance); Tilley v Thomas (1867) 3 Ch App 61; cf Williams v Greatrex [1957] 1 WLR 31, CA and Joyce v Joyce [1978] 1 WLR 1170 (Megarry V-C). 13 Goring v Nash (1744) 3 Atk 186; Haywood v Cope (1858) 25 Beav 140. 14 See the judgment of Romer LJ in Wolverhampton Corpn v Emmons [1901] 1 KB 515, at 525, as interpreted by Farwell J in Carpenters Estates Ltd v Davies [1940] 1 All ER 13, at 17A–18B. 15 Above.

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30.9  Remedies for breach of positive covenants It would seem, however, that Romer LJ’s requirement ‘that the building work, of which he seeks to enforce the performance, is defined by the contract’ must be taken as subject to the rule id certum est quod certum reddi potest (‘that is certain which can be made certain’). 30.9 Thus, a covenant ‘to keep in repair’ a building or installation in a building does not itself define the works which may from time to time be required, yet such a covenant may be specifically enforceable. The particularity of the required works may be established by evidence and, if necessary, the court may order an inspection for that purpose prior to making an order.16 30.10 Specific performance will not be ordered of a covenant by a purchaser to indemnify the vendor against a future breach of a positive covenant for which the vendor remains liable since damages will provide an adequate remedy. But where in such a case the purchaser also covenants to do the act required by the covenant, then specific performance of the latter covenant can be ordered.17

Cases of urgency 30.11 Notwithstanding the introduction of the Civil Procedure Rules, an application for summary judgment for specific performance does not appear to be possible where the application is for specific performance of a restrictive covenant.18 Unlike the position in the case of injunctions,19 there is also no established practice of seeking an order of specific performance by interim proceedings, and again the CPR do not provide for such an application. It seems, though, that in ‘most exceptional circumstances’20 a mandatory injunction in the form of an order for specific performance may be granted on an interim application. In Parker v Camden London Borough Council,21 the Court of Appeal was prepared to make such an order to compel performance of a clause in a standard form of tenancy agreement requiring the defendant council to keep a central heating system serving a block of flats in serviceable repair. In this case, the exceptional circumstances consisted of the tenants’ major discomfort and inconvenience and a real risk of damage to health flowing from an admitted breach. However, the cause of the failure of the heating system not having been investigated (due to a strike), no evidence was available as to precisely what works were required to be carried out. Consequently, no order could be made until after an inspection by a heating engineer – which the court ordered pursuant to what was then RSC Order 29, rule 2, and is now CPR, rule 25.1(c)(ii), with a view to an injunction being granted.22

16 As in Parker v Camden LBC [1986] Ch 162 – see below. 17 See London and South Western Rly Co v Humphrey (1858) 32 LTOS 70. 18 As it is not within the cases listed in Practice Direction 24, para 7.1 in relation to which such an application can be made. 19 As to which, see para 13.54 above (and 30.26 below). 20 Per Browne-Wilkinson LJ in Parker v Camden London Borough Council [1986] Ch 162, at 177A–B. 21 Above. 22 See further as to mandatory injunctions, below at para 30.28.

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Damages etc for specific performance 30.15

Enforcement of the order 30.12 If the court makes an order requiring a party to do a specific act within a time specified by the order, then if an individual to whom it is directed does not comply within that time, an order for committal may be made (CPR, rule 81.4) or a writ of sequestration issued against the property of that person in default (CPR, rule 81.20). The usual mode of enforcement would be by way of committal order (which may in the first instance be suspended on terms that the required act(s) be carried out). In the case of a body corporate, the order may be enforced by a writ of sequestration against the property of the company or corporation of any director or other officer of it (CPR, rule 81.20(1) and (3)). 30.13 Further, the court can, in appropriate circumstances, order that the claimant be permitted to carry out the required works at the expense of the defendant23 or, if the execution of documents or transfer of property is involved, it may, in exercise of its statutory jurisdiction, make a vesting order or appoint a person to convey.24

DAMAGES IN ADDITION TO OR IN SUBSTITUTION FOR SPECIFIC PERFORMANCE The statutory jurisdiction 30.14

Section 50 of the Senior Courts Act 198125 provides as follows:

‘Where the Court of Appeal or the High Court26 has jurisdiction to entertain an application for an injunction or specific performance, it may award damages in addition to, or in substitution for, an injunction or specific performance.’ 30.15 This is the successor provision to Lord Cairns’ Act, and damages under what is now technically section 50 are generally still referred to as damages under Lord Cairns’ Act. For general principles relating to awards of such damages in lieu of an injunction, which are applicable equally to damages in lieu of specific performance, see Chapter 13 above. Some brief points will be made here in the context of specific performance.

23 CPR, rule 70.2A. See Parker v Camden London Borough Council [1986] Ch 162 and Wilson v Furness Rly Co (1869) LR 9 Eq 28. 24 See, eg s 39 of the Senior Courts Act 1981 and ss 48 and 50 of the Trustee Act 1925. 25 Replacing s 18(3) of the Supreme Court of Judicature (Consolidation) Act 1925. The jurisdiction was first conferred on the Court of Chancery by s 2 of the Chancery Amendment Act 1858 (Lord Cairns’ Act). For the text of the latter section and a further discussion on s 50 of the 1981 Act, see above at para 13.75 et seq. 26 For the corresponding powers of the county court in cases which are within its jurisdiction, see s 38 of the County Courts Act 1984; and as to the jurisdiction of the county court to award specific performance, see s 23(d) of that Act.

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30.16  Remedies for breach of positive covenants

Damages in addition to specific performance 30.16 If the court grants specific performance, then under the section it may also make an award of damages. In many cases, specific performance will be ordered in respect of an obligation which is binding at common law and which is therefore actionable in damages independently of any claim for specific performance – and in these cases the section is now stating the obvious in terms of the court’s ability to award damages. However, in some cases an obligation which is enforceable by specific performance may not be actionable at law – and in these cases damages could not be awarded apart from the section. 30.17 In the case of positive covenants entered into for the benefit of the covenantee’s land, an original covenantee or a successor who can satisfy all the common law requirements for the passing of the benefit of the covenant to him27 can sue for specific performance in equity and damages at common law independently of section 50. But a person who claims as a subsequent owner of a purely equitable interest in the land will only be entitled to enforce the covenant in equity. In the event of breach, such an owner could issue proceedings for specific performance and damages in addition (or in substitution) under the section but could not bring an action for damages unrelated to specific performance (with the exception of a restitutionary claim, as considered below). 30.18 Damages in addition to specific performance will, in general, not be assessed at the date of the breach but as at the date when they fall to be assessed.28 This may be a date subsequent to the making of the order of specific performance in cases where a timetable for implementing the order is laid down on its further consideration.29

Damages in substitution for specific performance 30.19 Damages in substitution for specific performance can only be awarded where the obligation which has not been performed is one in respect of which the court has power to make an order for specific performance,30 but where either (i) as a matter of the exercise of the court’s discretion it declines to make an order,31 or, (ii) an order having been made, it is not complied with through no fault of the claimant.32

27 See above, para 27.3 et seq. 28 Grant v Dawkins [1973] 1 WLR 1406 (Goff J); Wroth v Tyler [1974] Ch 30 (Megarry J). 29 Ibid. 30 Rogers v Challis (1859) 27 Beav 175; Re Northumberland Avenue Hotel Co Ltd (1886) 33 ChD 16; Lavery v Pursell (1888) 39 ChD 508; De Brassac v Martyn (1863) 2 New Rep 512; Ferguson v Wilson (1866) 2 Ch App 77; Acraman v Price (1870) 18 WR 540. As to such obligations, see above, para 30.4. 31 See Hipgrave v Case (1885) 28 ChD 356; Wilson v Northampton and Banbury Junction Rly Co (1874) 9 Ch App 279; Wroth v Tyler [1974] Ch 30; Tito v Waddell (No 2) [1977] Ch 106. 32 Johnson v Agnew [1980] AC 367, HL. Prior to this decision it was generally thought that once specific performance had been granted, damages could not subsequently be awarded: see Hythe Corpn v East (1866) LR 1 Eq 620; Capital and Suburban Properties Ltd v Swycher [1976] Ch 319.

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Damages etc for specific performance 30.23 A claim for damages in substitution for specific performance under the Act is a separate remedy from a claim for damages at common law and in order to be entitled to claim damages under whichever of the two should prove to be viable or the most favourable, a claim should, in the case of an action for breach of a covenant which can be enforced at law, be made both under the Act and at common law.33

The measure of damages under the Act 30.20

See, in general, para 13.100 et seq above.

30.21

The following points may usefully be noted here, however.

Prior to the decision of the House of Lords in Johnson v Agnew,34 there appeared to be strong pointers in certain Court of Appeal35 and High Court36 cases for the proposition that the assessment of damages under the statutory jurisdiction could be significantly different from the assessment of damages at common law (and more favourable). In particular, in Wroth v Tyler,37 Megarry J held that specific performance, though in principle available, should not be awarded, that damages in lieu should be awarded and that under the statutory jurisdiction the court was entitled to assess damages by reference to the loss which could be shown to have been sustained as at the date of judgment and not merely to the lesser loss sustained as at the date of the breach, as is generally the position at common law. 30.22 Further, in Wrotham Park Estate Co v Parkside Homes Ltd,38 Brightman J appears at first sight to have assessed damages on the basis of the benefit conferred on the covenantor by being permitted to continue the breach rather than on the basis of the loss suffered by the covenantee in consequence of the breach. 30.23

However, in Johnson v Agnew, Lord Wilberforce39 said:

‘Since the decision of this House, by a majority, in Leeds Industrial Cooperative Society Ltd v Slack,40 it is clear that the jurisdiction to award damages in accordance with section 2 of Lord Cairns’ Act (accepted by the House as surviving the repeal of the Act) may arise in some cases in which damages could not be recovered at common law; examples of this would be damages in lieu of a quia timet injunction and damages for breach of a restrictive covenant to which the defendant was not a party. To this extent the Act created a power to award damages which did not exist before at common law. But apart from these, and similar cases where damages could not be

33 See Hipgrave v Case (1885) 28 ChD 356, CA. 34 [1980] AC 367. 35 Chapman, Morsons & Co v Auckland Union Guardians (1889) 23 QBD 294; Dreyfus v Peruvian Guano Co (1889) 43 ChD 316, per Fry LJ at 942. 36 Wroth v Tyler [1974] Ch 30; Wrotham Park Estate Co v Parkside Homes Ltd [1974] 1 WLR 798. 37 [1974] Ch 30. 38 [1974] 1 WLR 798. 39 [1980] AC 367, at 400B–C and G–H. Lord Fraser of Tullybelton, Lord Keith of Kinkel and Lord Scarman expressed their ‘entire’ agreement with Lord Wilberforce’s speech and Lord Salmon expressed his agreement. 40 [1924] AC 851.

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30.24  Remedies for breach of positive covenants claimed at all at common law, there is sound authority for the proposition that the Act does not provide for the assessment of damages on any new basis.’ Lord Wilberforce, after referring to certain authorities,41 then concluded: ‘On the balance of these authorities and also on principle, I find in the Act no warrant for the court awarding damages differently from common law damages …’42 30.24 As to the decision in Wroth v Tyler, Lord Wilberforce found no difficulty in finding that whilst, at common law, damages are normally assessed at the date of the breach, this is not an absolute rule and that, if justice required, the court has power to fix such other date as may be appropriate in the circumstances.43 As to the method of assessment of damages adopted by Brightman J in Wrotham Park Estate Co v Parkside Homes Ltd, this case was not referred to by Lord Wilberforce in his speech. However, in Jaggard v Sawyer,44 Sir Thomas Bingham MR explained the true basis of the decision in relation to the mode of assessment of damages as being compensatory still (rather than to strip the defendant of his gains) with the loss the claimant is to be compensated for extending to the loss that he has suffered by the defendant not having observed the need to obtain the claimant’s consent to a release of the covenant for the required purposes. Obviously, in determining what figure might reasonably have been demanded for such a release, the benefit the defendant has obtained, or will obtain, from doing the acts the covenant provided should not be done, will be relevant.45 30.25 In relation to the date for determining the loss suffered, there is a difference of emphasis under section 50 as compared with the position at common law. As stated above, at common law, the general rule is that the loss suffered is to be ascertained at the date of the breach. However, this is only a general rule even at common law (see below) and it admits of modification to ensure the damages awarded are truly compensatory. Under the section, damages are in substitution for specific performance and, as Megarry J pointed out in Wroth v Tyler,46 ‘the section is speaking of the time when the court is making its decision to award damages in substitution for specific performance, so that it is at that moment that the damages must be a substitute’. However, this, in turn, is also not an absolute rule and the actual date may, according to the circumstances, be either earlier47 or later.48

41

Ferguson v Wilson (1866) 2 Ch App 77, per Turner LJ at 88; Rock Portland Cement Co Ltd v Wilson (1882) 48 LT 386; Fry on Specific Performance (6th edn, 1921), p 602; Wroth v Tyler [1974] Ch 30; Grant v Dawkins [1973] 1 WLR 1406; Horsler v Zorro [1975] Ch 302, at 316, and Malhotra v Choudbury [1980] Ch 52. 42 It appears that before the House of Lords neither party argued that the measure of damages under Lord Cairns’ Act differed from the measure of damages at common law: see the observations of Millett LJ in Jaggard v Sawyer [1995] 2 All ER 189, at 211a–b. Millett LJ, when leading counsel at the bar, had represented the respondents (the Johnsons) in Johnson v Agew. 43 See Radford v De Froberville [1977] 1 WLR 1262, considered below at para 30.35. 44 [1995] 2 All ER 189. 45 At pp 281H–282D (Sir Thomas Bingham MR, with whom Kennedy LJ agreed) and at pp  291D–291H (Millet LJ). The land itself is effectively diminished in value by reason of the reasonable sum for release that could otherwise be expected to be paid for release of the covenant: see p 291F. See, further, para 13.103 et seq above. 46 [1974] Ch 30, at 58F. 47 As in Johnson v Agnew, above. 48 See Grant v Dawkins [1973] 1 WLR 1406 (a case on damages in addition to specific performance).

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Injunction 30.28

INJUNCTION 30.26 The remedy of injunction is the primary equitable remedy for enforcing restrictive covenants and other negative covenants. The availability of both prohibitory and mandatory injunctions to enforce restrictive covenants has been fully dealt with in Chapter 13. Specific performance is the corresponding equitable remedy for enforcing covenants which impose a positive obligation. However, in certain circumstances, an injunction may be required either as ancillary to specific performance or as the primary remedy.

Injunction as an ancillary remedy 30.27 An application for a prohibitory or mandatory injunction would be appropriate where different or inferior works from those required to be carried out by the covenant were being proposed or constructed.49 The prospects of obtaining such an injunction will depend upon similar considerations to those which apply in relation to restrictive covenants, since in effect the relief sought will be in respect of an implied obligation not to carry out works except in accordance with the requirements of the covenant.50

Mandatory injunction as a primary remedy 30.28 In origin, it would seem that the mandatory injunction was devised in order to compel the undoing of something which was done by a party who was under an obligation not to do the thing in question.51 It thus presupposed something wrongful having been done and in this sense was supplemental to the prohibitory injunction.52 On the other hand, specific performance was devised in order to compel the doing of something which a party was under a contractual obligation to do but had not done.53 49

Surrey County Council v Bredero Homes Ltd [1993] 1 WLR 1361 concerned such a situation, but as Dillon LJ pointed out at pp 1364A–C, the claimants ‘never sought an interim injunction to restrain the defendant from developing the land otherwise than in accordance with the first planning permission. They never sought an injunction at the trial requiring the defendant to pull down the completed houses. They recognised that there was never any practical possibility of such an injunction being granted. There was a formal amendment of the relief sought at the trial to raise in form a claim for an injunction, but that was not pursued’. 50 Cf Catt v Tourle (1869) 4 Ch App 654. In Cooke v Chilcott (1876) 3 ChD 694, Malins V-C, considering himself unable to decree specific performance of a covenant to erect a pump and reservoir and to supply water to houses built on the covenantee’s land (on the ground, since exploded, that such works could not be superintended), granted a prohibitory injunction restraining the defendant from allowing the work to remain unperformed. For criticism of this decision generally, see Lindley LJ’s judgment in Austerberry v Oldham Corpn (1885) 29 ChD 750. 51 The undoing may involve either demolition or restoration: see Bidwell v Holden (1890) 63 LT 104 (mandatory injunction to restore and re-place fences wrongfully broken down and removed); Jackson v Normanby Brick Co [1899] 1 Ch 438 (demolition of buildings). 52 See the judgment of Knight Bruce V-C in Great North of England, Clarence and Hartlepool Junction Rly Co v Clarence Rly Co (1845) 1 Coll 507; Davies v Gas Light and Coke Co [1909] 1 Ch 708, CA. 53 For the early history of specific performance, see Holmes, ‘Early English Equity’, 2 Select Essays in Anglo-American Legal History 705; Fry ‘Specific Performance and Laesio Fidei’ (1889) 5 Law Quarterly Review 235.

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30.29  Remedies for breach of positive covenants Prima facie, therefore, the remedy of mandatory injunction is not apt for enforcing a positive covenant since the condition precedent of a wrongful act having been committed is not generally satisfied.54 However, the boundaries between specific performance and a mandatory injunction are not clearly defined and it would seem that if, for any reason, the normal procedure for obtaining specific performance is not available but justice demands a mandatory order, then a mandatory injunction analogous to specific performance will be granted.55 Further, the injunction rather than specific performance is sometimes prescribed by statute as the remedy for enforcing positive covenants. Thus, section 106(1) of the Town and Country Planning Act 199056 now makes clear provision enabling a person interested in land to enter into both restrictive and positive covenants (‘planning obligations’) with the local planning authority for the area,57 and section 106(5) provides that, ‘A restriction or requirement imposed under a planning obligation is enforceable by injunction’.58 This therefore applies to positive requirements as well as to restrictions. The remedy of direct action is also available (under section106(6) of the Act).59

COMMON LAW DAMAGES 30.29 The remedy at common law for breach of a personal covenant is damages. Historically, some covenants relating to land were real covenants in the sense that in the event of breach, the covenantor would be required to make real recompense in the form of yielding up land.60 However, this type of ‘covenant real’ has long since ceased to be recognised and the only remedy now available at common law for breach of covenant is damages.61

54 In Bourne v McDonald [1950] 2 KB 422, Sir Raymond Evershed MR observed: ‘to my mind, there is, or may be, a distinction in the sense in which that common term “specific performance” is used [as compared with a mandatory injunction]’. 55 See Parker v Camden London Borough Council [1986] Ch 162, on the basis that summary judgment for specific performance was not available. This was the position prior to the introduction of the CPR (the categories of case in which specifics performed could be the subject of an appliction for summary judgment being those set out in RSC Order 86, r 1, which did not include the enforcement of specific performance), and appears to remain the position after it (where the same categories of case are prescribed by CPR Part 24, PD paragraph 7.1). See further, para 30.11 above. 56 As substituted by section 12(1) of the Planning and Compensation Act 1991. 57 See Chapter 32. 58 See para 32.71 below. 59 See para 32.72 below. 60 See Co Litt 384b: ‘But note, there is a diversitie betweene a warrantie that is a covenant reall, which bindeth the partie to yeeld lands or tenements in recomepence, and a covenant annexed to the land, which is to yeeld but dammages, for that a covenant is in many cases extended further than the warrantie’. One of the examples cited by Coke of the latter type was the covenant in Pakenham’s Case 2 H 4.6 considered above at para 27.14. 61 The expression ‘covenant real’ is sometimes used to described covenants whose burden runs with the land, such as covenants in leases which touch and concern the demised land, and covenants whose benefit runs with freehold land (and thus formerly accrued to the heir who inherited the freehold land) but the only remedy available for breach of such covenants at common law is still damages. In this respect, therefore, such covenants are personal.

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Common law damages 30.33 30.30 If damages at common law are sought as an alternative or in addition to specific performance (or injunction), then this should be clearly pleaded since a claim for specific performance or alternatively damages simpliciter may be construed as a claim for damages in substitution for specific performance – the latter being available only if the case is one in which the court has jurisdiction to grant specific performance.62

The breach complained of 30.31 As a preliminary to considering the measure of damages, it is first necessary to ascertain the respects in which the covenantor has fallen short of his obligations under the covenant. This involves two questions: (1) What is required to be done in order to comply with the covenant? This is a question of construction of the covenant.63 (2) In what respects, if any, has the covenantor done less? This a question of fact.64

The measure of damages 30.32 The general principle underlying the assessment of damages for breach of contract at common law was stated by Parke B in Robinson v Harman65 as follows: ‘The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.’ 30.33 This principle is refined in the two well-known rules laid down in the leading case of Hadley v Baxendale66 and is circumscribed by a subjective principle of reasonableness.67 These cases show that the principle underlying damages for breach of agreement is compensatory and not restitutionary (ie how far the party in breach benefits) or, except in the single case of exemplary damages, punitive. Before the amount of the loss suffered from the breach of covenant can be quantified, two questions fall to be answered. First, at what date is the loss to be ascertained? Second, what genuine loss had he sustained on that date? Damages will then be assessed on the basis of the sum required to compensate for that loss.

62

Hipgrave v Case (1885) 28 ChD 356, CA (specific performance ruled out by the property in question having been sold so that the alternative claim for damages failed). For damages in substitution for specific performance, see para 30.19 above. 63 Doe d Mence v Hadley (1849) 14 LTOS 102 (covenant for fencing with good and substantial walls or quick fences – whether post-and-rail fencing complied); Wilson v Northampton and Banbury Junction Rly Co (1874) 9 Ch App 279 (agreement with a landowner to build a railway station, nothing being said as to its size or accommodation or as to whether it would be used). 64 Doe d Mence v Hadley, above. 65 (1848) 1 Exch 850, at 855. 66 (1854) 9 Exch 341. 67 See the cases considered by the House of Lords in Ruxley Electronics and Construction Ltd v Forsyth [1995] 3 All ER 268.

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30.34  Remedies for breach of positive covenants

The date for ascertaining the loss 30.34 The general rule is that damages are assessed on the basis of the loss shown to have been suffered at the date of the breach. But this is not an inflexible rule and if to follow it would give rise to injustice, the court has power to fix such other date as may be appropriate in the circumstances.68 30.35

Thus, in Radford v De Froberville:69

A purchaser of a plot of land covenanted with the vendor who owned an adjoining house, let as an investment, to develop the plot and erect a boundary wall of a thickness and construction specified in the covenant. The purchaser resold the plot to a third party without having developed it or erected the wall, taking from the third party a covenant by way of indemnity only to perform the covenant. The third party also omitted either to develop the plot or to erect the wall. The original covenantee sued the original covenantor for breach of covenant, claiming as damages for the breach in respect of the wall, the cost of constructing an identical wall within the boundaries of his own land. The covenantor issued third party proceedings against her purchaser and on the matter was referred to a master for the assessment of damages who (under the procedure then in force) adjourned it to a judge for the determination of the preliminary issue as to the correct measure of damages. The third party contended that the claimant’s loss was not the cost of building the wall but the amount by which the value of the plaintiff’s house, as an investment, had been diminished by the absence of the wall. 30.36 Oliver J held that if, as he found, the claimant genuinely intended to construct the wall, the amount of his loss was the cost of such construction at the date of the hearing and that although, by reason of rapid inflation, that cost had increased considerably between the date when the wall ought to have been constructed and the date of the hearing, there had been no undue delay in commencing the proceedings and, once proceedings had been commenced and were conducted with due expedition, the defendant could not complain that it was unreasonable for the claimant to delay carrying out the work for himself before damages were assessed, particularly where his right to any damages at all was being contested.70

Method of assessing the loss 30.37 In order to establish that the measure of damages should equal the cost of performing the covenant as nearly as is practicable, the court must be satisfied by evidence which ‘without assuring certainty, nevertheless carries conviction’71 that the claimant genuinely intends himself to carry out the works necessary to give effect, as near as is practicable, to the terms of the covenant. In the absence of such evidence, the damages will be limited to the diminution in value (if any) of the claimant’s land attributable to the breach or (if there is no such

68 69 70 71

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See Johnson v Agnew [1980] AC 367, at 401. [1977] 1 WLR 1262 (Oliver J). See also the landlord and tenant case of Jones v Herxheimer [1950] 2 KB 106, where a landlord who had already carried out the repairs required to be done by the tenant was held entitled to recover the reasonable costs incurred. Per Megarry VC in Tito v Waddell (No 2) (1977] Ch 106, at 333.

Common law damages 30.38 diminution) will be based upon some general loss such as loss of amenity or of convenience.72 Thus, in Wigsell v School for Indigent Blind:73 The defendants purchased some 12 acres of land from the vendor and covenanted with the vendor to erect a wall to a height of seven feet on all sides abutting on land retained by the vendor (since deceased). The defendants originally intended to construct an asylum or school for the blind on the land and the object underlying the covenant was the protection of the grantor’s land from the effects of the proposed use. The defendants failed to erect the wall and the vendor’s executors and devisees brought an action against them for damages for breach of the covenant claiming as damages a sum equal to the cost of building a similar wall. The evidence showed that the defendants had abandoned their original proposed use of the land and that the amount by which the value of the retained land was diminished by the non-erection of the wall was far less than the cost of building the wall. Further, it was not established that the claimants themselves intended to erect a similar wall. On these facts, the Divisional Court (on a motion to set aside the verdict of a jury which assessed the damages at £750) held that the true measure of damages was the difference between the value of the claimants’ land without the wall and its value if the wall had been erected and that, on this basis, the amount awarded being palpably excessive, the verdict could not stand. 30.38 Similar principles apply where the covenantor does work purporting to meet the requirements of a covenant but which falls short of the required performance. Prima facie, the measure of damages will be ascertained on the basis of the difference between the value of what the covenantee actually gets and the value of what he should have got.74 But again, if the covenantee can demonstrate a genuine intention to replace or make good the work done to produce the works required by the covenant, then his loss will, in those circumstances, be equal to the value of the works required by the covenant and the measure of damages will prima facie be the cost of the required works.75 However, if, in the latter case, the court takes the view that it would be unreasonable for the claimant, taking into account his own predilections, to insist on replacement of the defective works by

72 See Ruxley Electronics and Construction Ltd v Forsyth [1995] 3 All ER 268, HL. In that case, Phillips J, at first instance, had found as a fact that Mr Forsyth’s stated intention of rebuilding a swimming pool, which had been constructed at a shallower depth than that contracted for, would not persist for long after the litigation had been concluded. Both Phillips J, and afterwards the House of Lords (reversing a majority decision of the Court of Appeal), held that in those circumstances it would be ‘mere pretence’ to say that the cost of rebuilding the pool was the loss which Mr Forsyth had in fact suffered. There being, on the expert evidence, no diminution in the value of Mr Forsyth’s property as a result of the breach, Phillips J awarded £2,500 as general damages. The House of Lords, whilst rejecting Mr Forsyth’s claim to damages of £21,560 to enable him to demolish and reconstruct the pool to the agreed depth, upheld the award of £2,500. Before the House of Lords, Mr Forsyth offered to give an undertaking to expend damages which were sufficient for the purpose, on rebuilding the pool. But Lord Lloyd of Berwick treated this as based more on an intention to punish the defendants for their breach rather than on a genuine desire to have a pool of the contractual depth. 73 (1882) 8 QBD 357. 74 See the observations of Sir David Cairns in G W Atkins Ltd v Scott (1980) 7 Const LJ 215, at 220, referred to with approval by Lord Lloyd of Berwick in Ruxley Electronics and Construction Ltd v Forsyth [1995] 3 All ER 268, HL. 75 See Ruxley Electronics and Construction Ltd v Forsyth, Laddingford Enclosures Ltd v Forsyth [1995] 3 All ER 268, HL.

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30.39  Remedies for breach of positive covenants the stipulated works,76 then the claimant will be confined either to difference in value between the two or (if there is no difference in value) to general damages.77 Where the claimant has put it out of his power to obtain an injunction against the building of more than a certain number of houses permitted by a covenant, for example, by not bringing proceedings until after the defendant has sold the houses, so that the claimant is unable to obtain an injunction, or award of specific performance, by reason of the sale, no more than nominal damages will be able to be recovered at common law: see Surrey County Council v Bredero Homes Ltd.78

APPOINTMENT OF A RECEIVER The jurisdiction 30.39

Section 37(1) of the Senior Courts Act 198179 provides that:

‘The High Court may by order (whether interlocutory or final) grant an injunction or appoint a receiver in all cases in which it appears to the court to be just and convenient to do so.’ 30.40 One of the occasions when this discretionary jurisdiction has been exercised is in support of the enforcement of covenants affecting property. Thus, in Hart v Emelkirk Ltd,80 a receiver was appointed on an interlocutory application made by long lessees of individual flats in two blocks where the reversioner had not for some time either collected rents and service charges payable by the lessees or carried out its obligations to repair under the leases. The receiver was authorised to give a good receipt for reserves which had been built up and were in the hands of one of the claimant lessees, to collect further rents and service charges and to carry out the obligations of the reversioner under the leases. This case, which appears to have been the first in which a receiver had been appointed in these circumstances, was cited with apparent approval by Nourse LJ in Evans v Clayhope Properties Ltd81 where a receiver had been appointed in somewhat similar circumstances on an interlocutory application to a master. Further, the jurisdiction was clearly recognised by the Court of Appeal in Parker v Camden London Borough Council.82 30.41 In the context of covenants entered into by a management company with freeholders, a similar occasion for the appointment of a receiver could arise in the event of default by the management company although in many cases the company would in any event be controlled by the freeholders. Such an appointment may also be appropriate to secure performance of a positive covenant which is binding upon an absent adjoining owner.

76

For example, if the cost of the work involved would be out of all proportion to the benefit to be obtained. 77 As in Ruxley Electronics and Construction Co v Forsyth, above. 78 [1993] 1 WLR 1361. 79 Partially replacing s 45 of the Supreme Court of Judicature (Consolidation) Act 1925 which replaced s 25(8) of the Supreme Court of Judicature Act 1873. 80 [1983] 1 WLR 1289 (Goulding J). 81 [1988] 1 WLR 358, CA. 82 [1986] Ch 162.

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31 Covenants and commonhold

INTRODUCTION 31.1 Commonhold was introduced by the Commonhold and Leasehold Reform Act 2002 (‘the 2002 Act’), which came into effect from 27 September 2004. It is a new form of freehold ownership, which applies where the freehold estate is registered as commonhold land. A brief summary of some aspects of it will be provided here, not least because it was introduced in large part because under the general law the benefit and burden of positive covenants will not pass, in the absence of specific and often artificial or complex arrangements, and this was seen as a particular difficulty in relation to the management of flats.

THE ADVANTAGES OF COMMONHOLD 31.2 Although freehold land still, mechanisms are introduced into commonhold ownership to enable positive, and other, obligations, to run with the land. The absence of an ability to enforce positive covenants against successors meant freehold flats could not be marketed. In relation to flats, occupiers obviously have a need to ensure maintenance of common parts and structures (and for payments to be made by occupiers in respect thereof). However, unless the land was leasehold the burden of any covenants imposed to achieve this would not generally run with the property. 31.3 A similar problem arose with separate houses with common features or access ways, and to shops or commercial units within a building or forming part of a commercial estate or a shopping park, where such things as boundary walls, common areas or estate roads needed to be maintained for the benefit of them, but positive obligations cannot run with the property in relation to freehold land. The commonhold system was devised as an answer to this problem. The 2002 Act provides that physically inter-dependent properties can now be held as part of a commonhold. Commonhold can cover everything from flats, sharing structural and servicing arrangements, to separate houses or commercial premises having the benefit of such things as estate roads.

THE NATURE OF COMMONHOLD 31.4 Where commonhold is used, each individual owner of a flat, house or other unit within a particular building, estate or other area, exclusively 793

31.5  Covenants and commonhold owns the freehold of their property but becomes a member of a commonhold association (a private company limited by guarantee, whose membership is restricted to the unit-holders within the development) which owns the freehold of the common areas of the development, and structural or other features of communal importance.1 This offers the benefits of freehold ownership, but with an appropriate mechanism for the maintenance and management of the common parts, which are run by the association to which the owner of each unit belongs, and which he has involvement in running. 31.5 The formalities required in order for land to be held as commonhold, and the detailed requirements in relation to registration are set out in the 2002 Act, the Commonhold Regulations 20042 (‘the 2004 Regulations’) and the Commonhold (Land Registration) Rules 2004.3 31.6 Obligations between unit-holders and the commonhold association must be set out in the ‘commonhold community statement’ which has to be lodged with the Land Registry with the application for registration as commonhold land. 31.7 The commonhold community statement is required by the Regulations to have particular contents and must be based on either the statutory template or the model form prescribed by Schedule 3 to the 2004 Regulations. It must contain provisions in relation to: (a) the rights and duties of the commonhold association; (b) the rights and duties of the unit holders within the commonhold scheme; and (c) provisions for the taking of decisions in connection with the management of the commonhold and other matters concerning it (section 31 of the Commonhold and Leasehold Reform Act 2002). This therefore effectively becomes the ‘local law’ of the community.

ENFORCEABILITY OF OBLIGATIONS 31.8 Section16(1) of the 2002 Act provides that all rights or duties conferred or imposed by a commonhold community statement on the holder of any unit within the scheme ‘shall affect a new unit-owner in the same way as it affected the former unit-holder’. In other words, the benefit of all such rights and the burden of all such obligations is by statute automatically passed on to the new unit-holder. This will include positive as well as negative obligations (including the payment of money for things that need to be done). Accordingly, covenants entered into by individual unit-holder(s) in favour of other unit-holder(s) are able to be directly enforced by and against whoever is the owner of the relevant units from time to time, whether the covenant is restrictive, negative or positive in nature, notwithstanding any change in the ownership of them, under the rules laid down in the commonhold community statement. 31.9 Where there is a transfer, the former unit-holder is at the same time freed from future liability by reason of section 16(2) of the 2002 Act. This provides that ‘A former unit-holder shall not incur a liability or acquire a right … 1 2 3

794

The land held by each category of owner is registered as a freehold estate in commonhold. SI 2004/1829, as amended. SI 2004/1830.

Winding-up of the commonhold association 31.14 under or by virtue of the commonhold community statement’ and is to be read in conjunction with section 16(3)(b) which states that this ‘is without prejudice to any liability or right incurred or acquired before a transfer takes effect’. By section 16(3)(a) it is not possible to contract out of these provisions. 31.10 Similarly, the obligations of the commonhold association (in relation to such things as the common parts, features and areas it is responsible for) will be enforceable by and against that Association by unit-holders, whoever from time to time comprise its members. This is because the property held by it will not pass out of the hands of the Association merely because one of the unit-holder members of the Association changes. Accordingly, the obligations will remain enforceable despite any such changes. 31.11 Under the required commonhold community statement, other than in relation to covenants requiring the payment of money, or where urgent action is required, prior to enforcement in the courts the unit-holder who wants enforcement is first required to negotiate or engage in alternative dispute resolution with the unit-holder in default, then if necessary involve the commonhold association. If, however, that is not successful, proceedings may be taken directly against the unit-holder in default. The obligations will be enforceable by and against the owner for the time being, notwithstanding a change in ownership.

WINDING-UP OF THE COMMONHOLD ASSOCIATION Voluntary winding up 31.12 Eighty per cent of the members are able to pass a resolution to wind up the commonhold.4 31.13

By section 47(2) of the 2002 Act:

‘A commonhold community statement may make provision requiring any termination statement to make arrangements: (a) of a specified kind, or (b) determined in a specified manner, about the rights of unit-holders in the event of all the land to which the statement relates ceasing to be commonhold land.’ It is not apposite to consider all the implications of winding up here, but in the context of covenants, it would be wise for the statement to require provision to be made in relation to what is to happen in relation to relevant covenants. 31.14 By section 47(1), where a commonhold association is voluntarily wound up, the association must (again by a majority of at least 80 per cent) agree a termination statement, but all that is required to be specified is: ‘(a) the commonhold association’s proposals for the transfer of the commonhold land following acquisition of the freehold estate in accordance with section 49(3), and (b) how the assets of the commonhold association will be distributed.’

4

Where 100 per cent of members agree, the procedure is slightly different to that which otherwise applies.

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31.15  Covenants and commonhold 31.15 Section 45(2) provides simply that the liquidator appointed by them must then within the prescribed period apply to the court for an order determining: ‘(a) the terms and conditions on which a termination application may be made, and (b) the terms of the termination statement to accompany a termination application.’ Agreeing a termination statement may not be easy, and, when made, may be unacceptable to over 20 per cent of members. The uncertainty involved in such matters if they arise may be one of the things which is capable of putting people, including lawyers, off commonhold ownership (the take-up of which has been limited in extent – see below).

Winding up by the court 31.16 A commonhold association may be wound up by the court on a petition under section 124 of the Insolvency Act 1986, on the grounds set out in section 122 of that Act, which include its inability to pay its debts or where ‘the court is of the opinion that it is just and equitable that the company should be wound up’. 31.17 Section 51 of the 2002 Act envisages a ‘succession order’ being made, with a successor commonhold association becoming the proprietor of the common parts in place of the original association, but provides no guidance on the contents of it.

FREQUENCY OF COMMONHOLD 31.18 In practice, commonhold has since its introduction only rarely been taken up and very little land has been registered as commonhold. It appears that developers, unless granting freeholds, prefer leaseholds (which may appear simpler for the developer and also offer opportunities for future revenue by the grant of lease extensions or sales of the freehold). Although existing leaseholds may also be converted into commonhold, the registered freeholder, all existing leaseholders, and all chargees must agree5 – with the result that this is rare. 31.19 The low incidence of commonhold seems unlikely to change. In the last Parliamentary statement in relation to the low take-up rate, Lord Faulks, Minister of State at the Ministry of Justice, said the Government had no plans to carry out a review of the Act.6

5

6

796

See s 3 of the Commonhold and Leasehold Reform Act 2002. Subsections (2)(e) and (f) allow regulations to deem consent to have been given in specified circumstances or to allow the court to dispense with consent, but reg 5 of the Commonhold Regulations 2004 only allows this to occur where a person whose consent is required cannot be identified or traced or does not respond to a request for consent. Hansard, HL Deb 7 May 2014, c 1471.

Part III Planning obligations relating to land

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32 Planning obligations

THE NATURE OF PLANNING OBLIGATIONS 32.1 ‘Planning obligations’ are different to ordinary land covenants. They grew up out of the law relating to restrictive covenants as applied to local authorities. However, they are creatures of statute, namely section 106 of the Town and Country Planning Act 1990 (TCPA 1990). Though not termed ‘covenants’, planning obligations have a similar effect in being able to regulate the use of land in the hands of those who subsequently acquire it (ie they run with the land). 32.2

There are, however, the following key distinctions:

(1) they are only enforceable by identified local planning authorities; (2) they include not just agreements, but obligations entered into unilaterally; (3) they can include positive and negative obligations not just those restrictive of the use of the land; (4) they are not registrable under the Land Charges Act 1972, but as local land charges under the Local Land Charges Act 1975; (5) if not registered they are not void or unenforceable (cf the position in relation to restrictive covenants registrable under the Land Charges Act 1972 or the Registered Land Act 2002), but compensation may be payable to those affected by non-registration;1 (6) they are not liable to be discharged or modified by the Upper Tribunal under section 84(1) of the Law of Property Act 1925, but may be discharged or modified by the planning authority itself under sections 106A to 106BC of the TCPA 1990, with a right of appeal to the Secretary of State for Communities and Local Government in the event of refusal to discharge (with appropriate oversight by the Administrative Court); (7) discharge or modification can occur under sections 106A to 106BC even though the obligation may not be obsolete in legal terms or meet any of the other requirements of section 84(1) of the 1925 Act, on the basis that it no longer serves any valid purpose.

1

See s 10(1) (para 32.66 below).

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32.3  Planning obligations

HISTORY 32.3 Section 52(1) of the Town and Country Planning Act 1971 (and previous Town and Country Planning Acts dating back to 1932) enabled a local planning authority to: ‘enter into an agreement with any person interested in land in their area for the purpose of restricting or regulating the development or use of the land, either permanently or during such period as may be prescribed by the agreement;’ and any such agreement could contain such incidental and consequential provisions (including provisions of a financial character) as appeared to the local planning authority to be necessary or expedient for the purposes of the agreement. 32.4 Section 52(2) provided that the local planning authority could enforce any such agreement against persons deriving title under that person in respect of that land, as if the local planning authority were possessed of adjacent land and as if the agreement had been expressed to be made for the benefit of such land. Accordingly, the local planning authority could enforce a planning agreement against later owners of the land where under the ordinary law it could do so in such circumstances. Therefore, the obligations in the agreement were enforceable against successors in title of the land to the same extent that they would be under the ordinary law of covenants where the covenant was taken for the benefit of adjacent land.2 32.5 However, it followed that in so far as the section permitted a planning agreement to impose positive as well as restrictive obligations on the landowner entering into a planning agreement, the positive obligations would not be enforceable against a successor since, as a matter of law, the burden of such a covenant would not run with the land notwithstanding the grantee owned adjacent land when it was granted. 32.6 This shortcoming was rectified, and more extensive power to impose positive obligations was conferred, by ancillary provisions originally enacted in section 126 of the Housing Act 1974 and re-enacted in section 33 of the Local Government (Miscellaneous Provisions) Act 1982. 32.7 This related to certain agreements entered into by local authorities with landowners (including those made in connection with the development of land) and provided that: ‘(2) If, in a case where this section applies,— (a) the instrument contains a covenant on the part of any person having an interest in land, being a covenant to carry out any works or do any other thing on or in relation to that land, and (b) the instrument defines the land to which the covenant relates, being land in which that person has an interest at the time the instrument is executed, and (c) the covenant is expressed to be one to which this section or section 126 of the Housing Act 1974 (which is superseded by this section) applies, 2

800

See paras 10.7–10.8 above.

Current section 106: planning obligations 32.10 the covenant shall be enforceable (without any limit of time) against any person deriving title from the original covenantor in respect of his interest in any of the land defined as mentioned in paragraph (b) above and any person deriving title under him in respect of any lesser interest in that land as if that person had also been an original covenanting party in respect of the interest for the time being held by him.’ Section 106(1)–(4) of the TCPA 1990 was originally enacted in the same terms as section 52(1)–(3) of the 1971 Act. 32.8 The present section 106 of the TCPA 1990 which created ‘planning obligations’ was introduced by the replacement of the previous section 106 of the Act. The new (ie present) section 106 was substituted by section 12(1) of the Planning and Compensation Act 1991. It came into effect on 25 October 1991. When the new (ie present) section 106 was enacted by the Planning and Compensation Act 1991, section 33 of the 1982 Act was at the same time amended3 to exclude agreements for the purpose of carrying out of works on land or regulating the use of land executed for the purpose of facilitating or connected with the development of the land (which it had previously covered, but which were now covered by the new section 106 of the TCPA 1990 itself).

Previous planning agreements 32.9 Planning agreements entered into under previous statutes remain binding to the same extent as before,4 notwithstanding that, from 25 October 1991 onwards, obligations fall to be entered into under the new scheme laid out in the replacement section 106 of the TCPA 1990: see Wycombe DC v Williams.5 As to the position in relation to these, see paras 10.7–10.9 and 10.13 above.

CURRENT SECTION 106: PLANNING OBLIGATIONS 32.10 Section 106 as it now stands (including some relatively minor amendments made since its introduction in October 1991) is as follows: ‘106 Planning obligations (1) Any person interested in land in the area of a local planning authority may, by agreement or otherwise, enter into an obligation (referred to in this section and sections 106A and 106C as ‘a planning obligation’), enforceable to the extent mentioned in subsection (3)— (a) restricting the development or use of the land in any specified way; 3 4

5

By the Local Government (Miscellaneous Provisions) Act 1982, s 32 and Sch 7, para 6. And fall to be dealt with under the terms of those statutes – for example under s 52 of the TCPA 1971 and the original s 106 relating to planning agreements made prior to 25 October 1991 continue to be subject to discharge and modification by the Lands Tribunal under the LPA 1925, s 84. [1995] 3 PLR 19, at p 23. The extant categories 2, 3, and 4 there referred to being the right to enforce agreements already entered into (category 2), the right to sue in respect of a breach of an agreement which had already occurred (category 3), and the right to continue proceedings already commenced under an agreement in respect of such a breach (category 4).

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32.10  Planning obligations (b) requiring specified operations or activities to be carried out in, on, under or over the land; (c) requiring the land to be used in any specified way; or (d) requiring a sum or sums to be paid to the authority (or, in a case where section 2E applies, to the Greater London Authority) on a specified date or dates or periodically. (1A) In the case of a development consent obligation, the reference to development in subsection (1)(a) includes anything that constitutes development for the purposes of the Planning Act 2008. (2) A planning obligation may— (a) be unconditional or subject to conditions; (b) impose any restriction or requirement mentioned in subsection (1) (a) to (c) either indefinitely or for such period or periods as may be specified; and (c) if it requires a sum or sums to be paid, require the payment of a specified amount or an amount determined in accordance with the instrument by which the obligation is entered into and, if it requires the payment of periodical sums, require them to be paid indefinitely or for a specified period. (3) Subject to subsection (4) a planning obligation is enforceable by the authority identified in accordance with subsection (9)(d)— (a) against the person entering into the obligation; and (b) against any person deriving title from that person. (4) The instrument by which a planning obligation is entered into may provide that a person shall not be bound by the obligation in respect of any period during which he no longer has an interest in the land. (5) A restriction or requirement imposed under a planning obligation is enforceable by injunction. (6) Without prejudice to subsection (5), if there is a breach of a requirement in a planning obligation to carry out any operations in, on, under or over the land to which the obligation relates, the authority by whom the obligation is enforceable may— (a) enter the land and carry out the operations; and (b) recover from the person or persons against whom the obligation is enforceable any expenses reasonably incurred by them in doing so. (7) Before an authority exercise their power under subsection (6)(a) they shall give not less than 21 days’ notice of their intention to do so to any person against whom the planning obligation is enforceable. (8) Any person who wilfully obstructs a person acting in the exercise of a power under subsection (6)(a) shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale. (9) A planning obligation may not be entered into except by an instrument executed as a deed which— (a) states that the obligation is a planning obligation for the purposes of this section; 802

Differences from planning conditions 32.12 (aa) if the obligation is a development consent obligation, contains a statement to that effect; (b) identifies the land in which the person entering into the obligation is interested; (c) identifies the person entering into the obligation and states what his interest in the land is; and (d) identifies the local planning authority by whom the obligation is enforceable and, in a case where section 2E applies, identifies the Mayor of London as an authority by whom the obligation is also enforceable. (10) A copy of any such instrument shall be given to the local planning authority so identified and, in a case where section 2E applies, to the Mayor of London. (11) A planning obligation shall be a local land charge and for the purposes of the Local Land Charges Act 1975 the authority by whom the obligation is enforceable shall be treated as the originating authority as respects such a charge. (12) Regulations may provide for the charging on the land of— (a) any sum or sums required to be paid under a planning obligation; and (b) any expenses recoverable by a local planning authority or the Mayor of London under sub-section (6)(b), and this section and sections 106A and 106BC shall have effect subject to any such regulations. (13) In this section “specified” means specified in the instrument by which the planning obligation is entered into and in this section and section 106A “land” has the same meaning as in the Local Land Charges Act 1975. (14) In this section and section 106A “development consent obligation” means a planning obligation entered into in connection with an application (or a proposed application) for an order granting development consent.’ 32.11 As will be seen, subsection (9) requires the obligation, in order to be effective, to be entered into by a deed which meets the requirements of that sub-section.

WHAT PLANNING OBLIGATIONS CAN COVER, DIFFERENCES FROM CONDITIONS IMPOSED ON THE GRANT OF PLANNING PERMISSION, AND THE USE AND VALUE OF THEM Planning conditions 32.12 When granting planning permission, it is open to a local planning authority to grant it subject to conditions under sections 70 and 72 of the Town and Country Planning Act 19906 if that is considered appropriate in order for 6

Section 72 falling to be read in conjunction with section 70.

803

32.13  Planning obligations it to be granted.7 Such conditions may apply not just to the land within the planning application but to any land under the control of the applicant.8 32.13 Further, so long as it is negative in form, a condition can require that development is not commenced or proceeded with either at all or beyond a certain stage unless something has occurred on other land, even where in practice that means work will need to be done (by the applicant or someone else) on land outside the applicant’s control before the development can proceed (and, indeed, even if unlikely ever to be done, which means the permission will be unable to implemented9): see Grampian Regional Council v City of Aberdeen DC.10 Such conditions are commonly called ‘Grampian conditions’ after the name of the case. However, conditions attached to a planning permission will only be valid if they relate to the application land or land under the applicant’s control or are in negative form.11 The condition itself could not require positive action on third party (including public) land and, in particular, cannot require the payment of any sum of money to anyone. An appeal may be made12 to the Secretary of State against the grant of planning permission subject to a condition. 32.14 In terms of enforcement, planning conditions are attached by the planning authority to the grant of planning permission, and thus become part of it. If the condition is a sufficiently fundamental one which is required to be complied with before development under the permission can be commenced, failure to comply with it may mean the permission has not been implemented (because what has been done has not been done under the permission) so that the entire development is in breach of planning control and liable to enforcement action by the local planning authority to remove or end it.13 32.15 Alternatively, where there has been a beach of some other condition, enforcement action may be taken by the local planning authority to require the condition to be complied with. This is done by the service either of an

7

The detailed legal test which must be met in order for conditions to be lawfully imposed is set out by the House of Lords in Newbury DC v Secretary of State for the Environment [1981] AC 578. In summary, they must: (a) be imposed for a planning purpose and not for any ulterior  purpose; (b) must fairly and reasonably relate to the development permitted and (c) not be so unreasonable that no reasonable planning authority could impose them. The Secretary of State’s policy, which he expects local authorities to follow, and which his inspectors will apply on any appeal, goes further and is set out in paragraph 206 of the ‘National Planning Policy Framework’, published by the Department for Communities and Local Government (2012). That states that planning conditions should only be imposed where they are: (1) necessary; (2) relevant to planning; (3) relevant to the development to be permitted; (4) enforceable; (5) precise; and (6) reasonable in all other respects. See also the Secretary of State’s ‘Planning Practice Guidance’, updated July 2017. 8 Section 72(1)(a). 9 See British Railways Board v Secretary of State [1994] JPL 32. 10 (1984) 47 P&CR 633. 11 See the Grampian case, above. 12 Under the TCPA 1990, s 78. 13 See FG Whitley & Sons v Secretary of State for Wales (1992) 64 P&CR 296, and also Greyfort Properties Ltd v Secretary of State for Communities and Local Government [2011] EWCA Civ 908.

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Differences from planning conditions 32.18 enforcement notice14 (against which an appeal may be made to the Secretary of State15), or a breach of condition notice16 (which can be challenged by way of judicial review)17 or by seeking an injunction.18

Planning obligations 32.16 A planning obligation is more akin to a land covenant and can be entered into by any landowner independently of the grant of any planning permission. It can also be entered into independently of the planning authority. By the wording of section 106(1), a planning obligation (or a series of obligations) can either be contained in an agreement with the local planning authority or entered into by a unilateral deed. Even though the authority are not a party to a unilateral deed, it will have full effect and be enforceable by the local planning authority named in it.19 A section 106 planning obligation can be restrictive of the use of land, or simply be negative, or positive, and can include an obligation to make payment of sums of money to the authority.20 32.17 Whilst conditions are imposed by the local planning authority on the grant of planning permission, and are subject to appeal to the Secretary of State, planning obligations are entered into voluntarily and once entered into are binding (though in so far as the local planning authority requires entry into a section 106 obligation in order to grant permission, an appeal against a failure to grant planning permission without this can be made to the Secretary of State).21 32.18 Planning obligations are enforceable by injunction, as a specified appropriate mechanism under section 106(5) (subject, of course, to the courts’ discretion in any particular case), or by direct action by the local planning authority entering onto the land under section 106(6) (as to both of which, see para 32.71 et seq below).

14 Pursuant to TCPA 1990, s 171A(1(b). 15 But which are enforceable under the criminal law once they come into force, following any unsuccessful appeal (and any appeal therefore to the High Court). 16 Under TCPA 1990, s 187A. 17 See Alfonso Dilieto v Ealing London Borough Council [2000] QB 381 (at 398). 18 Though this will generally only be granted following an enforcement or breach of condition notice having come into effect and not been complied with, and as a last option in the absence of special circumstances. 19 Which by s 106(9)(d) has to be identified in the deed. 20 Which is expressly authorised by s 106(1)(d). An obligation cannot, however, be used to require payments to anyone other than the authority, such as a parish council for example (though a restriction could be imposed under s 106(1)(a) until such a payment to others has been made). 21 A negatively worded (ie ‘Grampian’) condition preventing or limiting the development that is able to take place until a specified planning obligation has been entered into could conceivably be imposed, as a circuitous means of effectively requiring to be done that which is to be covered by the planning obligation, though the Secretary of State’s advice/policy in Planning Practice Guidance, at ID21a, is that this would only be appropriate in exceptional circumstances, in the case of more complex and strategically important development where there is clear evidence that the delivery of the development would otherwise be at serious risk and the six tests for conditions laid down by the Secretary of State (set out at footnote 7 above) are met.

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32.19  Planning obligations

Use and value of planning obligations 32.19 The overwhelming majority of planning obligations are entered into in connection with the grant of planning permission (with the obligation generally not coming into effect, because the deed specifies it is not to come into effect, until planning permission has been granted, or until the commencement or completion of development, or some specified stage in that development). This is generally done to render acceptable, by reason of the obligations, development that would otherwise be unacceptable (and which would otherwise therefore be refused permission). Planning obligations differ from planning conditions, in particular in terms of what they can cover, that they are consensual and not subject to appeal22 and in terms of the enforcement mechanisms available, as can be seen by comparing the text in paras 32.14–32.15 and 32.18 above. 32.20 Since 6 April 2010, it has by reason of regulations made under section 223 of the Planning Act 2008 (namely regulation 122(2) of the Community Infrastructure Regulations 2010)23 been unlawful for a planning obligation to which the regulations apply to ‘constitute a reason for granting planning permission for the development’ unless the obligation is: (a) necessary to make the development acceptable in planning terms; (b) directly related to the development; and (c) fairly and reasonably related in scale and kind to the development. 32.21 A planning obligation can also not ‘constitute a reason of granting planning permission’ where it provides for the funding of specified infrastructure (eg highways) where there is a CIL charging schedule laid down by the authority requiring financial contributions to the specified infrastructure be made by levy in accordance with it (see regulation 123 of the Community Infrastructure Levy Regulations 2010). A local planning authority may determine to grant planning permission subject to specified planning obligations being entered into before the permission is issued. Alternatively, a deed may be entered into prior to the grant of planning permission to come into effect only if permission is granted. In either case the obligations will generally come into play on the commencement of development or at some stage in it, but regard obviously needs to be had to the deed for its particular terms. 32.22 In practical terms, section 106 planning obligations also have the advantage of being able to be offered by the developer in advance of the grant of permission in order to show good faith and satisfy concerns of residents or other third parties who may otherwise object to planning permission being granted, to show that those concerns will be met. 32.23 Deeds containing planning obligations may be used to provide for the delivery of additional benefits to the community which may be desirable even though they may not be necessary to the grant of permission: see Derwent Holdings Ltd v Trafford Borough Council.24 22 Though an application for modification or discharge can subsequently be made, in relation to the refusal of which an appeal mechanism is available, as referred to below. 23 SI 2010/948. 24 [2011] EWCA Civ 832.

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Differences from planning conditions 32.26 The Derwent Holdings case shows that even if it is not necessary for the grant of planning permission, there is nothing objectionable in principle to a local authority and a developer entering into an agreement to secure desirable objectives. Even more obviously, there would be nothing wrong with a unilateral planning obligation, to which the local authority is not party, providing for the delivery of additional benefits as part of a scheme. 32.24 In Salford Estates (No 2) Ltd v Durham County Council,25 Judge Jeremy Richardson QC sitting as a High Court judge said as follows: ‘The Derwent case makes it plain that it is open to a planning authority to enter into a Section 106 Agreement regardless of whether it is needed to advance the planning case for a development. Providing it is entered into with a view to securing the objective of improving an area it is lawful. It is my view the approach taken by the Court of Appeal in Derwent is inherently sensible, for to decide otherwise would mean that it is only acceptable to create a Section 106 Agreement when the scheme would otherwise fail.’ 32.25 Even were such section 106 obligations wrongly taken into account by the local planning authority to the extent of granting permission only on the basis of the planning obligations being entered into, even though not necessary to make the development acceptable, this would go only to the lawfulness of that grant of permission, or of the requirement that the obligations be entered into in order for the permission to be issued, not to the lawfulness of the planning obligations themselves. If the decision to grant permission on that basis was not challenged and the obligations in the section 106 deed came into effect, the obligations themselves would be entirely lawful and enforceable, and would run with the land.26 It is the requiring of such obligations on the grant of planning permission that would be unlawful, not, when entered into, the obligations themselves. It follows that once the planning obligations have been entered into and become binding, even where the planning authority was only prepared to grant planning permission on the basis of them being entered into although unnecessary to make the development acceptable, the planning obligations themselves remain fully enforceable against the owner of the land from time to time. 32.26 The Secretary of State’s policy guidance to local authorities contained in para 203 of the ‘National Planning Policy Framework’27 states that planning obligations should only be used where it is not possible to use a planning condition. The reason for this is that, as noted in para 32.19 above, a section 106 agreement or undertaking would give rise to different enforcement mechanisms than would apply in relation to a condition, in addition to which whilst in the event of a local planning authority refusing to discharge a condition at any time in the future an appeal could be made to the Secretary of State, on an application to discharge or modify a planning obligation the decision whether to agree to such a discharge or modification would lie solely with the local authority (unless the period of 25 [2013] JPL 293. 26 See Tesco Stores Ltd v Secretary of State for the Environment [1995] 1 WLR 759; JA Pye (Oxford) Ltd v South Gloucestershire District Council [2001] EWCA Civ 450. at para 22, and also R (Millgate Developments Ltd) v Wokingham District Council [2012] JPL 258. 27 And ID21a of the ‘Planning Practice Guidance’ – see footnote 7 above.

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32.27  Planning obligations five years has passed, when an appeal against a refusal under section 106A(3) could be made to the Secretary of State under section 106B – see below), which could only be judicially reviewed on administrative law grounds and with permission of the court. 32.27 However, in R v Plymouth City Council, ex p Plymouth and South Devon Co-operative Society,28 Hoffmann LJ effectively approved29 under the new section 106 of the TCPA 1990,30 the position set out by Sir Donald Nichols V-C in Good v Epping Forest District Council31 (under predecessor legislation)32 that a section 106 agreement can as a matter of law be entered into by a local planning authority to create enforceable planning obligations even though the obligations could instead have been validly imposed by condition, notwithstanding the Secretary of State’s policy guidance to local authorities then contained in Circular 16/91 (and now contained in paragraph 203 of the National Planning Policy Framework) that planning obligations should only be used where it is not possible to use a planning condition. He pointed out that local planning authorities were given express statutory powers in section 106 and the power was not there constrained. Only if their decision to use planning obligations rather than conditions was quashed as Wednesbury unreasonable on judicial review would it not stand, as it is plainly not ultra vires the unconstrained power given by section 106 itself.

REQUIREMENTS OF SECTION 106 32.28 The requirements can be seen from section 106 itself (at para 32.10 above), but it will be useful to consider some aspects further.

‘A person interested in the land’ 32.29 In order to come within section 106 (and so for the obligation to run with the land), a planning obligation must be entered into by a person ‘interested in land’ in the area of the local planning authority (see section 106(1)). This means an interest in land in the land law sense, not simply some person such as a developer who may have a practical interest in it. 32.30 In Jones v Secretary of State for Wales,33 the Court of Appeal (in a case involving an agreement under section 52 of the TCPA 1971, the forerunner to section 106, in which the same expression was used) stated that: ‘That section only applies to an agreement by a local planning authority with a “… person interested in the land in their area …”. It does not apply here because these developers are not persons “interested” in the land. They have no legal interest in it as owners or tenants. They are only prospective developers.’ 28 [1993] 67 P&CR 78. 29 Ibid, at p 90. 30 Ie that introduced by s 12(1) of the Planning and Compensation Act 1991, which came into force with effect from 25 October 1991. 31 [1992] 3 PLR 103. 32 A decision which was itself subsequently upheld by the Court of Appeal at [1994] 1 WLR 376. 33 (1974) 28 P&CR 280.

808

Requirements of section 106 32.35 32.31 In Pennine Raceway Ltd v Kirklees Metropolitan Borough Council34 Eveleigh LJ, in the context of a different section of the TCPA 1971 (section 164), and without considering the Jones case, took a broad meaning of the phrase ‘interested in land’ (as compared to an ‘interest in land’), so as to include (within the right to compensation there under consideration) those with rights simply to use the land. 32.32 However, Southampton City Council v Hallyard Ltd35 concerned the new section 106 of the 1990 Act itself and Morgan J considered a proprietary interest was probably required (though again this was not required to be decided for the purposes of the case, so was obiter). Having considered the Pennine Raceway Ltd case, he gave six reasons for coming to this conclusion despite the views of Eveleigh LJ in relation to this phrase in another section of the 1971 Act, having regard to the wording of the new section 106 of the TCPA 1990 as a whole, including other subsections pointing in favour of such an interpretation (see para 76 of the judgment). Obviously, this goes beyond just an owner of the land having the capacity to enter into a section 106 obligation, however, and would also include those with, for example, an option to purchase.36 32.33 If a person enters by deed, or otherwise, into an obligation relating to the land when he does not have an interest in it, the obligation may, of course, still be binding on, and enforceable against, that person personally, as a purely contractual obligation. However, where the person does not have control over the land, it will plainly not be able to be enforced by injunction, unless and until he does have such control. Not being within the requirements of section 106, it will not be able to be enforced against successors in title under the section. 32.34 Where development sites have multiple land interests, some local planning authorities require all interests in all parts of the land to be bound by the section 106 agreement/undertaking. This can be problematic for commercial reasons. However, it can be unnecessary to bind all of the land – for example, a part of the site which is incapable of independent development, or on which development would not give rise to the matters the section 106 obligations are intended to address, or where the other parts of the land which are bound are so bound in sufficient terms that they will in practice deliver everything that needs to be provided.

‘Restricting the development or use of the land in any specified way’ 32.35 In order to be a planning obligation within section 106, the obligation must be one within section 106(1)(a) to (d).37 Subsections (1)(b) to (c) are self-evident. Likewise in relation to ‘restricting the development … of the land’ under subsection (1)(a).

34 35 36 37

[1983] QB 382. [2009] 1 P&CR 5. Although not, of course, any prior or superior interests – see para 32.59 below. Set out at para 32.10 above.

809

32.36  Planning obligations 32.36 The question of whether an obligation is under subsection (a), one ‘restricting the … use of the land in any specified way’, was considered by the Court of Appeal in R (Khodari) v Royal Borough of Kensington and Chelsea Council.38 The facts were as follows. The Council’s local development plan document specified that, because of pressure on parking in the borough, which was subject to a Controlled Parking Zone requiring residents in the area to hold a parking permit in order to be able to park on the highway, agreements for occupation to be parking permit free would be required for all new additional residential development. The purported section 106 deed put forward on the application for planning permission therefore required that: (a) there be a covenant not to apply for parking permits for the additional units, nor knowingly to permit any owner or occupier of the permit free units to do so; and to surrender any permit issued in respect of those units; (b) prospective owners or occupiers of the additional units be notified that they would not be entitled to apply for parking permits; and (c) covenant be included in any lease of the additional units preventing the lessee from applying for a parking permit and entitling the Council to enforce that obligation as a third party. In addition, there was an obligation to pay a one-off ‘monitoring fee’ of £500 on execution of the agreement. The Court of Appeal held that the obligations were not ones which restricted the use of the land itself, and therefore were not capable of being planning obligations under section 106(1). 32.37 However, having been entered into with a London council, the court held that they were enforceable as covenants under section 16 of the Greater London Council (General Powers) Act 1974 (having been made, ‘in connection with the land’ (which was all that is there required), as to which, see para 28.27 above). Aside from this, one way for a local authority to work round such a situation in relation to a controlled parking zone, where the development is, for example, just on a small yard or road, was referred to by the court as being for the authority to make sure the yard or road not listed as a yard or street forming part of the controlled parking zone in the order creating the zone.39 Obviously, however, if the development takes place in a location where there are other residential properties, those properties would also be affected. Otherwise, the court said it may be right that local authorities outside London may be left without the ability to permit the creation of new residential units on terms that no residents parking permits would be issued in relation to those units, in the absence of specific statutory provision. 32.38 However, a covenant not to allow occupation of land by a person who has certain characteristics (such as having a parking permit) may be a way round the problem. This could then be said to be restrictive of the use of the land in that it would prevent occupation by anyone else.

38 [2018] 1 WLR 584. 39 See R (AS Property Investments Ltd) v Hounslow London Borough Council [2008] EWHC 1631 (Admin), and Khodari (above) at para 39.

810

Planning obligations requiring the transfer of land 32.42 32.39 In Blumenthal v Church Commissioners for England,40 the Court of Appeal held that a covenant that part of a building be occupied by a particular entity (the Royal Society of Literature) amounted, in its context, to a restrictive covenant not to let the premises to anyone else, which the Upper Tribunal would have jurisdiction to discharge as it was a legally enforceable covenant restrictive of the user of the land.41 32.40 In Cosmichome Ltd v Southampton City Council,42 a covenant restricting the use of the land to the BBC or someone exercising the BBC’s franchise (of value to the covenantee council in having a national institution based in its area) was regarded as restrictive of the use of the land.43 See also Re Quarterly’s Application at para 20.87 above. Even more clearly, a planning condition (an alternative to the use of a section 106 obligation) can be imposed requiring occupation by a person with specific qualifications, such as being a person employed locally in agriculture (see eg Alderson v Secretary of State44). Occupation only by a person not holding a parking permit would seem to be a similar requirement.

MANDATORY REQUIREMENTS OF SECTION 106(9) 32.41 The interest which the person entering into the section 106 planning obligation(s) has in the land must be stated in the deed creating it (section 106(9)). This is mandatory and if it is not so stated, the obligations will not be planning obligations and section 106 will not apply: see paras 77 and 78 of Southampton City Council v Hallyard.45 It would seem to follow that the other requirements in section 106(9), which are covered by the same statutory wording, are similarly mandatory, and a failure to comply with them will mean the obligations are not planning obligations, are not covered by section 106, are not enforceable under it, and do not run with the land. Those other requirements for the deed can be seen from section 106(9) itself (at para 32.10 above). An agreement varying the terms of a planning obligation is also required to be made by deed (section 106A(2)).

PLANNING OBLIGATIONS REQUIRING THE TRANSFER OF LAND 32.42 Agreements between developers and local planning authorities said to be made under section 106 sometimes contain obligations on the developer 40 [2005] 2 P&CR 20. 41 Cf Re Milius’s Application (1995) 70 P&CR 427 (where it was doubted by the Lands Tribunal whether a covenant preventing disposal of premises without the written consent of the covenantee council, such consent not to be withheld where the conveyance or grant was to a person who had been resident in a particular area, was restrictive of the user of the property), and see para 1.11 et seq above. 42 [2013] 1 WLR 2436. 43 Though the covenant did not benefit land of the council, so was held not to be enforceable. There is no such requirement, of course, in the case of a planning obligation. In relation to this case, see, further, para 1.48 above. 44 (1999) The Times, 5 July. 45 [2009] 1 P&CR 5.

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32.43  Planning obligations to transfer land to a third party subject to restrictions on the use of the land thereafter (for example, that it is only to be used for affordable housing), such transfer to be made in certain eventualities such as the implementation of the planning permission the developer is seeking or when some other stage of development under it is reached. Most commonly this will involve a transfer of land to a housing association – often with the precise association not yet identified at the section 106 stage – on the basis that the land will be used to provide affordable housing (to meet the requirements of local planning authorities requiring new developments to result in a certain amount of affordable housing). 32.43 In Wimpey Homes Holdings Ltd v Secretary of State for the Environment and Winchester City Council,46 the High Court held that a deed containing an undertaking, subject to the grant of planning permission, to transfer specified land to a council for use as open space did not come within the ambit of section 106 because it did not ‘restrict the development or use of the land in a specified way’ so as to fall within section 106(1)(a), as it was only a first step towards imposing a restriction on the land.47 32.44 However, in R v South Northamptonshire District Council, ex p Crest Homes plc,48 the court considered an agreement purportedly made under section 106 to be within the ambit of section 106 where land the subject of it was not to be developed until the necessary legal arrangements had been entered into to effect a transfer of particular land referred to in it. This was held to amount to a restriction on the development or use of the land within section 106(1)(a). Accordingly, an agreement or undertaking simply requiring the transfer of specified land would not be within section 106, and, in order to be within, it needs to be in the form used in the Crest Homes case, namely not to develop until such a transfer was in hand or had taken place. 32.45 The decision in Crest Homes has been criticised,49 but the wording of the section 106 agreement (as set out at p 64 of the report) meant that the use of the land was restricted until the transfer arrangement had been put in place (although the alternative reasoning that the land was required to be used in a specified way under section 106(1)(c) seems more doubtful). 32.46 However, even if it was not within the ambit of section 106, an agreement to transfer land for a stated consideration on specified terms would, if sufficiently certain, be binding on the parties in the ordinary way without reference to section 106, so long as the requirements of section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 are fulfilled.50 These requirements are, of course, that the agreement must be made in writing incorporating all the terms which the parties have expressly agreed in one

46 [1993] JPL 919. 47 It did not, of course, fall within any of the other parts of s 106(1)(b)-(d), set out at para 32.10 above. 48 [1994] 3 PLR 47. 49 For example, in the commentary at [2000] JPL 203. 50 Though if not being enforceable under s 106 in the absence of any consideration being able to be spelled out, the remedy of specific performance will not generally be available since equity will not assist a mere volunteer: see, eg Canon v Hartley [1949] Ch 213.

812

Planning obligations requiring the transfer of land 32.49 document,51 by being set out there or by reference to some other document,52 and the document incorporating the terms53 must be ‘signed by or on behalf of each party to the contract’.54 32.47 Even if an agreement to transfer land is within the ambit of section 106 (as in the Crest Homes case, above), Mr David Mackie QC sitting as a deputy High Court judge in Jelson Ltd v Derby City Council55 held that the requirements of section 2 of the 1989 Act must still be fulfilled in order for the agreement to transfer to be binding. In that case, at the time the section 106 agreement was entered into providing for a transfer of land to a housing association to be effected on certain terms in the future, the housing association was unidentified and the section 106 agreement was not therefore signed on behalf of the association that subsequently became the intended transferee of that land. It was held by the Deputy Judge that the agreement to transfer was not binding because the association had not signed it as required by section 2 of the 1989 Act. 32.48 However, even assuming an agreement between X (developer) and Y (local authority) to transfer the land in the future to a presently unidentified housing association (Z) amounts to the disposition by X of an interest in the land so as to be within section 2 of the 1989 Act (notwithstanding the transferee is not identified at that stage), the parties to that contract are X and Y, who have signed it, and do not include Z. Accordingly, the housing association (Z)’s signature would not seem to be required under section 2 as only the signature of the parties to the agreement are required and it is not a party to that contract but merely a transferee under the separate, subsequent, contract or transfer that X is required to enter into. Accordingly, the decision in Jelson appears to be wrong, to this extent at least. 32.49 It was for this reason not followed by Neuberger J (as he then was) in RG Kensington Management Co Ltd v Hutchinson IDH Ltd.56 Waller and Carnwath LJJ also doubted the correctness of this part of the Jelson decision in Nweze v Nwok.57 In Milebush Properties Ltd v Tameside Metropolitan Borough Council and Another,58 Arnold J agreed with Neuberger J in the Kensington case. He also said:59 ‘I would go further. It seems to me that it would substantially frustrate the statutory scheme contained in section 106 of the 1990 Act to interpret section 2 of the 1989 Act as invalidating section 106 agreements which benefit third parties such as Milebush. I cannot believe that that can have been the legislative intention.’

51 Or, where contracts are exchanged, in each: Law of Property (Miscellaneous Provisions) Act 1989, s 2(1). 52 Ibid, s 2(2). 53 Or, where contracts are exchanged, one of them – ibid, s 2(3). 54 Ibid, s 2(3). 55 [2000] JPL 203. 56 [2003] 2 P&CR 13, see especially paras 57 and 58. 57 [2004] 2 P&CR 33, at paras 21 and 35. 58 [2010] EWHC 1022. 59 At para 66.

813

32.50  Planning obligations 32.50 In relation to agreements (under section 106 or otherwise) made on or after 11 May 2000, a provision requiring the other party to transfer land to someone else, such as a housing association, would, if valid, also be likely to be enforceable by the third party under section 2 of the Contracts (Rights of Third Parties) Act 1999.60 32.51 There is some doubt as to whether this would include enforcement by an order for specific performance on the third party’s application alone, though, because whilst section 1(5) of the Act states that ‘there shall be available to the third party any remedy that would have been available to him in an action for breach of contract if he had been a party to the contract (and the rules relating to damages, injunctions, specific performance and other relief shall apply accordingly)’, where the third party has provided no consideration specific performance will generally not be available because equity will not assist a volunteer (even where the promise was made by deed to which the person was party).61 However, where consideration has been provided by the contracting promisee it seems unlikely this was Parliament’s intention, the general intention being to give the third party the ability to fully enforce the contract like the promisee62 and it is considered that effect may be given by the courts to this intention if and when the matter comes before them notwithstanding the technical wording used. Even if not, a remedy in damages would be available to the third party.63 It is to be borne in mind, however, that whenever a section 106 obligation to transfer land is contained in a unilateral undertaking or agreement to which he is not a party, the third party to whom it is to be transferred cannot be compelled to accept a transfer of the land,64 and any technical transfer of the land could be revoked by such a party (which it may in practice be if the terms were to be onerous, or it does not fit its current requirements and it had not agreed that it should be transferred to it).

SEVERABILITY OF TERMS 32.52 In a part of the decision in Jelson which has not met with criticism, it was also decided that a ‘blue pencil’ test can be applied to planning obligation deeds, so that if it contains unenforceable parts, for example in relation to a transfer of certain land because section 2 of the 1989 has not been complied with, other planning obligations contained within it, for example restricting some use of other parts of the land, can still be enforced.65

60 In relation to which, see above, para 3.9 et seq. 61 See Cannon v Hartley [1949] Ch 213, referred to at para 3.12 above. 62 And see, eg the comments of Lord Irvine of Lairg LC in introducing the bill for second reading: ‘the noble and learned Lord, Lord Steyn, said that, “the case for recognising a contract for the benefit of a third party is simple and straightforward. The autonomy of the will of the parties should be respected. The law of contract should give effect to the reasonable expectations of contracting parties … there is no doctrinal, logical or policy reason why the law should deny effectiveness to a contract for the benefit of a third party where that is the expressed intention of the parties”. The Bill will give effect to that simple and straightforward principle’. 63 See again Cannon v Hartley [1949] Ch 213, referred to at footnote 62 above. 64 Reference was made to this in the Wimpey Homes case at p 920, though it was not actually decided there, as it did not need to be. 65 [2000] JPL 203, at p 215.

814

Entry by LAs as landowners into s 106 obligations 32.55

ENTRY BY LOCAL AUTHORITIES AS LANDOWNERS INTO SECTION 106 PLANNING OBLIGATIONS 32.53 There is nothing to prevent a local authority with an interest in land in the area for which it is the planning authority from entering into a planning obligation under section 106 in relation to that land, identifying as the enforcing authority under section 106(9) a different tier planning authority, for example, in the case of a district council, the county council for the area where the land is. Where the district council wants to develop its land, though it may be the one to which determination of planning applications in the area falls, since the county council is also a planning authority for the area (notwithstanding that it deals with different types of applications), there would be nothing to prevent it from being identified as the enforcing authority.66 32.54 Applications for planning permission relating to council land have by statute to be made to the relevant council in its capacity as local planning authority. In the case of a district council seeking permission to develop its land as landowner, the application will generally be made to the same council (ie itself) acting in a different capacity (namely as local planning authority). A different committee or person within the council will be responsible for making the decision to that which holds the land and makes the application, and must determine it independently on normal planning principles taking into account the section 106 obligations that will apply if permission is granted. A similar approach might potentially be able to be taken in relation to enforcement, and there may not be any absolute reason why the same council as local planning authority could not be responsible for the enforcement of planning obligations entered into by that council as landowner under section 106(9), making decisions as to that on the same independent basis. Unilateral obligations entered into by the authority (as landowner) would avoid the need for an agreement to be made with itself (as local planning authority) as such. In Rye v Rye67 it was held (per Lords Simonds, Reid and Denning) that a person could not grant a lease to himself, and (per Lord Radcliffe at p 512) that there was nothing in the Law of Property Act 1925 that makes it possible for a man to enforce contractual obligations against himself. However, in relation to tenancies, which the case concerned, the doctrine of merger would come into play to prevent a lease being held by the person with the interest which grants it. In contrast, in the TCPA 1990 there is arguably a provision allowing for a local authority entering into a section 106 undertaking to be able to enforce against itself by naming itself as the enforcing authority under section 106(9)(d). 32.55 However, in The Mayor and Burgesses of the Waltham Forest London Borough Council v Oakmesh Ltd,68 Mr Bernard Livesey QC sitting as a Deputy High Court judge stated in relation to a local authority,69 even where it would be standing in the separate capacity of highway authority, in being subject to the section 106 obligations, to that of local planning authority in relation to

66 Although if the obligations solely concern district functions (for example, open space/ recreational functions within its remit), the county council may in practice have little interest in enforcing compliance. 67 [1962] AC 496. 68 [2009] EWHC 1688 (ChD). 69 Though without reasoning (and after a sentence slightly mis-stating the effects of s 106(3)).

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32.56  Planning obligations enforcement proceedings, ‘Clearly there is no way that the Claimant can take any enforcement proceedings against itself. That would be a nonsense’. Certainly, in practice it would appear odd in the extreme for an authority to be involved in taking enforcement action against itself, and even if technically possible, it may be more likely to lay itself open to judicial review in relation to its determinations than if the enforcement power lay in the hands of a separate, independent, authority (such as the county council where there are two-tier authorities and the district council is the landowner). Unlike in the case of planning applications, statute does not specify that the authority must itself determine the matter, and it could be argued to be wrong on common law principles for an authority to make itself judge in its own cause. 32.56 Where, however, following planning permission being granted, the land is going to be transferred by the Council to a third party prior to development, this problem would appear in practice to fall away, as in practice the section 106 obligations will be enforceable by the council (as local planning authority) against the third party to whom it is transferred.

ENFORCEABILITY AGAINST ANY PERSON ‘DERIVING TITLE’ FROM THE PERSON ENTERING INTO THE PLANNING OBLIGATION 32.57 Section 106(3)70 provides that (subject to subsection (4)), a planning obligation is enforceable against the person entering into the planning obligation and any person deriving title from that person. 32.58 In Waltham Forest LBC v Oakmesh Ltd (above), land covered by a section 106 agreement was transferred by Oakmesh (which had entered into the agreement) to a successor in title who agreed to dedicate it as a highway and transferred it to the highway authority to maintain as a highway. That meant that under section 263(2) of the Highways Act 1980 title vested in the highway authority. In holding that the highway authority did not ‘derive title’ from Oakmesh, Mr Bernard Livesey QC sitting as a deputy High Court judge referred to the fact that only the surface of the highway vested in the highway authority, and that it so vested in the highway authority pursuant to statute. He stated, ‘I have not been shown any authority which compels me to conclude that a highway authority must be regarded as “deriving title” from a prior owner’, and held that the highway authority did not therefore derive title from Oakmesh (and the transferee) within the meaning of section 106 of the TCPA 1990. 32.59 Obviously, subsequent lessees of the person entering into the planning obligation would be bound, as would anyone else deriving title from that person. However, whilst a leaseholder may enter into a planning obligation, as it is only persons ‘deriving title’ from the person entering into the obligation who are covered, a planning obligation entered into by a lessee will not bind the landlord unless he is party to it, since the landlord does not derive title from the leaseholder. If therefore the lease ends (by effluxion of time, forfeiture,

70

816

Set out at para 32.10 above.

Enforceability against any person ‘deriving title’ etc 32.63 surrender, or otherwise), the obligations will become unenforceable against the landowner and be enforceable, if at all, only personally against the person who entered into it. Similarly, mortgagees existing at the time the planning obligation is entered into will not be bound unless they have agreed to it, so will not be bound by it even if they later take possession. Local planning authorities therefore need to carefully investigate the title to the land and subsisting interests in relation to it in order to be satisfied that it will be enforceable. 32.60 In relation to squatters, since (as with the previous version of section 106 of the 1990 Act) section 106(3) of the TCPA 1990 limits enforceability ‘against persons deriving title under’ the covenantor, as indicated at para 10.13(7) above in relation to the previous provision, this would appear on the face of it not to include a person acquiring a title by adverse possession as against the covenantor. Such a person’s title could be said technically not to be derived from the dispossessed owner but from the relevant Limitation Act. 32.61 As previously indicated,71 such a person’s position was described by Lord Radcliffe in Fairweather v St Marylebone Property Co Ltd72 as follows: ‘He is not at any stage of his possession a successor to the title of the man he has dispossessed. He comes in and remains in always by right of possession, which in due course becomes incapable of disturbance as time exhausts the one or more periods allowed by statute for successful intervention. His title, therefore, is never derived through but arises always in spite of the dispossessed owner.’ On this basis, enforcement against a squatter would appear on the face of it not to be possible under section 106.73 32.62 However, this seems both contrary to common sense and repugnant, in that a person who acquires title by squatting would be in a better position than someone who acquires the land normally and for due consideration, and such a conclusion would enable such a person to ignore planning obligations entered into pursuant to statute for the public benefit. Having regard to the purpose of the legislature, and the anti-repugnance rule of statutory construction,74 it may well be that the higher courts would consider Parliament’s intention to be that the words should have a wider application than the technical and general one described in Fairweather which would render those obtaining rights over the land by reason of adverse possession immune from the enforcement of planning obligations relating to the land. 32.63 Given that anyone entering into section 106 obligations would be likely to be doing so in order to obtain planning permission to develop the land he had title to and was anxious not to lose, and that it would only be if the local planning authority sought to take enforcement action after the expiry of the 12-year period after which a squatter’s title would be acquired, the situation referred to would seem unlikely to arise very often, if at all, in practice.

71 72 73 74

At para 10.13(7) above. [1962] EGD 354 (HL). Cf the position in relation to a restrictive covenant, at para 9.6 above. As to which, see, eg Benion on Statutory Interpretation, 6th edn, (2013, LexisNexis UK), Code S158 (p 430).

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32.64  Planning obligations

REGISTRATION REQUIREMENTS 32.64 A section 106 planning obligation is registrable as a local land charge under the Local Land Charges Act 1975 (section 106(11)).75 32.65 If not so registered under section 10 of the Land Charges Act 1975, this has no effect on its enforceability but a purchaser of the burdened land may be entitled to compensation if he suffers loss ‘in consequence’ of non-registration.76 32.66 As planning obligations under the present section 106 (as substituted by section 12(1) of the Planning and Compensation Act 1991 with effect from 25 October 1991) appear to have statutory force as legal interests, even where unregistered, they will be binding on all subsequent owners of the burdened land, including a purchaser for value without notice (although the compensation provisions will apply).

INTERACTION BETWEEN SECTION 106 PLANNING OBLIGATIONS AND THE LAW OF CONTRACT 32.67 If a person enters by deed, or otherwise, into an obligation relating to land, which is not within the ambit of section 106 because it does not comply with the formalities required by the section or for some other reason, so that it is not a ‘planning obligation’, the special enforcement and other provisions of that section will not apply, and the obligations will not run with the land under it. 32.68 However, whilst the terms will be able to be enforced against the original covenantor under the ordinary law of contract77 where the covenantor does not have control over the land, the covenant will plainly not be able to be enforced by injunction, unless and until he does have such control. The contractual provisions will not be able to be enforced against successors in title unless this is possible under the ordinary law relating to restrictive covenants. The fact that section 106 obligations are also, underlying their status by reason of section 106, effectively, contractual promises also means that rules as to contractual interpretation can be expected to be applied to obligations entered into under the statute (though obviously such interpretation will fall to be made within the statutory context).

75 See above, para 10.23 et seq. 76 See s 10(1), and see also above, para 10.27 et seq. If the purchaser was aware of the covenant at the time when he entered into the contract to purchase, then it would appear that he could not claim to have suffered loss ‘in consequence’ of the non-registration since the non-registration will not have misled him as to the existence of the covenant. 77 Subject of course to any particular statutory requirements applicable there – for example, the requirements imposed by s 2 of the Law of Property (Miscellaneous Provisions) Act 1989 in the case of agreements for the disposition of interests in land (as referred to above). Further, whilst s 106 obligations, being made by deed, do not require consideration, in the absence of any consideration, equity will not assist a mere volunteer, the remedy of specific performance will not generally be available in the absence of any such consideration: see, eg Canon v Hartley, footnote 50 above.

818

Enforcement of planning obligations 32.71

INTERACTION BETWEEN SECTION 106 PLANNING OBLIGATIONS AND EXISTING RESTRICTIVE COVENANTS 32.69 A local planning authority may grant planning permission for development which is inconsistent with the terms of an existing restrictive covenant. The permission in no way overrides the covenant, which remains in effect, and may prevent the permitted development from actually being carried out.78 Similarly, the fact that planning obligations have been entered into, cannot discharge any restrictive covenants relating to the land the subject of the development.

ENFORCEMENT OF PLANNING OBLIGATIONS I:  By the identified local planning authority only 32.70 Planning obligations can only be enforced by the local planning authority identified in the deed pursuant to section 106(9)(d). It is a matter for the exercise of that authority’s discretion whether and to what extent to enforce such obligations, subject to the supervisory jurisdiction of the Administrative Court. To the extent that it refuses to do so, the remedy of an interested third party seeking enforcement would be to judicially review the decision on public law grounds (eg on the basis the decision not to enforce is so unreasonable as to amount to Wednesbury unreasonableness, being so unreasonable that no reasonable authority properly directing itself could so decide): see Milebush Properties Ltd v Tameside Metropolitan Borough Council.79

II:  Remedies available to the local planning authority under section 106 (1)  Injunction (section 106(5)) 32.71 An injunction will normally be granted where there has been a substantial breach of a planning obligation unless the local planning authority has acted in a way which justifies withholding relief on ordinary equitable principles: see R (Millgate Developments Limited) v Wokingham Borough Council.80 At para 23, Lord Dyson MR, for the court, held that: ‘in the absence of circumstances that would on normal equitable principles lead to the denial of an injunction, where there has been a substantial breach of a planning obligation under section 106, the discretion conferred

78 And the local authority by reason of having granted planning permission will not be taken to have consented as the owner of benefited land to the release of the covenant: see para 21.15 above. 79 [2012] 1 P&CR 3. 80 [2012] JPL 258, at paras 20 and 23.

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32.72  Planning obligations by section 106(5) should normally be exercised in favour of the grant of an injunction. If a person wishes to contend that a planning obligation no longer serves a planning purpose, then it should seek to discharge or modify the obligation under section 106A or 106B. That is the route by which Parliament decided that a person might be relieved from its planning obligation.’

(2) Entry upon the land and recovery of costs incurred (section 106(6)) 32.72

Section 106(6) provides that:

‘Without prejudice to subsection (5), if there is a breach of a requirement in a planning obligation to carry out any operations in, on, under or over the land to which the obligation relates, the authority by whom the obligation is enforceable may— (a) enter the land and carry out the operations; and (b) recover from the person or persons against whom the obligation is enforceable any expenses reasonably incurred by them in doing so.’ 32.73 Before an authority exercise their power under subsection (6)(a) they must give at least 21 days’ notice of their intention to do so to any person against whom the planning obligation is enforceable (section 106(7)). 32.74 By section 106(8), any person who wilfully obstructs a person acting in the exercise of a power under subsection (6)(a) is guilty of an offence and liable to a fine not exceeding level 3 on the standard scale.

MODIFICATION AND DISCHARGE OF PLANNING OBLIGATIONS 32.75 Section 84 of the Law of Property Act 1925 does not apply to planning obligations made under section 106 of the TCPA 1990, and the Upper Tribunal has no jurisdiction to discharge or modify such obligations (section 106(10)). 32.76 Instead, the separate rules for the discharge or modification of planning obligations set out in sections 106A and 106B apply: (a) under section 106A(1)(a), a planning obligation may be modified or discharged by agreement between the local planning authority and all the parties against whom it is enforceable. Such an agreement can only be made by deed81 but may be made at any time;82

81 Section 106A(2). 82 In R Batchelor Enterprises Ltd) v North Dorset DC [2004] JPL 1222, Sullivan J granted judicial review against a refusal by a local planning authority to modify a s 106 agreement which was just three and a half years old entered into in connection with a housing development following both the developer in seeking, and the council in granting, the permission failing to appreciate that a forecourt which was to be built on under it was, in fact, in part a public highway, with the result that another planning permission had to be sought for the buildings to go instead on part of the area which had been agreed to be maintained as green open space under the original s 106 agreement.

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Modification and discharge of planning obligations 32.80 (b) under section 106A(1)(b), a person against whom a planning obligation is enforceable may after the expiry of five years make a formal application for the modification or discharge of a planning obligation.83

Powers of local planning authority on an application to modify or discharge 32.77 Section 106A(6) provides that on such an application, the local planning authority may determine: ‘(a) that the planning obligation shall continue to have effect without modification; (b) if the obligation no longer serves a useful purpose, that it shall be discharged; or (c) if the obligation continues to serve a useful purpose, but would serve that purpose equally well if it had effect subject to the modifications specified in the application, that it shall have effect subject to those modifications.’ 32.78 ‘Useful purpose’ has been taken to mean a ‘useful planning purpose’,84 but this is not limited to the purpose for which the planning obligations were originally entered into or to being in relation to the development in relation to which this was done.85 Accordingly, even if the original purpose can be shown no longer to apply, any other useful planning purpose there may be at the time the application is determined will suffice to defeat an application under the section.86 32.79 In R (Renaissance Habitat Ltd) v West Berkshire District Council,87 Ouseley J indicated88 that, notwithstanding the decision in R (Batchelor Enterprises Ltd) v North Dorset District Council89 (which followed a concession by the parties) it may be open to debate in a future case whether as a matter of principle ‘useful purpose’ was limited to a useful planning purpose, the word ‘planning’ not appearing in the statute itself. 32.80 It is considered that ‘useful purpose’ may not be limited just to a planning purpose in an appropriate case. The phrase ‘no longer serves a useful

83 Section 106(3) and the Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992, SI 1992/2832, as amended. 84 See R (on the application of Batchelor Enterprises Ltd) v North Dorset District Council [2003] EWHC 3006 (Admin). 85 R (Renaissance Habitat Ltd) v West Berkshire District Council [2011] JPL 1209. See also R (Garden & Leisure Group Ltdv North Somerset District Council [2004] 1 P&CR 39, at para 46 (per Richards J: ‘as it seems to me, section 106A(5) does not require that the obligation  continues to serve its original purpose. What matters is whether the obligation continues to serve a useful purpose’. 86 So that in Renaissance Habitat, an obligation to pay sums of money towards infrastructure costs relating to a development did not fall to be discharged by reason of no longer being required for this purpose as they could and would now be applied by the local authority for the benefit of the area in which new residents would live, which was a useful planning purpose. 87 [2011] JPL 1209. 88 Ibid, at para 11. 89 [2003] EWHC 3006 (Admin).

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32.81  Planning obligations purpose’ implies there was such a purpose in the first place. It could in some cases be that the purpose of a unilateral obligation provided in a section 106 deed was not what would ordinarily be regarded as a proper planning purpose (for example, the protection of purely private views which would not be regarded as a proper planning purpose), but was provided to make a development more attractive to neighbours and to satisfy their concerns by showing the developer was a neighbourly one. This could be done even though in such circumstances the section 106 obligation could not on determining the planning application by the planning authority be the reason for granting planning permission.90 In such a case, given that it was the reason for entry into the obligation in the first place, why should it not be regarded as continuing to serve a useful purpose if it continues to serve that original purpose? The statute is not expressly limited to proper planning purposes and it would not seem unreasonable, even in the public law context, to decide it still serves a ‘useful purpose’ if it has been entered into on this basis.91 The modification or discharge applied for must either be allowed or refused. The authority cannot make different or lesser modifications than the whole of what is sought.92

Making an application for discharge or modification 32.81 Formal requirements for such applications, including advertisement thereof, are set out in detail the Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992 as amended (‘the Obligations Regulations’).93 32.82 The application must be made on a form provided by the appropriate authority, which by regulation 3(1) requires the following information to be provided: ‘(a) the name and address of the applicant; (b) the address or location of the land to which the application relates and the nature of the applicant’s interest in that land; (c) sufficient information to enable the authority to identify the planning obligation which the applicant wishes to have modified or discharged; (d) the applicant’s reasons for applying for the modification or discharge of that obligation; and (e) such other information as the authority consider necessary to enable them to determine the application.’ By regulation 3(2) the application must also include a map identifying the land to which the obligation relates, and ‘such other information as the applicant considers relevant to the determination of the application’.

90 Because of the CIL Regulations – see para 32.20 above. Where entered into the obligation itself would nonetheless be perfectly lawful and binding: see above,para 32.23 et seq. 91 Consistent with this, Richards J, at para 46 of R (Garden & Leisure Group Ltd v North Somerset District Council [2004] 1 P&CR 39, referred obiter on an application for modification under s 106A(6) to the need for the s 106 obligation simply to continue to serve ‘a useful purpose’ (although this was in the context of a case which in fact involved a planning purpose). 92 R (Garden and Leisure Group Limited) v North Somerset Council [2004] 1 P&CR 39. 93 SI 1992/2832, as amended.

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Modification and discharge of planning obligations 32.87 32.83 By regulation 4 the applicant must give notice of the application to any other person against whom, on the day 21 days before the date of the application, the planning obligation is enforceable and whose name and address is known to the applicant following reasonable steps being taken to ascertain this information. Where the names and addresses of all such persons are not then known, the applicant must during the 21-day period publish notice of the application in a local newspaper in the form set out in Part 1 of the Schedule to the Regulations. The notices must invite representations to be made to the local planning authority within 21 days of the date on which they are served or published. The application must be accompanied by a certificate, in the form set out in Part 2 of the Schedule, certifying that these requirements have been complied with. 32.84 Following receipt, the local planning authority must also publicise the application as set out in regulation 5. This is done by either posting up a site notice or serving notice on the owners and occupiers of adjoining land (allowing, in either case, 21 days for representations to be made) or placing a newspaper advertisement (allowing 14 days from publication for representations). There is a prescribed form for such notices.

Time for determination of the application by the relevant planning authority 32.85 By regulation 6(1) the application must not be determined until the time for representations set out in regulations 4 and 5 has expired.94 It must then be determined within: (a) eight weeks from the date on which the application is received; or (b) except where the applicant has already given notice of appeal to the Secretary of State, such extended period as may be agreed upon in writing by the applicant and the authority (regulation 6(2)). 32.86 When a local planning authority determine that a planning obligation shall continue to have effect without modification, the notice of that decision is required by regulation 6(3) to state, clearly and precisely, the authority’s full reasons for their decision, and to give notification of the right of appeal.

Appeals 32.87 In the event of the local planning authority failing to give notice of its determination within the period prescribed by regulation 6(2) or refusing the application, the applicant may appeal to the Secretary of State under section 106B.

94

Regulation 6(1).

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32.88  Planning obligations 32.88 By regulation 7(1) the appeal must be made within six months of (a) the date of the notice of the decision giving rise to the appeal; or (b) in the case of non-determination, the expiry of the period of eight weeks allowed to the authority for such determination, or within such longer period as the Secretary of State may, at any time, allow. 32.89

An appeal under section 106B must:

‘(a) be made on a form obtained from the Secretary of State; (b) include the information specified in the form; and (c) be accompanied by a copy of— (i) the application made to the local planning authority which has occasioned the appeal; (ii) the certificate which accompanied the application in accordance with regulation 4(5); (iii) the instrument by which the planning obligation which is the subject of the application was entered into; (iv) any correspondence with the authority relating to the application; and (v) the notice of decision, if any.95 32.90 Under regulation 7(3), an appellant shall send a copy of the completed notice of appeal form to the local planning authority at the same time as the appeal is made to the Secretary of State. The Secretary of State has the same powers as the authority on the application, and the appeal will ordinarily be determined by a planning inspector appointed to action his behalf.96 The appellant and the authority have a statutory right to be heard if they wish (section 106B(5)), so the Secretary of State or his inspector cannot insist on determination purely by written representations (unlike in planning appeals where this is considered appropriate).

INTERPRETATION OF PLANNING OBLIGATIONS 32.91 Agreements containing obligations under section 106 of the 1990 Act are nonetheless also contractual obligations, though those obligations have a special status and special provisions apply to them in relation to registration (in order for them to run with the land), enforcement, discharge and modification, etc by reason of section 106. They are very similar in their basic nature to land covenants under the ordinary law.97 The same rules of interpretation can generally be applied to them therefore, although, of course, the statutory framework must be borne in mind in doing this.

LOCAL ACTS 32.92 The effect of Local Acts should not be overlooked. Though planning obligations, to which the present chapter relates, can only be created under 95 Regulation 7(2). 96 Under the transfer powers set out in reg 8. 97 See R (Khodari) v Royal Borough of Kensington & Chelsea [2018] 1 WLR 584, at para 36.

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Local Acts 32.92 section 106 of the TCPA 1990, there are a number of Local Acts under which the burden of a restrictive covenant entered into with a local authority may be able to run (see above, para 28.26 et seq). It was such an Act (namely section 16 of the Greater London Council (General Powers) Act 1974) which saved the position for the local authority in R (Khodari) v Royal Borough of Kensington and Chelsea Council:98 see paras 32.36–32.37 above.

98

[2018] 1 WLR 584.

825

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Part IV Reform

828

33 Reform of the law relating to restrictive covenants: Law Commission proposals

BACKGROUND TO THE LATEST PROPOSALS 33.1 Proposals for the reform of the law relating to land covenants have long been made and are summarised below.

The 1960s 33.2 In 1963 the Committee on Positive Covenants Affecting Land was established under the chairmanship of Lord Wilberforce. Following its report, the Lord Chancellor asked the Law Commission to give priority to an examination of the law of restrictive covenants in order to achieve comprehensive reform. The Law Commission produced its Report on Restrictive Covenants in 1967 (Law Com No 11). Following this, a draft bill was prepared to introduce a system of ‘land obligations’ to take the place of both restrictive and positive covenants. However, it was widely criticised by practitioners in failing to establish ‘land obligations’ as interests in land which interacted satisfactorily with the surrounding body of general law, and, in particular, the 1925 property legislation. The Bill was never introduced.

The 1970s 33.3 In 1971 the Law Commission published a Working Paper on Appurtenant Rights in which it made far-reaching proposals for the amalgamation and re-classification of easements, covenants and profits. The plan was subsequently considered to be too ambitious, however, and work proceeded on the possible reform of the law of covenants alone, leaving aside the reform of easements and other analogous rights.

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33.4  Reform of the law relating to restrictive covenants

The 1980s 33.4 In 1984 the Law Commission published a new report, entitled ‘The Law of Positive and Restrictive Covenants’ (Law Com No 127). This, in summary, recommended ‘comprehensive reform of the whole of this area of the law, taking as [the] model the existing law of easements’ and said: ‘The reforms proposed should enable obligations, whether restrictive or positive in nature, to run with the benefited and the burdened land so as to be directly enforceable by and against the current owners of each. They should also be such as to cater not only for the simple case of an obligation created between two neighbouring landowners, but also for the more complex needs of property developments (including those involving freehold flats).’1 This was proposed to be achieved by ‘the establishment of a new interest in land, to be known as a ‘land obligation’, capable of subsisting as a legal interest if it is equivalent to an estate in fee simple in possession or to a term of years absolute’. This was to involve two types of land obligation: neighbour obligations and development obligations (involving, in both cases, positive and negative obligations). Mode of creation, registration, transmissibility, remedies, powers of the court, and extinguishment and variation by what was then the Lands Tribunal, were all dealt with. The Government decided in 1998 not to implement these recommendations, however. In announcing its decision, the reason put forward for this by the then Lord Chancellor, Lord Irving of Lairg, was that there was a need to consider ‘how future developments in property law might affect the recommendations in this report’.2 It appears particularly to have had in mind the possible introduction of commonhold by the Government.

The 2000s 33.5 In 2001 the Law Commission reported jointly with HM Land Registry on updating land registration (in Land Registration for the Twenty-First Century: A Conveyancing Revolution),3 but in it postponed detailed consideration of reform relating to the law of prescription pending a comprehensive review of the law of easements and covenants.4 33.6 The Commonhold and Leasehold Reform Act 2002 was subsequently passed. The reasoning behind it was explained by the Law Commission in para 1.9 of their 2011 Report as follows: ‘One major feature of the current law of freehold covenants is that a covenant which imposes a positive obligation does not run with land, meaning that obligations cannot be passed to successive owners; it is often said that this is the reason why freehold flats cannot be marketed. The commonhold system

1 See the summary at p 162 of the report. 2 See Hansard (HL), 19 March 1998, vol 587, col 213. 3 (2001) Law Com 271, HC 114. 4 At para 1.19 of that report.

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The Law Commission’s latest Report 33.9 was devised as an answer to that problem. Physically interdependent properties ranging from flats, sharing both structure and servicing arrangements, to separate houses, sharing responsibility for an estate road, can now be marketed as commonhold. Their community obligations can be managed by the commonhold association, without the imposition of a landlord to which so many objected on both practical and principled grounds.’ The Act accordingly enabled positive obligations to run with land in the case of a group of properties satisfying the requirements of the commonhold regime.5 33.7 This done, the Law Commission turned its attention again to the remaining difficulties in the law relating to covenants, and in particular the fact that positive covenants do not run with the land6 except (following the 2002 Act) in relation to commonhold developments. It did so in conjunction with a review of the law of easements and profits. A new consultation paper was published in 2008, covering both covenants and easements and profits. Following consideration of the comments received, work was carried forward, resulting in the Commission’s latest report, published in 2011.

THE LAW COMMISSION’S LATEST REPORT 33.8 The Law Commission’s Report, ‘Making Land Work: Easements, Covenants and Profits à Prendre’7 (2011) (‘the Report’) was presented to Parliament on 7 June 2011. Like the 2008 consultation paper, the 2011 Report related to the law of easements and profits as well as to covenants, as will be apparent from its title, although only the recommendations relating to the law of covenants are considered here. The Report concerned only freehold covenants (that is to say, land covenants other than leasehold covenants made between landlord and tenant that relate only to the demised premises8).

Problems intended to be tackled 33.9 The Commission identified the following principal problems in relation to the existing law relating to land covenants: (1) The difficulty of identifying who has the benefit of a restrictive covenant, for the following reasons: (a) There is no requirement that the instrument creating the covenant should describe the benefited land with sufficient clarity to enable its identification without extrinsic evidence.

5 6 7 8

See Chapter 31 above. In the absence of some particular and potentially convoluted indirect method of enforcement being attempted, as to which, see Chapter 29 above. Law Comm No 327. See para 5.3 of the report.

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33.10  Reform of the law relating to restrictive covenants Subsequent to the report, it is to be noted that the Court of Appeal in Crest Nicholson Residential (South) Limited v McAllister [2004] 1 WLR 2409 held that in the case of annexation it is a requirement under the existing law that ‘the land which is intended to be benefited must be so defined as to be easily ascertainable’.9 However, this only applies to annexation, and extrinsic evidence can be used together with the description in the conveyance or other instrument to aid identification of the land intended to be benefited. (b) The benefit of a restrictive covenant, being an equitable interest, cannot be registered as an appurtenant interest on the register of title to the dominant land. As there is no legal mechanism for the registration of the benefit, there is therefore no public record of it. This causes difficulties when there is a need to vary or extinguish the restriction in the covenant, whether by agreement or by application to the Upper Tribunal under section 84 of the Law of Property Act 1925, particularly as the land originally benefited may have been subdivided many times since the covenant was imposed. This furthermore leads to a large number of restrictive covenant indemnity policies being purchased by borrowers, including policies obtained to satisfy mortgagees even though realistically there may be very little likelihood that a covenant will be enforceable. This obviously adds to the expense of land transactions. (2) The rules for the running of the benefit and the burden of restrictive covenants are different and complicated, and as part of this, covenants created before and after 1925 are subject to different rules. (3) The contractual liability between the original parties to a covenant persists despite changes in the ownership of the land; and when the land is sold, the original covenantor may remain liable for ever even though without possession of the land he can no longer comply with it. (4) Although the benefit of a positive covenant can run at law, the burden of a positive covenant does not run with the land so as to bind successors in title (although it could be achieved through convoluted indirect mechanisms such as the use of leasehold title,10 chains of indemnity,11 estate rentcharges,12 and the benefit and burden principle13). The first three items above were noted to arise from the contractual nature of covenants.

The Law Commission’s conclusions 33.10 The law in Scotland,14 Commonwealth countries, and in America was at various points considered by the Commission.

9 10 11 12 13 14

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At para 32. See further, para 6.35 et seq above. See above, para 29.98 et seq. See above, para 29.108 et seq. See above, para 29.68 et seq. See above, 29.72 et seq. Where positive covenants have run with the land as property burdens since the case of Tailors of Aberdeen v Coutts (1834) 13 S 226.

The Law Commission’s latest Report 33.11 It was concluded that reform was necessary and that positive covenants should be allowed to run with the land but that this needed to be accompanied by safeguards to minimise practical and economic risk as a result of them being enforceable against future landowners. It was at the same time acknowledged that altering the law for existing restrictive covenants (as opposed to for future covenants) would be problematic, both in practical terms and because any tidying up of the rules would be likely to lead to an adjustment of their effects (which might also be incompatible with Article 1 of the First Protocol to the European Convention on Human Rights in so far as it deprived landowners of vested rights). Reforms are therefore proposed to be made solely in relation to rights and obligations created in the future.

The Law Commission’s recommendations 33.11

The Commission’s recommendations are as follows.

(1) That the owner of an estate in land should in future be able to create positive and negative obligations able to take effect (subject to the formal requirements for the creation of legal interests) as legal interests appurtenant to another estate in land, and therefore as registrable interests pursuant to the Land Registration Act 2002, provided that: (i) the benefit of the obligation touches and concerns the benefited land; (ii) the obligation is: (a) an obligation not to do something on the burdened land; or (b) an obligation to do something on the burdened land or on the boundary (or any structure or feature that is treated as marking or lying on the boundary) of the burdened and benefited land; or (c) an obligation to make a payment in return for the performance of an obligation of the kind mentioned in paragraph (b); and (iii) the obligation is not made between lessor and lessee relating to demised premises.15 Positive and restrictive covenants given by the owner of an estate in land, that meet these requirements would take effect as land obligations, unless expressed to be personal to the parties. (2) For the future, covenants made by the owner of an estate in land that satisfy the conditions set out above should take effect not as promises and not in accordance with the current law relating to restrictive covenants, but as new legal interests in the burdened land, appurtenant to the benefited estate in land.16 Once entered into, requirements would take effect as ‘land obligations’. They would run with the benefited land, and bind successors in title to the burdened land, as this new type of legal interest rather than as covenants, and without reference to any of the present law relating to the running of restrictive covenants. They would do so because they would be 15 16

See para 5.69 of the report. Ibid, para 5.70.

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33.11  Reform of the law relating to restrictive covenants new legal interests in land, so long as the requirements of the general law for the creation of legal interests are met. The rules in Tulk v Moxhay and in Elliston v Reacher would have no relevance to these new interests because they would not be covenants but the new form of land obligations. Practitioners would be free to draft such obligations in the current familiar form of land covenants, and so long as they complied with the above requirements (and the general requirements of the law in relation to the creation of legal interests, which will be next considered) they would amount to, and be enforceable as, the new legal interests in land known as land obligations. There would be no need for land obligations to be drafted in any particular way. The important issue would be whether the obligation satisfies the statutory definition. It would be important, however, for conveyancers to recognise that as land obligations would be interests in land, they would therefore fall within all the usual rules relating to such interests. In particular, they would need to be clear and certain. Vague obligations to maintain something ‘when necessary to do so’ or ‘to a reasonable standard’ would not therefore be sufficient; the servient owner (who may not be the original grantor) would have to know exactly what had to be done and when. (3) The formal requirements for the creation of legal and equitable interests in land would need to be met in order to create land obligations.17 The formal requirements for the express creation of a legal interest in land are that: (1) it must be granted by deed (section 52 of the Law of Property Act 1925); and (2) if the estate out of which the right is granted is registered, the grant of the right must be completed by registration (section 27 of the Land Registration Act 2002). No proposals are made to change those requirements, which would therefore apply to the creation of land obligations. For the sake of simplicity and consistency within the law, no reason was seen for them not to apply. Registration of the land obligation would be necessary. Once it is possible to create legal land obligations, the effect of the principle expressed in Lysaght v Edwards18 would be to ensure that obligations that fall short of the requirements for legal validity – for example, for want of formalities or of registration – would take effect in equity so long as the requirements for contractual validity were met. Generally, of course, land obligations would be contained in transfers of land and would become legal interests upon registration; there should be very few that remain equitable.

17 18

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See para 6.47 of the report. (1875–76) LR 2 ChD 449. The case is authority for the principle that, where the parties contract to create a legal estate or interest but fail to comply with the relevant formalities to do so (for example, use of a deed or registration), that contract will nevertheless take effect in equity so as to create an equitable estate or interest.

The Law Commission’s latest Report 33.11

(4)

(5)

(6)

(7)

(8)

19 20 21 22

The Commission saw no convincing reason not to leave the background law unchanged, so that obligations that meet the requirements for land obligations set out but did not meet the requirements for the creation of legal interests would take effect in equity. If the title to land burdened by an equitable land obligation is registered, the obligation would not be enforceable against a purchaser unless protected by a notice on the register of title. The position as to enforceability, in registered land, would therefore be exactly the same as it is for equitable easements. The burden of land obligations would appear in the charges register of the title to the burdened land, and it would be possible to note there the burden of equitable land obligations. Following the implementation of the reforms it should no longer be possible to create freehold covenants enforceable under the rules arising out of Tulk v Moxhay.19 As indicated above, the proposals would have no effect on existing covenants, however. Accordingly, existing covenants would be subject to the present rules. There would therefore remain many existing restrictive covenants with proprietary effect under the rule in Tulk v Moxhay that would continue, potentially for ever. For the future, an obligation to fence should take effect as a land obligation and not as an easement.20 As referred to at 29.112 above, the ‘easement’ of fencing is an anomaly, which by its historic use serves the purpose of rendering enforceable what is really a particular form of positive covenant relating to fencing. This would be unnecessary under the Commission’s proposals, where such positive obligations relating to the land would be enforceable as the new form of land obligations. It should be possible to create obligations ancillary to the legal interests recommended above, and such obligations should also be able to take effect as legal interests in land.21 This would cover such things as provisions for self-help in the event of breach of the land obligation (such as allowing entry onto the land to remedy the breach) for which provision could be made ancillary to the obligation. Where title to the burdened land is unregistered, the burden of a land obligation should be registrable as a land charge under the Land Charges Act 1972, and if not registered should be void against a purchaser of the burdened land or of any interest in that land.22 The Commission does not recommend that land obligations should be overriding interests. As to equitable land obligations, which would be unusual, see (3) above. Land obligations, whether restrictive or positive, should be incapable of creation by implication or prescription, and section 62 of the Law of

See para 5.89 of the report. Ibid, para 5.94. Ibid, para 6.36. Ibid, para 6.57.

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33.11  Reform of the law relating to restrictive covenants Property Act 1925 should not operate so as to create a land obligation or to convert one from a leasehold to a freehold interest. Under the current law, restrictive covenants are not capable of being created by either implication or prescription, and that would remain the case in relation to land obligations. (9) Where land burdened by a land obligation is registered voluntarily, and the obligation is not noted in the charges register because it was not registered as a land charge, this should not amount to a mistake on the register for the purposes of Schedule 8 to the Land Registration Act 2002.23 Where first registration of land burdened by a land obligation arises from one of the ‘triggers’ for first registration set out in section 4 of the Land Registration Act 2002 then, where the burden of the obligation has not previously been registered as a land charge, it will, as a result of the disposition, be void against the disponee. There is therefore no occasion for it to be noted on the register. If, however, first registration is voluntary, pursuant to section 3 of the Land Registration Act 2002, then the land obligation, despite not having previously been registered as a land charge, will not be rendered void by that failure. The burden survives. If it is not recorded in the charges register of the newly-registered servient land there will be a mistake on the register. It can be put right by the alteration of the register pursuant to Schedule 4 to the Land Registration Act 2002, and it may also give rise to the payment of an indemnity pursuant to Schedule 8 to the Act. Such an error will not be one that Land Registry staff have the means of avoiding and the Commission appears to have been persuaded to this view by the Land Registry (see paragraph 6.72 of the Report) on the basis that the payment of any resulting indemnity would be a burden that would inevitably be passed on by the Land Registry in charging increased fees. (10) Statute should state, for the avoidance of doubt, that section 58(1) of the Land Registration Act 2002 has no effect in relation to an entry made in pursuance of an instrument that purports to create a land obligation that does not touch and concern the dominant land.24 Land obligations would be legal interests and therefore within the scope of the registration guarantee. However, section 58 cannot sensibly confer a legal estate upon the holder of a purported land obligation that does not meet with the requirements for valid creation, in particular, if it does not touch and concern the benefited land. The Commission considered that the Land Registry should not be required to guarantee the results of defective conveyancing, and recommended such a provision for the avoidance of doubt. (11) Provided that title to the benefited and burdened land is registered, the fact that they are in common ownership and possession should not prevent the creation or existence of land obligations in relation to registered land.25 But for this, the ‘unity of seisin’ rule (ie that an interest cannot be created, and cannot continue to exist, where the benefited and burdened land are in common ownership and possession)26 would be likely to be applied by the 23 24 25 26

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Ibid, para 6.73. Ibid, para 6.78. Ibid, para 6.83. See Chapter 15, para 15.18 et seq above.

The Law Commission’s latest Report 33.11 courts in relation to land obligations. The Commission intended this rule should continue to apply, but not in relation to legal obligations created in registered land. Land obligations created in this way, with the benefited and burdened land delineated across the whole of a developed estate, would be mutually enforceable by different landowners where required. For example, the Commission said, the developer might impose on each plot an obligation not to use the land for business use; the benefited land, as regards each such obligation, could be the whole of the rest of the developer’s land prior to sale. Once the developer’s land is sold off, each of the properties that took the benefit would be able to enforce the obligation. However, on unity of ownership and possession of the benefited and burdened estates the land obligations would be able to be expressly released. The express release or variation of a registered interest would be a registrable disposition. (12) The Land Registry should investigate the feasibility of making provision for short-form land obligations in the Land Registration Rules.27 (13) The benefit of a land obligation would be appurtenant to the estate in land (ie leases and legal and equitable fees simple) for the benefit of which it is imposed and would therefore be transmitted with that estate and to any estates (but not to interests) derived out of it.28 (14) Where more than one estate has the benefit of a reciprocal payment obligation, only the proprietor of an estate who has incurred the relevant expenditure in carrying out the linked obligation should be entitled to recover the payment (and if more than one, in proportion to their expenditure).29 The Commission intend that obligations to pay money should only be capable of being land obligations if they are reciprocal payment obligations (see (1) above). A problem could potentially arise where under the obligation more than one person is entitled to demand payment. This is intended to deal with that situation by providing that the only person(s) entitled to recover payment would be the person(s) that have incurred the expenditure in carrying out the linked obligation. (15) The burden of a restrictive land obligation should be transmitted to all estates and interests derived out of the burdened estate, and to all occupiers of the burdened land, save for: (a) the owner of an estate or interest that has priority to the land obligation (and an occupier authorised by such an owner); and (b) a mortgagee of the burdened land who is not in possession of it.30 (16) The burden of a positive land obligation should be transmitted: (a) to estates derived out of a burdened estate which confer a right to immediate possession of the burdened land, in accordance with the

27 28 29 30

See para 6.89 of the report. Ibid, para 6.98. Ibid, para 6.99. Ibid, para 6.104.

837

33.11  Reform of the law relating to restrictive covenants normal priority rules, save that the burden of a positive obligation shall not pass to a lease for seven years or less; and (b) to mortgagees when they come into possession of a burdened estate.31 In relation to lessees for seven years or less, the Commission said it would for example plainly be inappropriate for a weekly tenant to have to spend several thousand pounds re-surfacing a driveway, and that whilst the burden should pass ‘downwards’, it should not do so under leases for a term of seven years or less. (17) Where a landlord and a tenant are both burdened by a positive land obligation, the landlord should be liable to the tenant if the tenant suffers loss as a result of the landlord’s breach of the obligation unless the parties expressly provided otherwise in the relevant lease.32 The Commission expects that landlords and tenants would agree the incidence of positive obligations between themselves. However, where they do not, this would be the default rule. Though all may be liable to the benefited owner for a breach of the obligation, as between themselves the freeholder would be liable to the tenant in the absence of any contrary provision in the relevant lease. (18) Where property burdened by a positive obligation is divided, the resulting estates should be jointly and severally liable on the obligation, but liability between those estates should be apportioned in the proportions which, in the absence of express apportionment, their respective parts bear to the area of the burdened property.33 Practical problems may arise on sub-division of burdened land, particularly where the obligation is positive, in which case: (a) the proprietor of one part of the land (whether retained or transferred) may not be able to comply with the obligation following a transfer of part (for example where the obligation was to maintain a fence and the transferred part did not have access to the fence); and (b) where the obligation is to make a monetary payment. Accordingly, a default rule for liability of the servient owners amongst themselves is provided for. (19) Where land burdened by a positive obligation is divided, and the parties (that is, the various servient owners) agreed between themselves the extent to which both (or all) are liable to perform the obligation, the obligations arising under that agreement would be land obligations.34 It would clearly sometimes be in the parties’ interests to agree that a different division should apply, and such a division of responsibility could still be made by contract between the parties. As referred to above, however, the general rule would be that an obligation to make a payment could be a land obligation only if it is a reciprocal payment obligation, in effect paying for, or contributing towards, the payee’s doing something (see (a) above) pursuant to a land obligation – for example, an obligation to pay for the maintenance of a driveway would

31 32 33 34

838

Ibid, para 6.115. Ibid, para 6.116. Ibid, para 6.126. Ibid, para 6.131.

The Law Commission’s latest Report 33.11 only be valid if made in return for an obligation to maintain the driveway. However, an exception to that rule would be made for obligations to make a payment arising from an apportionment of the burden of a covenant between parties who are jointly liable upon it. The Commission noted that even in cases where the default apportionment rule by area would appear to present no difficulties, an express apportionment arrangement would be advisable in order to prevent disputes, perhaps about area, in the future. (20) Both an adverse possessor of land who has not made a successful application to be registered as proprietor to that land, and an adverse possessor of unregistered land who has had his or her own title registered, would be subject to the land obligations that bound the estate of the dispossessed proprietor (whether positive or negative). The Commission considered that squatters should be bound by the same land obligations that burdened the dispossessed proprietor’s estate. That accords with the present law (see Re Nisbet & Potts’ Contract,35 referred to in Chapter 1 at para 1.51), but additional provision would be needed to make squatters liable for positive obligations as they are not generally binding on occupiers. (21) Breach of a land obligation should be enforceable by a new statutory cause of action available to those entitled to enforce it.36 (22) A person bound by a negative land obligation should be defined as in breach of it by doing something which it prohibits, or by permitting or suffering someone else to do so; and a person who is bound by a positive obligation should be defined as breaching it if the obligation is not performed.37 The reference to ‘permitting or suffering’ would mean that a landlord could not for example escape liability by allowing a tenant to use a property in breach of a negative obligation; nor could a trustee avoid liability where the breach was committed by the beneficiary of the trust. However, they would not be liable if the breach was by a person outside their control such as a trespasser. For positive obligations, those who are bound by them would be jointly and severally liable for breaches, as they would all be responsible for ensuring that the work or payment required was performed. (23) No amount would be payable under a reciprocal payment obligation in respect of work not carried out to a reasonable standard; and in determining the amount payable under such an obligation, only costs reasonably incurred in performing the obligation for which payment is made should be taken into account.38 As the Commission pointed out, without such provisions the possibilities for abuse would be obvious. The proposed way of dealing with this would replicate the protection embodied in the landlord and tenant legislation.39 However, under this proposal (and the wording of the draft Bill appended to the Commission’s report) if work was not carried out to a reasonable

35 36 37 38 39

[1906] Ch 386. See para 6.148 of the report. Ibid, para 6.154. Ibid, para 6.157. See s 19 of the Landlord and Tenant Act 1985.

839

33.11  Reform of the law relating to restrictive covenants standard this would mean nothing was payable even though work done to a lesser standard may offer substantial benefit, though it may, for example, be of less long-standing benefit. (24) By way of remedy for breach of a land obligation, a court should have specific power, in its discretion, to grant an injunction, to make an order for performance of the obligation, or to make an order for the payment of damages or of any sum due under the obligation.40 A land obligation would be an interest in land, the primary remedy for the breach of which would be an injunction where the substance of the obligation is restrictive. This reflects the current position in relation to land covenants. A positive obligation would be enforced by an order to perform the covenant or, where a financial obligation, by an order for the payment of a sum of money. The court would continue to be able to make a court order that damages be paid in substitution for an injunction, and its jurisdiction to make declarations would also be unaffected. (25) Contract principles should be applied to the calculation of damages for breach of a land obligation.41 (26) The limitation period for liability for breach of a land obligation should be 12 years.42 The Commission considered that section 8 of the Limitation Act 1980 would, in the absence of any other provision, impose a 12-year period at least where land obligations are imposed by deed (see section 8 of the Limitation Act 1980), but, for the avoidance of doubt, recommended express provision. (27) Where there is provision for self-help by the dominant owner in the terms of the land obligation, the fact that the dominant owner chooses not to exercise that right should not reduce damages payable by the servient owner for breach of the obligation.43 (28) It should be possible for the parties to a land obligation to add ancillary provisions, such as provision for the dominant owner to enter the servient land and carry out the work required by a positive obligation, if the servient owner has failed to do it. Where not so provided, the Commission did not consider there should be a remedy of self-help, however. It would therefore be for the parties and their advisers to consider this and to draft any such power in terms that were considered to suit individual circumstances. It was noted, though, that there will be some cases where failure to comply with a positive land obligation constitutes a nuisance and where that remedy will be available – for example, where the obligation is to maintain a retaining wall. It was also noted that what was then RSC Order 45, rule 8 (and is now CPR, rule 70.2A) enables the court to authorise direct action where a mandatory injunction is not complied with, and this is intended to be equally applicable in the case of land obligations. (29) Where the dominant owner is entitled to exercise self-help and does so, the costs of the work should be recoverable from the servient owner who 40 41 42 43

840

See para 6.165 of the report. Ibid, para 6.166. Ibid, para 6.171. Ibid, para 6.176.

The Law Commission’s latest Report 33.11 should have carried out the work, but only in so far as the cost is reasonable and the work done to a reasonable standard. Liability for such a payment would be joint and several where more than one servient owner is subject to the same obligation.44 It was considered that where there is provision for self-help the dominant owner should not be obliged to carry out the work himself, and that damages should not be reduced if the dominant owner chooses not to do so. However, where the dominant owner chooses to exercise such a provision, then whilst the costs of the work would be recoverable from the servient owner who should have carried it out himself, to prevent abuse they would only be recoverable to the extent that they are reasonable and the work done to a reasonable standard. See, in relation this, the note under (23) above. (30) Where land burdened or benefited by a positive land obligation (including an obligation to make an apportionment payment) escheats, the Crown should not be bound by that obligation, or entitled to enforce it (as the case may be), unless it takes possession or control of the land.45 Crown land would be able to benefit from, and be burdened by, land obligations, which is the current position in relation to restrictive covenants. A special issue would arise, however, where land burdened with a positive obligation escheats. Escheat is a feature of the feudal system of land ownership: all land is held of the Crown. If an estate in land determines, the Crown continues to be the owner of the land, freed from the estate previously carved out of the Crown’s interest in it. The escheat is only completed when the Crown takes possession or exercises control over the property or takes proceedings for its recovery. The Administration of Estates Act 1925 abolished a number of instances of escheat. As a result, escheat of land on the termination of a freehold estate is now limited to three situations: (1) where a landowner’s trustee in bankruptcy or liquidator exercises the statutory power to disclaim the freehold estate under section 315 or section 178 of the Insolvency Act 1986; (2) on dissolution of a company in circumstances where its property vests in the Crown as bona vacantia; (3) where the Crown has made a grant of a freehold subject to restrictions as to the user of the land, enforceable by a right of entry which has been exercised. Under the current law, escheat will not determine a subordinate interest in the escheated land.46 In view of this, the burden of a positive land obligation would not terminate on the escheat of a freehold estate to the Crown Estates (or to the Duchies of Lancaster or Cornwall). It would continue to burden the land in the same way as a lease or mortgage.

44 Ibid, para 6.177. 45 Ibid, para 6.185. 46 See Scmlla Properties Ltd v Gesso Properties (BVI) Ltd [1995] BCC 793.

841

33.11  Reform of the law relating to restrictive covenants If a new freehold estate is granted out of the land, the burdens will attach to that and the new owner will be liable on the obligations. Whether the benefit of a positive land obligation would survive escheat would not be clear under the general law. However, where the Crown is bound by a positive obligation as a result of escheat, and it has taken possession or control of the land, and has the benefit of any reciprocal payment, it was considered that it should equally be bound to do that which it was paid in respect of. (31) Section 84 of the Law of Property Act 1925 should be re-arranged to make its content clearer and more accessible. The President of the Upper Tribunal47 in a representation to the Commission pointed out the difficulty of reading and navigating section 84 in its current form. The Commission recommended it be re-drafted, and did this in clauses 29 to 39 and Schedule 2 to the draft Bill appended to its report. It is intended to now cover land obligations (as per the next recommendation). (32) The jurisdiction of the Lands Chamber of the Upper Tribunal would apply to land obligations and be amended to allow for it to make orders for the modification or discharge of all land obligations, including positive obligations.48 The Upper Tribunal’s jurisdiction to discharge or modify restrictive land obligations is proposed to be the same as that applicable currently in relation to restrictive covenants. (33) The jurisdiction of the Upper Tribunal (Lands Chamber) should be extended to include leasehold land of any term.49 The restriction of the scope of section 84 to leases of 40 years or more where at least 25 years have expired was considered by the Commission to be arbitrary and unduly restrictive. It therefore proposes it be abolished (although the current restriction for leases granted prior to reform would remain in relation to those). (34) In relation to restrictive land obligations, the grounds for modification and discharge of restrictions currently contained in section 84(1) of the Law of Property Act 1925 should remain the same.50 (35) In relation to a positive land obligation: (a) the Upper Tribunal should have the power to modify or discharge the obligation if, as a result of changes in circumstances, performance of the obligation has ceased to be reasonably practicable or has become unreasonably expensive when compared with the benefit that it confers; and (b) the Upper Tribunal should have the power, whenever a positive obligation is discharged or modified, also to discharge or modify a reciprocal payment obligation owed in respect of that covenant, and vice versa;

47 Ie the Upper Tribunal (Lands Chamber), which is generally referred to throughout this book simply as the ‘Upper Tribunal’ for convenience. 48 See para 7.35 of the report. 49 Ibid, para 7.38. 50 Ibid, para 7.55.

842

The Law Commission’s latest Report 33.11 (c) where the Upper Tribunal made an order modifying or discharging a reciprocal payment obligation, it should on the application of the person subject to the related obligation (‘the performance obligation’) also be able to modify another reciprocal payment related to the performance obligation, if without such an order the burden of the costs of complying with the performance obligation will not be appropriately distributed.51 In relation to (b) above, it was anticipated by the Commission that there would be occasions when the modification of positive land obligations would mean that it is necessary, in the interests of fairness, to make a consequential modification to a reciprocal payment obligation; and indeed when a reciprocal payment obligation is modified or discharged it may likewise be necessary to discharge the corresponding obligation (and an application may be made to modify or discharge only one of a number of linked obligations). (36) The Upper Tribunal should be able to make an order modifying or discharging an obligation to make an apportionment payment if the payment as it stands obliges someone to make payments that are substantially out of proportion to the benefit conferred on that person.52 There may be some instances where the default apportionment rule (referred to above) would be inappropriate, but the servient owners may be unable to agree an alternative apportionment. Likewise, an apportionment agreement that was initially appropriate may cease to be so, as a result of a change in circumstances. Accordingly, the Upper Tribunal would be able to change apportionment arrangements, whether arising under the default rule or from an express agreement, on the application of any or all parties to it and in a way that binds all the relevant servient owners. (37) The power of the Upper Tribunal to modify a land obligation should include power to add new provisions to the interest, if the change appears to be reasonable and the applicant does not object; equally, the Tribunal could (as at present) refuse to modify an interest unless an additional provision is accepted by the applicant.53 As noted above in paras 16.135–16.138, section 84(1C) declares that the Tribunal’s power to modify restrictions includes a power to add new restrictions if the applicant accepts that (and that the Tribunal may refuse to make the order requested unless the new restriction is added). It is proposed the position be the same in relation to the new land obligations. (38) Where different grounds for modification or discharge of an interest are established against different persons who hold the benefit of the interest, that should be sufficient for the Upper Tribunal to make an order.54 The Commission considered there was no reason why the Upper Tribunal should not be able to discharge or modify an interest where some of those entitled have agreed while the rest (who have not agreed) will not be injured by the order sought (section 84(1)(c)). One anomaly of the present jurisdiction appears to be that this is not currently possible – see para 18.4 et seq above) and this provision is proposed in order to deal with this. 51 52 53 54

Ibid, para 7.69. Ibid, para 7.75. Ibid, para 7.80. Ibid, para 7.87.

843

33.12  Reform of the law relating to restrictive covenants (39) The jurisdiction of the court to make declarations, currently embodied in section 84(2) of the Law of Property Act 1925, should be concurrently exercisable by the Upper Tribunal55 and the Procedure Rules of the Upper Tribunal should be amended to take account of this.56 The fact that the Upper Tribunal does not at present have the power to make such declarations can be troublesome, particularly where there is an application for discharge or modification but the current extent of the covenant needs first to be declared. As a result, proceedings before it may have to be stayed pending a determination by the court on a separate application to the court for a declaration. There would have been difficulty previously in giving the Lands Tribunal such jurisdiction in that most of its full-time members were surveyors rather than lawyers. However, all judges, including High Court judges, are also now judges of the Upper Tribunal.57 The judges currently assigned to it include in particular a number of circuit judges who also sit as High Court judges, and more High Court judges could be assigned if necessary.

Prospects for reform 33.12 Legislation allowing the burden of certain positive covenants to run with the land was enacted in Northern Ireland as long ago as 1997,58 before the Law Commission’s latest report on covenants in England and Wales. 33.13 On 18 May 2016, following the Queen’s Speech, it was announced that the Government would bring forward proposals to respond to the Law Commission’s recommendations in a draft Law of Property Bill. However, there was then the Brexit referendum vote in June 2016, and the general election in June 2017. At the time of writing, no further government mention has been made of such a Bill. The last report, prior to this one now, was, of course, finally rejected after a delay of 14 years.59 The 2011 proposals have generally been welcomed, however, and the announcement in May 2016 raises hopes that reform will eventually move forward. In view of other pressing matters, such as the need to deal with Brexit and its implications, it is perhaps to be doubted that such a Bill will currently be high on the Government’s list of priorities. Unlike past proposals though, the impression now is that the recommendations in this third Law Commission report on the subject are unlikely to be rejected in their entirety and may in due course form the basis for a straightening out of the law. Fortunately for books like this, the old, current, law is likely to continue to apply even then to existing covenants, however.

55 56 57 58 59

844

Ibid, para 7.49. Ibid, para 7.51. Following s 6 of the Tribunals, Courts and Enforcement Act 2007. The Property (Northern Ireland) Order 1997, SI 1978/459 (NI 4). See the written Parliamentary Answer by Lord Irving of Lairg LC referred to at para 33.4 footnote 2 above.

Appendices

846

Appendix 1 Section 84 of the Law of Property Act 1925

LAW OF PROPERTY ACT 1925 (c 20) An Act to consolidate the enactments relating to Conveyancing and the Law of Property in England and Wales [9th April 1925]

Part II: Contracts, Conveyances and other Instruments 84 Power to discharge or modify restrictive covenants affecting land [(1) The [Upper Tribunal] shall (without prejudice to any concurrent jurisdiction of the court) have power from time to time, on the application of any person interested in any freehold land affected by any restriction arising under covenant or otherwise as to the user thereof or the building thereon, by order wholly or partially to discharge or modify any such restriction on being satisfied— (a) that by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the [Upper Tribunal] may deem material, the restriction ought to be deemed obsolete; or (aa) that (in a case falling within subsection (1A) below) the continued existence thereof would impede some reasonable user of the land for public or private purposes or, as the case may be, would unless modified so impede such user; or (b) that the persons of full age and capacity for the time being or from time to time entitled to the benefit of the restriction, whether in respect of estates in fee simple or any lesser estates or interests in the property to which the benefit of the restriction is annexed, have agreed, either expressly or by implication, by their acts or omissions, to the same being discharged or modified; or (c) that the proposed discharge or modification will not injure the persons entitled to the benefit of the restriction; 847

Appendix 1 and an order discharging or modifying a restriction under this subsection may direct the applicant to pay to any person entitled to the benefit of the restriction such sum by way of consideration as the Tribunal may think it just to award under one, but not both, of the following heads, that is to say, either— (i) a sum to make up for any loss or disadvantage suffered by that person in consequence of the discharge or modification; or (ii) a sum to make up for any effect which the restriction had, at the time when it was imposed, in reducing the consideration then received for the land affected by it. (1A) Subsection (1)(aa) above authorises the discharge or modification of a restriction by reference to its impeding some reasonable user of land in any case in which the [Upper Tribunal] is satisfied that the restriction, in impeding that user, either— (a) does not secure to persons entitled to the benefit of it any practical benefits of substantial value or advantage to them; or (b) is contrary to the public interest; and that money will be an adequate compensation for the loss or disadvantage (if any) which any such person will suffer from the discharge or modification. (1B) In determining whether a case is one falling within subsection (1A) above, and in determining whether (in any such case or otherwise) a restriction ought to be discharged or modified, the [Upper Tribunal] shall take into account the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas, as well as the period at which and context in which the restriction was created or imposed and any other material circumstances. (1C) It is hereby declared that the power conferred by this section to modify a restriction includes power to add such further provisions restricting the user of or the building on the land affected as appear to the [Upper Tribunal] to be reasonable in view of the relaxation of the existing provisions, and as may be accepted by the applicant; and the [Upper Tribunal] may accordingly refuse to modify a restriction without some such addition. (2)

The court shall have power on the application of any person interested— (a) to declare whether or not in any particular case any freehold land is, or would in any given event be, affected by a restriction imposed by any instrument; or (b) to declare what, upon the true construction of any instrument purporting to impose a restriction, is the nature and extent of the restriction thereby imposed and whether the same is, or would in any given event be, enforceable and if so by whom. Neither subsections (7) and (11) of this section nor, unless the contrary is expressed, any later enactment providing for this section not to apply to any restrictions shall affect the operation of this subsection or the operation for purposes of this subsection of any other provisions of this section.

848

Appendix 1 (3)

The [Upper Tribunal] shall, before making any order under this section, direct such enquiries, if any, to be made of any government department or local authority, and such notices, if any, whether by way of advertisement or otherwise, to be given to such of the persons who appear to be entitled to the benefit of the restriction intended to be discharged, modified, or dealt with as, having regard to any enquiries, notices or other proceedings previously made, given or taken, the [Upper Tribunal] may think fit. (3A) On an application to the [Upper Tribunal] under this section the [Upper Tribunal] shall give any necessary directions as to the persons who are or are not to be admitted (as appearing to be entitled to the benefit of the restriction) to oppose the application, and no appeal shall lie against any such direction; but [Tribunal Procedure Rules] shall make provision whereby, in cases in which there arises on such an application (whether or not in connection with the admission of persons to oppose) any such question as is referred to in subsection (2)(a) or (b) of this section, the proceedings on the application can and, if the rules so provide, shall be suspended to enable the decision of the court to be obtained on that question by an application under that subsection, … or otherwise, as may be provided by those rules or by rules of court. (4) … (5) Any order made under this section shall be binding on all persons, whether ascertained or of full age or capacity or not, then entitled or thereafter capable of becoming entitled to the benefit of any restriction, which is thereby discharged, modified or dealt with, and whether such persons are parties to the proceedings or have been served with notice or not. (6) An order may be made under this section notwithstanding that any instrument which is alleged to impose the restriction intended to be discharged, modified, or dealt with, may not have been produced to the court or the [Upper Tribunal], and the court or the [Upper Tribunal] may act on such evidence of that instrument as it may think sufficient. (7) This section applies to restrictions whether subsisting at the commencement of this Act or imposed thereafter, but this section does not apply where the restriction was imposed on the occasion of a disposition made gratuitously or for a nominal consideration for public purposes. (8) This section applies whether the land affected by the restrictions is registered or not …  . (9) Where any proceedings by action or otherwise are taken to enforce a restrictive covenant, any person against whom the proceedings are taken, may in such proceedings apply to the court for an order giving leave to apply to the [Upper Tribunal] under this section, and staying the proceedings in the meantime. (10) … (11) This section does not apply to restrictions imposed by the Commissioners of Works under any statutory power for the protection of any Royal Park or Garden or to restrictions of a like character imposed upon the occasion of any enfranchisement effected before the commencement of this Act in any manor vested in His Majesty in right of the Crown or the Duchy of Lancaster, nor (subject to subsection (11A) below) to restrictions created or imposed— (a) for naval, military or air force purposes, 849

Appendix 1 [(b) for civil aviation purposes under the powers of the Air Navigation Act 1920, of section 19 or 23 of the Civil Aviation Act 1949 or of section 30 or 41 of the Civil Aviation Act 1982.] (11A) Subsection (11) of this section— (a) shall exclude the application of this section to a restriction falling within subsection (11)(a), and not created or imposed in connection with the use of any land as an aerodrome, only so long as the restriction is enforceable by or on behalf of the Crown; and (b) shall exclude the application of this section to a restriction falling within subsection (11)(b), or created or imposed in connection with the use of any land as an aerodrome, only so long as the restriction is enforceable by or on behalf of the Crown or any public or international authority. (12) Where a term of more than forty years is created in land (whether before or after the commencement of this Act) this section shall, after the expiration of twenty-five years of the term, apply to restrictions, affecting such leasehold land in like manner as it would have applied had the land been freehold: (13) … Provided that this subsection shall not apply to mining leases.] Initial commencement Specified date: 1 January 1926. Extent This Act does not extend to Scotland: see s 209(3). Amendments Set out as reprinted with amendments in the Law of Property Act 1969, s 28(1), Sch 3. Sub-s (1): words ‘Upper Tribunal’ in square brackets in both places they occur substituted by SI 2009/1307, art 5(1), (2), Sch 1, para 5(a). Date in force: 1 June 2009: see SI 2009/1307, art 1; for transitional and savings provisions see art 5(6), Sch 5 thereto. Sub-s (1A): words ‘Upper Tribunal’ in square brackets substituted by SI 2009/1307, art 5(1), (2), Sch 1, para 5(a). Date in force: 1 June 2009: see SI 2009/1307, art 1; for transitional and savings provisions see art 5(6), Sch 5 thereto. Sub-s (1B): words ‘Upper Tribunal’ in square brackets substituted by SI 2009/1307, art 5(1), (2), Sch 1, para 5(a). Date in force: 1 June 2009: see SI 2009/1307, art 1; for transitional and savings provisions see art 5(6), Sch 5 thereto. Sub-s (1C): words ‘Upper Tribunal’ in square brackets in both places they occur substituted by SI 2009/1307, art 5(1), (2), Sch 1, para 5(a). Date in force: 1 June 2009: see SI 2009/1307, art 1; for transitional and savings provisions see art 5(6), Sch 5 thereto.

850

Appendix 1 Sub-s (3): words ‘Upper Tribunal’ in square brackets in both places they occur substituted by SI 2009/1307, art 5(1), (2), Sch 1, para 5(a). Date in force: 1 June 2009: see SI 2009/1307, art 1; for transitional and savings provisions see art 5(6), Sch 5 thereto. Sub-s (3A): words ‘Upper Tribunal’ in square brackets in both places they occur substituted by SI 2009/1307, art 5(1), (2), Sch 1, para 5(b)(i). Date in force: 1 June 2009: see SI 2009/1307, art 1; for transitional and savings provisions see art 5(6), Sch 5 thereto. Sub-s (3A): words ‘Tribunal Procedure Rules’ in square brackets substituted by SI 2009/1307, art 5(1), (2), Sch 1, para 5(b)(ii). Date in force: 1 June 2009: see SI 2009/1307, art 1; for transitional and savings provisions see art 5(6), Sch 5 thereto. Sub-s (3A): words omitted repealed by SI 2009/1307, art 5(1), (2), Sch 1, para 5(b)(iii). Date in force: 1 June 2009: see SI 2009/1307, art 1; for transitional and savings provisions see art 5(6), Sch 5 thereto. Sub-s (4): repealed by the Lands Tribunal Act 1949, Sch 2. Sub-s (6): words ‘Upper Tribunal’ in square brackets in both places they occur substituted by SI 2009/1307, art 5(1), (2), Sch 1, para 5(a). Date in force: 1 June 2009: see SI 2009/1307, art 1; for transitional and savings provisions see art 5(6), Sch 5 thereto. Sub-s (8): words omitted repealed by the Land Registration Act 2002, ss 133, 135, Sch 11, para 2(1), (5), Sch 13. Date in force: 13 October 2003: see SI 2003/1725, art 2(1). Sub-s (9): words ‘Upper Tribunal’ in square brackets substituted by SI 2009/1307, art 5(1), (2), Sch 1, para 5(a). Date in force: 1 June 2009: see SI 2009/1307, art 1; for transitional and savings provisions see art 5(6), Sch 5 thereto. Sub-s (10): repealed by the Lands Tribunal Act 1949, Sch 2. Sub-s (11): para (b) substituted by the Civil Aviation Act 1982, s 109, Sch 15, para 1. Sub-s (13): repealed by the Lands Tribunal Act 1949, Sch 2. See further See further, in relation to the exclusion of the power of the Lands Tribunal to discharge or modify restrictions affecting land in the case of land from which the legal effects of consecration are removed: the Care of Churches and Ecclesiastical Jurisdiction Measure 1991, s 22(7). See further, in relation to Scotland, in relation to the disapplication of this section to an agreement under the Ancient Monuments and Archaeological Areas Act 1979, s 17: the Ancient Monuments and Archaeological Areas Act 1979, s 17(7) (as substituted by the Title Conditions (Scotland) Act 2003, s 128(1), Sch 14, para 8). Subordinate legislation Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010, SI 2010/2600 (made under sub-s (3A)).

851

852

Appendix 2 Practice Statement

COMPOSITION OF TRIBUNALS IN RELATION TO MATTERS THAT FALL TO BE DECIDED BY THE LANDS CHAMBER OF THE UPPER TRIBUNAL © Crown copyright Published by the Courts and Tribunals Judiciary ON OR AFTER 1 JUNE 2009 1.

In this Practice Statement: a. ‘the 2007 Act’ means the Tribunals, Courts and Enforcement Act 2007; b. ‘the 2008 Order’ means the First-tier Tribunal and Upper Tribunal (Composition of Tribunal) Order 2008; c. ‘the 1996 Rules’ means the Lands Tribunal Rules 1996; d. ‘the Chamber President’ means the Chamber President of the Lands Chamber; e. ‘the Qualifications Order’ means the Qualifications for Appointment of Members to the First-tier Tribunal and Upper Tribunal Order 2008; f. ‘Member’ means judge or other member; g. ‘Other member’ means a member who is not a judge and has any of the qualifications set out in article 2(2)(h) of the Qualifications Order.

2.

3.

In exercise of the powers conferred by the 2008 Order the Senior President of Tribunals makes the following determinations and supplementary provision in relation to matters that fall to be decided by the Lands Chamber of the Upper Tribunal: Subject to paragraphs 4 to 6 below: a. b. c.

4.

A matter must be decided by one, two or three members as determined by the Chamber President. Where a matter is to be decided by one member the Chamber President may determine that the member is one of the other members. Where a matter is to be decided by two or three members the number of members who are to be judges and the number of members who are to be other members must be determined by the Chamber President.

In rule 52 (costs) of the 1996 Rules ‘the Tribunal’ is the Chamber President. 853

Appendix 2 5.

6.

Where the Upper Tribunal has given a decision that disposes of proceedings (‘the substantive decision’), any matter decided under, or in accordance with, Part 8A of the 1996 Rules or section 10 of the 2007 Act must be decided by the same member or members of the Upper Tribunal as gave the substantive decision. Paragraph 5 does not apply where complying with it would be impractical or would cause undue delay and, in such a case, the matter decided under, or in accordance with, Part 8A of the 1996 Rules or section 10 of the 2007 Act must be decided by: a.

b. 7.

Where more than one member of the Upper Tribunal is to decide a matter, the ‘presiding member’ for the purposes of article 7 of the 2008 Order is: a. b.

8.

if the substantive decision was given by more than one member of the Upper Tribunal and the presiding member or any other judge from that constitution is available, the members of the Upper Tribunal who gave the substantive decision and are available to decide the matter; otherwise, another judge of the Upper Tribunal nominated by the Chamber President.

the Chamber President where he is one of the members; or if the Chamber President is not one of the members, a member nominated by the Chamber President.

In proceedings under the Land Compensation Act 1961 where notices to treat have been served for the acquisition of several interests in any land then, if the acquiring authority so desire, the disputed claims of the persons entitled to those interests must, so far as practicable, be heard and determined by the same member or members of the Upper Tribunal. Lord Justice Carnwath Senior President Of Tribunals 9 June 2009

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Appendix 3 Practice Statement

LANDS CHAMBER OF THE UPPER TRIBUNAL DELEGATION OF FUNCTIONS TO STAFF ON OR AFTER 29 NOVEMBER 2010 © Crown copyright Published by the Courts and Tribunals Judiciary 1.

The Senior President of Tribunals hereby approves that a member of staff appointed under section 40(1) of the Tribunals, Courts and Enforcement Act 2007 may carry out the following functions of the Lands Chamber of the Upper Tribunal under the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 where that member of staff, who for the purpose of exercising those functions shall be known as a Registrar, has been authorised by the Chamber President of the Lands Chamber to exercise those functions: a.

Exercising any case management powers under rule 5 except: i. ii.

Suspending a decision under rule 5(3)(l) or (m); Requiring a tribunal to provide reasons for its decision under rule 5(3)(n); b. Dealing with irregularities under rule 7(2); c. Striking out under rule 8(1) or (3)(a) and reinstating proceedings under rule 8(5); d. Giving directions substituting or adding parties under rule 9; e. The making of costs orders under rule 10(1) and (6) in relation to functions exercised by a Registrar and the summary or detailed assessment of costs under rule 10(5)(a) and (c); f. Making orders as to the waiver or alternative method of service under rule 14; g. Making orders prohibiting disclosure or publication of documents and information under rule 15; h. Giving directions in relation to evidence and submissions under rule 16(1); i. Giving permission to call more than the number of expert witnesses permitted by rule 17(2) and (3) and directions as to the form of an expert’s evidence under rule 17(4); 855

Appendix 3 j.

Summoning witnesses and issuing orders to persons to answer questions and produce documents under rule 18; k. Giving consent to withdraw a case and reinstating a case under rule 20; l. Giving directions as to statements of case under rule 29(3)(a) and directions as to whether a notice of reference or a response to it shall stand as a statement of case under rule 29(3)(b); m. Giving directions as to notices to be given to those persons who appear to be entitled to the benefit of the restriction under rule 33; n. Giving directions as to statements of case under rule 36; o. Giving directions as to additional notices to be given to those persons who appear to be entitled to the benefit of the restriction under rule 37; p. Giving directions as to enquiries to be made of local authorities under rule 38; q. Giving directions as to notices to be given to those who appear to be likely to be affected by the registration of a light obstruction notice under rule 42; r. The issuing of temporary certificates under rule 43; s. The issuing of definitive certificates under rule 44; t. Giving procedural directions under rule 45; u. In respect of hearings held by a Registrar, giving directions as to who is entitled to attend a hearing or part of it under rule 48(5), and excluding a person or a party from a hearing under rule 48(6) or (7); v. Correcting clerical mistakes or other accidental slips or omissions in decisions or records of decisions under rule 53; w. Giving directions as to the application of the Lands Tribunal Rules 1996 and the disapplication of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 under rule 60. 2.

In accordance with rule 4(3) of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010, within 14 days after the date that the Tribunal sends notice of a decision made by a Registrar pursuant to an approval under paragraph 1 above to a party, that party may apply in writing to the Tribunal for the decision to be considered afresh by a judge. Lord Justice Carnwath Senior President Of Tribunals 29 November 2010

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Appendix 4 Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 SI 2010/2600 – as in force from 6 April 2014

After consulting in accordance with paragraph 28(1) of Schedule 5 to the Tribunals, Courts and Enforcement Act 2007, the Tribunal Procedure Committee has made the following Rules in exercise of the power conferred by sections 10(3), 16(9), 22 and 29(3) and (4) of, and Schedule 5 to, that Act, section 84(3A) of the Law of Property Act 1925 and section 2(5) of the Rights of Light Act 1959. The Lord Chancellor has allowed the Rules in accordance with paragraph 28(3) of Schedule 5 to the Tribunals, Courts and Enforcement Act 2007. Contents PART 1 INTRODUCTION 1 2 3

Citation, commencement, application and interpretation Overriding objective and parties’ obligation to co-operate with the Tribunal Alternative dispute resolution and arbitration

PART 2 GENERAL POWERS AND PROVISIONS 4 Delegation to staff 5 Case management powers 6 Procedure for applying for and giving directions 7 Failure to comply with rules etc 8 Striking out a party’s case 9 Addition, substitution and removal of parties [10 Orders for costs] 11 Representatives 12 Calculating time 13 Sending and delivery of documents 14 Waiver or alternative method of service 857

Appendix 4 15 16 17 18

Use of documents and information Evidence and submissions Expert evidence Summoning of witnesses and orders to answer questions or produce documents 19 Site inspections 20 Withdrawal PART 3 APPLICATIONS FOR PERMISSION TO APPEAL 21 Application to the Tribunal for permission to appeal 22 Respondent’s representations in relation to permission to appeal 23 Decision in relation to permission to appeal PART 4 APPEALS 24 Notice of appeal 25 Respondent’s notice 26 Appellant’s reply PART 5 REFERENCES [Omitted – irrelevant to section 84 applications] PART 6 APPLICATIONS UNDER SECTION 84 OF THE LAW OF PROPERTY ACT 1925 (DISCHARGE OR MODIFICATION OF RESTRICTIVE COVENANTS AFFECTING LAND) 31 Interpretation 32 Method of making application 33 Notices to be given 34 Notice of objection 35 Admission of objectors 36 Statements of case 37 Power to direct additional notices 38 Enquiries of local authorities 39 Orders where compensation is payable PART 7 APPLICATIONS UNDER SECTION 2 OF THE RIGHTS OF LIGHT ACT 1959 [Omitted – irrelevant to section 84 applications] PART 8 [CASES TRANSFERRED TO THE TRIBUNAL, INCLUDING JUDICIAL REVIEW PROCEEDINGS] [Omitted – irrelevant to section 84 applications] PART 9 HEARINGS 46 47 48 49 858

Decision with or without a hearing Notice of hearings Public and private hearings Hearings in a party’s absence

Appendix 4 PART 10 DECISIONS 50 Consent orders 51 Decisions [51A Interest] PART 11 CORRECTING, SETTING ASIDE, REVIEWING AND APPEALING DECISIONS OF THE TRIBUNAL 52 Interpretation 53 Clerical mistakes and accidental slips or omissions 54 Setting aside a decision which disposes of proceedings 55 Application for permission to appeal 56 Tribunal’s consideration of application for permission to appeal 57 Review of a decision 58 Power to treat an application as a different type of application PART 12 REVOCATIONS AND TRANSITIONAL PROVISION 59 Revocations 60 Transitional provision

PART 1 Introduction 1  Citation, commencement, application and interpretation (1) These Rules may be cited as the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 and come into force on 29th November 2010. (2) These Rules apply to proceedings before the Lands Chamber of the Upper Tribunal. (3) In these Rules— ‘the 1949 Act’ means the Lands Tribunal Act 1949; ‘the 1961 Act’ means the Land Compensation Act 1961; ‘the 2007 Act’ means the Tribunals, Courts and Enforcement Act 2007; ‘appellant’ means a person who sends or delivers a notice of appeal to the Tribunal and any person added or substituted as an appellant under rule 9 (addition, substitution and removal of parties); ‘applicant’ means a person who makes an application to the Tribunal and includes a person who— (a) makes an application under section 84 of the Law of Property Act 1925; (b) makes an application under section 2 of the Rights of Light Act 1959; (c) applies for permission to appeal; (d) in judicial review proceedings transferred to the Tribunal, was a claimant in the proceedings immediately before they were transferred; or 859

Appendix 4 (e) is added or substituted as an applicant under rule 9 (addition, substitution and removal of parties); ‘claimant’ means a party to a reference sent or delivered under Part 5 (references) who is not a respondent authority, acquiring authority or compensating authority or has been added or substituted as a claimant under rule 9 (addition, substitution and removal of parties); ‘hearing’ means an oral hearing and includes a hearing conducted in whole or in part by video link, telephone or other means of instantaneous twoway electronic communication; ‘objector’ means a person who gives to the Tribunal notice of objection to an application under section 84 of the Law of Property Act 1925; ‘party’ means— (a) (b) (c) (d)

an appellant; an applicant; a claimant; a respondent authority, an acquiring authority or a compensating authority in a reference made under Part 5 (references); (e) an objector; (f) a respondent; or (g) in a case transferred to the Tribunal, any person who was a party to the proceedings immediately before the transfer or who has been added or substituted as a party under rule 9 (addition, substitution and removal of parties); ‘practice direction’ means a direction given under section 23 of the 2007 Act; ‘respondent’ means— (a) in an application for permission to appeal or in an appeal against a decision of a tribunal, any person other than the applicant or the appellant who was a party in the proceedings before that tribunal and who— (i) was present or represented at the hearing before that tribunal; or (ii) where the proceedings were determined without a hearing, made representations in writing to that tribunal, unless the person has ceased to be a respondent under rule 25(2) (respondent’s notice); (b) a person added or substituted as a respondent under rule 9 (addition, substitution and removal of parties); and (c) in a reference made under Part 5 (references) by consent, any person other than the claimant; ‘Tribunal’ means the Lands Chamber of the Upper Tribunal.

2 Overriding objective and parties’ obligation to co-operate with the Tribunal (1) The overriding objective of these Rules is to enable the Tribunal to deal with cases fairly and justly. 860

Appendix 4 (2) Dealing with a case fairly and justly includes— (a) dealing with the case in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties; (b) avoiding unnecessary formality and seeking flexibility in the proceedings; (c) ensuring, so far as practicable, that the parties are able to participate fully in the proceedings; (d) using any special expertise of the Tribunal effectively; and (e) avoiding delay, so far as compatible with proper consideration of the issues. (3) The Tribunal must seek to give effect to the overriding objective when it— (a) exercises any power under these Rules; or (b) interprets any rule or practice direction. (4) Parties must— (a) help the Tribunal to further the overriding objective; and (b) co-operate with the Tribunal generally.

3  Alternative dispute resolution and arbitration (1) The Tribunal should seek, where appropriate— (a) to bring to the attention of the parties the availability of any appropriate alternative procedure for the resolution of the dispute; and (b) if the parties wish and provided that it is compatible with the overriding objective, to facilitate the use of the procedure. (2) Except where rule 30 (references by consent: application of the Arbitration Act 1996) applies, Part 1 of the Arbitration Act 1996 does not apply to proceedings before the Tribunal.

PART 2 General Powers and Provisions 4  Delegation to staff (1) Staff appointed under section 40(1) of the 2007 Act (tribunal staff and services) may, with the approval of the Senior President of Tribunals, carry out functions of a judicial nature permitted or required to be done by the Tribunal. (2) The approval referred to at paragraph (1) may apply generally to the carrying out of specified functions by members of staff of a specified description in specified circumstances. (3) Within 14 days after the date on which the Tribunal sends notice of a decision made by a member of staff under paragraph (1) to a party, that party may apply in writing to the Tribunal for that decision to be considered afresh by a judge. 861

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5  Case management powers (1) Subject to the provisions of the 2007 Act and any other enactment, the Tribunal may regulate its own procedure. (2) The Tribunal may give a direction in relation to the conduct or disposal of proceedings at any time, including a direction amending, suspending or setting aside an earlier direction. (3) In particular, and without restricting the general powers in paragraphs (1) and (2), the Tribunal may— (a) extend or shorten the time for complying with any rule or practice direction and order an extension even if the application for an extension is not made until after the time limit has expired; (b) consolidate or hear together two or more sets of proceedings or parts of proceedings raising common issues, or treat a case as a lead case; (c) permit or require a party to amend a document; (d) permit or require a party or another person to provide documents, information, evidence or submissions to the Tribunal or a party; (e) deal with an issue in the proceedings as a separate or preliminary issue; (f) hold a hearing to consider any matter, including a case management issue; (g) decide the form of any hearing; (h) adjourn or postpone a hearing; (i) require a party to produce a bundle for a hearing; (j) stay proceedings; (k) transfer proceedings to another court or tribunal if that other court or tribunal has jurisdiction in relation to the proceedings and— (i) because of a change of circumstances since the proceedings were started, the Tribunal no longer has jurisdiction in relation to the proceedings; or (ii) the Tribunal considers that the other court or tribunal is a more appropriate forum for the determination of the case; (l) suspend the effect of its own decision pending an appeal or review of that decision; (m) in an appeal, or an application for permission to appeal, against the decision of another tribunal, suspend the effect of that decision pending the determination of the application for permission to appeal, and any appeal; or (n) require any person, body or other tribunal whose decision is the subject of proceedings before the Tribunal to provide reasons for the decision, or other information or documents in relation to the decision or any proceedings before that person, body or tribunal.

6  Procedure for applying for and giving directions (1) The Tribunal may give a direction on the application of one or more of the parties or on its own initiative. 862

Appendix 4 (2) An application for a direction may be made— (a) by sending or delivering a written application to the Tribunal; or (b) orally during the course of a hearing. (3) An application for a direction must include the reason for making that application. (4) If a written application for a direction is made with the consent of every party, it must be accompanied by consents signed by or on behalf of each party. (5) If a written application for a direction is not made with the consent of every party the applicant must provide— (a) a copy of the proposed application to every other party before it is made; and (b) confirmation to the Tribunal that the other parties have been notified that any objection they wish to make to the application must be provided in accordance with paragraph (6). (6) A party who wishes to object to an application for a direction must within 10 days of being sent a copy of the application, send written notice of the objection to the Tribunal and the applicant. (7) Unless the Tribunal considers that there is good reason not to do so, the Tribunal must send written notice of any direction to every party and to any other person affected by the direction. (8) If a party or any other person sent notice of the direction under paragraph (7) wishes to challenge a direction which the Tribunal has given, they may do so by applying for another direction which amends, suspends or sets aside the first direction.

7  Failure to comply with rules etc (1) An irregularity resulting from a failure to comply with any requirement in these Rules, a practice direction or a direction, does not of itself render void the proceedings or any step taken in the proceedings. (2) If any party has failed to comply with a requirement in these Rules, a practice direction or a direction, the Tribunal may, on the application of any party or on its own initiative, take such action as it considers just, which may include— (a) waiving the requirement; (b) requiring the failure to be remedied; (c) exercising its power under section 25 of the 2007 Act (supplementary powers of the Tribunal); or (d) exercising its power under rule 8 (striking out a party’s case). (3) A party will automatically be barred from taking further part in the proceedings or part of the proceedings if that party has failed to comply with a direction that stated that failure by that party to comply with the direction would lead to such a barring of that party. (4) If a party has been barred under paragraph (3), that party may apply to the Tribunal for the lifting of the bar. 863

Appendix 4 (5) An application made under paragraph (4) must be made in writing and received by the Tribunal within 14 days after the date on which the Tribunal sent notification of the bar to the parties. (6) If a party has been barred from taking further part in proceedings under this rule and that bar has not been lifted, the Tribunal need not consider any response or other submission made by that party, and may summarily determine any or all issues against that party.

8  Striking out a party’s case (1) The proceedings, or the appropriate part of them, will automatically be struck out if the appellant, applicant or claimant has failed to comply with a direction that stated that failure by that party to comply with the direction would lead to the striking out of the proceedings or that part of them. (2) The Tribunal must strike out the whole or a part of the proceedings if the Tribunal— (a) does not have jurisdiction in relation to the proceedings or that part of them; and (b) does not exercise its power under rule 5(3)(k)(i) (transfer to another court or tribunal) in relation to the proceedings or that part of them. (3) The Tribunal may strike out the whole or a part of the proceedings if— (a) a party to the proceedings has failed to comply with a direction which stated that failure by that party to comply with the direction could lead to the striking out of the proceedings or part of them; (b) the appellant, applicant or claimant has failed to co-operate with the Tribunal to such an extent that the Tribunal cannot deal with the proceedings fairly and justly; or (c) the Tribunal considers there is no reasonable prospect of the case of the appellant, applicant or claimant, or part of it, succeeding. (4) The Tribunal may not strike out the whole or a part of the proceedings under paragraph (2) or (3)(b) or (c) without first giving the appellant, applicant or claimant an opportunity to make representations in relation to the proposed striking out. (5) If the proceedings have been struck out under paragraph (1) or (3)(a), the appellant, applicant or claimant may apply for the proceedings, or part of them, to be reinstated. (6) An application made under paragraph (5) must be made in writing and received by the Tribunal within 14 days after the date on which the Tribunal sent notification of the striking out to the appellant, applicant or claimant.

9  Addition, substitution and removal of parties (1) The Tribunal may give a direction adding, substituting or removing a party in any proceedings. (2) If the Tribunal gives a direction under paragraph (1) it may give such consequential directions as it considers appropriate. (3) A person who is not a party may apply to the Tribunal to be added or substituted as a party. 864

Appendix 4 (4) If a person who is entitled to be a party to proceedings by virtue of another enactment applies to be added as a party, and the conditions (if any) applicable to that entitlement have been satisfied, the Tribunal must give a direction adding that person as a party.

[10  Orders for costs] [(1) The Tribunal may make an order for costs on an application or on its own initiative. (2) Any order under paragraph (1)— (a) may only be made in accordance with the conditions or in the circumstances referred to in paragraphs (3) to (6); (b) must, in a case to which section 4 of the 1961 Act applies, be in accordance with the provisions of that section. (3) The Tribunal may in any proceedings make an order for costs— (a) under section 29(4) of the 2007 Act (wasted costs) and for costs incurred in applying for an order for such costs; (b) if the Tribunal considers that a party or its representative has acted unreasonably in bringing, defending or conducting the proceedings; or (c) in the circumstances to which paragraph (14) refers. (4) Except in proceedings to which paragraph (5) or (6) apply, the Tribunal may— (a) with the consent of the parties, or (b) where there is a disparity of interest or resources between the parties, direct that an order for costs may be made in the proceedings against one or more of the parties in respect of costs incurred following such a direction. (5) The Tribunal may make an order for costs in judicial review proceedings. (6) The Tribunal may make an order for costs in proceedings— (a) for compensation for compulsory purchase; (b) for injurious affection of land; (c) under section 84 of the Law of Property Act 1925 (discharge or modification of restrictive covenants affecting land); (d) on an appeal from a decision of the Valuation Tribunal for England or the Valuation Tribunal for Wales. (7) Subject to paragraph (3), in proceedings to which paragraph (6) applies, the Tribunal may direct that no order for costs may be made against one or more specified parties in respect of costs subsequently incurred. (8) In proceedings to which paragraph (6) applies, the Tribunal must have regard to the size and nature of the matters in dispute. (9) A person making an application for an order for costs, or a direction regarding costs— (a) must send or deliver a written application to the Tribunal and to the person against whom it is proposed that the order be made; (b) must include in the application, where it is for a direction regarding costs, the person’s reasons why the conditions or circumstances 865

Appendix 4 relevant to making such a direction under paragraph (4) or (7) apply; and (c) may send or deliver with the application a schedule of the costs claimed in sufficient detail to allow summary assessment of such costs by the Tribunal. (10) An application for an order for costs may be made at any time during the proceedings but may not be made later than 14 days after the date on which— (a) the Tribunal sends a decision notice recording the decision which finally disposes of all issues in the proceedings; (b) the Tribunal sends notice under rule 20 (withdrawal) that a withdrawal which ends the proceedings has taken effect; or (c) notice of withdrawal is sent to the Tribunal with the consent of all parties. (11) The Tribunal may not make an order for costs against a person (the ‘paying person’) without first giving that person an opportunity to make representations. (12) The amount of costs to be paid under an order under this rule may be determined by— (a) summary assessment by the Tribunal; (b) agreement of a specified sum by the paying person and the person entitled to receive the costs (the ‘receiving person’); or (c) detailed assessment of the whole or a specified part of the costs (including the costs of the assessment) incurred by the receiving person— (i) on the standard basis; or (ii) on the indemnity basis, if so specified in the costs order, by the Tribunal or by the Senior Courts Costs Office or by a county court; and the Civil Procedure Rules 1998 shall apply, with necessary modifications, to that application and assessment as if the proceedings in the Tribunal had been proceedings in a court to which the Civil Procedure Rules 1998 apply. (13) The Tribunal may order an amount to be paid on account before the costs are assessed. (14) The Tribunal may order a party to pay to another party costs of an amount equal to the whole or part of any fee paid (which has not been remitted by the Lord Chancellor under the Upper Tribunal (Lands Chamber) Fees Order 2009) in the proceedings by that other party that is not otherwise included in an award of costs.]

11 Representatives (1) A party may appoint a representative (whether a legal representative or not) to represent that party in the proceedings. (2) If a party appoints a representative, that party (or the representative if the representative is a legal representative) must send or deliver to the 866

Appendix 4 Tribunal and to each other party to the proceedings written notice of the representative’s name and address. (3) Anything permitted or required to be done by a party under these Rules, a practice direction or a direction may be done by the representative of that party, except signing a witness statement. (4) A person who receives notice of the appointment of a representative— (a) must provide to the representative any document which is required to be provided to the represented party, and need not provide that document to the represented party; and (b) may assume that the representative is and remains authorised as such until they receive written notification that this is not so from the representative or the represented party. (5) At a hearing a party may be accompanied by another person whose name and address has not been notified under paragraph (2) but who, with the permission of the Tribunal, may act as a representative or otherwise assist in presenting the party’s case at the hearing. (6) Paragraphs (2) to (4) do not apply to a person who accompanies a party under paragraph (5). (7) In this rule ‘legal representative’ means a person who, for the purposes of the Legal Services Act 2007, is an authorised person in relation to an activity which constitutes the exercise of a right of audience or the conduct of litigation within the meaning of that Act.

12  Calculating time (1) An act required by these Rules, a practice direction or a direction to be done on or by a particular day must be done by 5 pm on that day. (2) If the time specified by these Rules, a practice direction or a direction for doing any act ends on a day other than a working day, the act is done in time if it is done on the next working day. (3) In this Rule ‘working day’ means any day except a Saturday or Sunday, Christmas Day, Good Friday or a bank holiday under section 1 of the Banking and Financial Dealings Act 1971.

13  Sending and delivery of documents (1) Any document to be provided to the Tribunal under these Rules, a practice direction or a direction must be— (a) sent by pre-paid post or by document exchange, or delivered by hand, to the address of the office of the Tribunal; (b) sent by fax to the fax number of the office of the Tribunal; or (c) sent or delivered by such other method as the Tribunal may permit or direct. (2) Subject to paragraph (3), if a party provides a fax number, email address or other details for the electronic transmission of documents to them, that party must accept delivery of documents by the relevant method. 867

Appendix 4 (3) If a party informs the Tribunal and all other parties that a particular form of communication, other than pre-paid post or delivery by hand, should not be used to provide documents to that party, that form of communication must not be so used. (4) If the Tribunal or a party sends a document to a party or the Tribunal by email or any other electronic means of communication, the recipient may request that the sender provide a hard copy of the document to the recipient. The recipient must make such a request as soon as reasonably practicable after receiving the document electronically. (5) The Tribunal and each party may assume that the address provided by a party or its representative is and remains the address to which documents should be sent or delivered until it receives written notification to the contrary.

14  Waiver or alternative method of service The Tribunal may waive a requirement under these Rules to send or deliver a notice or other document to a person or may make an order for service by an alternative method (whether by advertisement in a newspaper or otherwise) as the Tribunal may think fit— (a) if that person cannot be found after all diligent enquiries have been made; (b) if that person has died and has no personal representative; or (c) if for any other reason a notice or other document cannot readily be sent or delivered to that person in accordance with these Rules.

15  Use of documents and information The Tribunal may make an order prohibiting the disclosure or publication of— (a) specified documents or information relating to the proceedings; or (b) any matter likely to lead members of the public to identify any person whom the Tribunal considers should not be identified.

16  Evidence and submissions (1) Without restriction on the general powers in rule 5(1) and (2) (case management powers), the Tribunal may give directions as to— (a) issues on which it requires evidence or submissions; (b) the nature of the evidence or submissions it requires; (c) whether the parties are permitted to provide expert evidence, and if so whether the parties must jointly appoint a single expert to provide such evidence; (d) any limit on the number of witnesses whose evidence a party may put forward, whether in relation to a particular issue or generally; (e) the manner in which any evidence or submissions are to be provided, which may include a direction for them to be given— (i) 868

orally at a hearing; or

Appendix 4 (ii) by written submission or witness statement; and (f) the time by which any evidence or submissions are to be provided. (2) The Tribunal may— (a) admit evidence whether or not— (i) the evidence would be admissible in a civil trial in England or Wales; or (ii) the evidence was available to a previous decision maker; or (b) exclude evidence that would otherwise be admissible where— (i) the evidence was not provided within the time allowed by a direction or a practice direction; (ii) the evidence was otherwise provided in a manner that did not comply with a direction or a practice direction; or (iii) it would otherwise be unfair to admit the evidence. (3) The Tribunal may consent to a witness giving, or require any witness to give, evidence on oath, and may administer an oath for that purpose. (4) A witness statement must contain the words ‘I believe that the facts stated in this witness statement are true’, and be signed by the person who makes it. (5) Where a witness who has made a witness statement is called to give oral evidence, their witness statement shall stand as their evidence in chief unless the Tribunal directs otherwise, but the witness may with the permission of the Tribunal— (a) amplify the witness statement they have made; and (b) give evidence in relation to new matters which have arisen since the witness statement was provided to the other parties.

17  Expert evidence (1) It is the duty of an expert to help the Tribunal on matters within the expert’s expertise and this duty overrides any obligation to the person from whom the expert has received instructions or by whom the expert is paid. (2) Subject to paragraph (3), no party may call more than one expert witness without the permission of the Tribunal. (3) In proceedings relating to mineral valuations or business disturbance, no party may call more than two expert witnesses without the permission of the Tribunal. (4) Expert evidence is to be given in a written report unless the Tribunal directs otherwise. (5) A written report of an expert must— (a) contain a statement that the expert understands the duty in paragraph (1) and has complied with it, (b) contain the words ‘I believe that the facts stated in this report are true and that the opinions expressed are correct’, (c) comply with the requirements of any practice direction as regards its form and contents, and (d) be signed by the expert. 869

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18 Summoning of witnesses and orders to answer questions or produce documents (1) On the application of a party or on its own initiative, the Tribunal may— (a) by summons, require any person to attend as a witness at a hearing at the time and place specified in the summons; and (b) order any person to answer any questions or produce any documents in that person’s possession or control which relate to any issue in the proceedings. (2) A summons under paragraph (1)(a) must—

(3) (4) (5) (6)

(a) give the person required to attend 14 days’ notice of the hearing or such shorter period as the Tribunal may direct; and (b) where the person is not a party, make provision for the person’s necessary expenses of attendance to be paid, and state who is to pay them. No person may be compelled to give any evidence or produce any document that the person could not be compelled to give or produce on a trial of an action in a court of law. A person who receives a summons or order may apply to the Tribunal for it to be varied or set aside if they did not have an opportunity to object to it before it was made or issued. A person making an application under paragraph (4) must do so as soon as reasonably practicable after receiving notice of the summons or order. A summons or order under this rule must— (a) state that the person on whom the requirement is imposed may apply to the Tribunal to vary or set aside the summons or order, if they did not have an opportunity to object to it before it was made or issued; and (b) state the consequences of failure to comply with the summons or order.

19  Site inspections (1) Subject to paragraph (2), the Tribunal may, with the consent of the occupier, enter and inspect— (a) the land or property that is the subject of the proceedings; and (b) as far as practicable, any other land or property relevant to the proceedings to which the attention of the Tribunal is drawn. (2) If the Tribunal proposes to enter any premises under paragraph (1) it must— (a) give reasonable notice to the occupier of the premises; and (b) give notice to the parties of the proposed inspection.

870

Appendix 4

20 Withdrawal (1) Subject to paragraph (2), a party may give notice of the withdrawal of its case, or any part of it— (a) … by sending or delivering to the Tribunal and all other parties a written notice of withdrawal; or (b) orally at a hearing. (2) Notice of withdrawal will not take effect unless the Tribunal consents to the withdrawal. (3) The requirement in paragraph (2) does not apply to— (a) an application for permission to appeal; or (b) a notice of withdrawal to which all the parties to the proceedings consent. (4) A party which has withdrawn its case or part of it may apply to the Tribunal for the case to be reinstated. (5) An application under paragraph (4) must be made in writing and be received by the Tribunal within 1 month after— (a) the date on which the Tribunal received the notice under paragraph (1)(a); or (b) the date of the hearing at which the case (or part of it) was withdrawn orally under paragraph (1)(b). Amendment Para (1): in sub-para (a) words omitted revoked by SI 2013/1188, rr 2, 4. Date in force: 1 July 2013: see SI 2013/1188, r 1; for transitional provision see r 10 thereof.

PART 3 Applications for Permission to Appeal 21  Application to the Tribunal for permission to appeal (1) Where permission to appeal to the Tribunal against the decision of another tribunal is required, a person may apply to the Tribunal for permission to appeal to the Tribunal against such a decision only if— (a) they have made an application for permission to appeal to the tribunal which made the decision challenged; and (b) that application has been refused or has not been admitted. (2) An application for permission to appeal must be made in writing and received by the Tribunal no later than 14 days after the date on which the tribunal that made the decision under challenge sent notice of its refusal of permission to appeal or refusal to admit the application for permission to appeal[, or sent notice that permission has been granted only on limited grounds,] to the applicant.

871

Appendix 4 (3) The application must be signed and dated and must state— (a) the name and address of the applicant and, if represented,— (i) the name and address of the applicant’s representative; and (ii) the professional capacity, if any, in which the applicant’s representative acts; (b) an address where documents for the applicant may be sent or delivered; (c) details (including the full reference) of the decision challenged; (d) the grounds of appeal on which the applicant relies; (e) the name and address of each respondent; and (f) whether the applicant wants the application to be dealt with at a hearing. (4) The applicant must provide with the application— (a) a copy of— (i) any written record of the decision being challenged; (ii) any separate written statement of reasons for that decision; (iii) the notice of refusal of permission to appeal or refusal to admit the application for permission to appeal from the other tribunal; and (iv) any other document relied on in the application to the Tribunal; and (b) the fee payable to the Tribunal. (5) If the applicant provides the application to the Tribunal later than the time required by paragraph (2) or by an extension of time allowed under rule 5(3)(a) (power to extend time)— (a) the application must include a request for an extension of time and the reason why the application was not provided in time; and (b) unless the Tribunal extends time for the application under rule 5(3)(a) (power to extend time), the Tribunal must not admit the application. (6) If the tribunal that made the decision under challenge refused to admit the applicant’s application for permission to appeal because the application for such permission or for a written statement of reasons was not made in time— (a) the application to the Tribunal must include the reason why the application to the other tribunal for permission to appeal or for a written statement of reasons, as the case may be, was not made in time; and (b) the Tribunal must only admit the application if the Tribunal considers that it is in the interests of justice for it to do so. (7) The applicant must send or deliver to the Tribunal with the application for permission sufficient copies of the application and accompanying documents for service on the respondent. (8) Unless it decides to dismiss the application without representations from the respondent, the Tribunal must send or deliver a copy of the application

872

Appendix 4 and accompanying documents to the respondent, and must specify a time limit within which any representations relating to the application must be made. Amendment Para (2): words ‘, or sent notice that permission has been granted only on limited grounds,’ in square brackets inserted by SI 2014/514, rr 14, 15. Date in force: 6 April 2014: see SI 2014/514, r 1.

22 Respondent’s representations in relation to permission to appeal (1) A respondent who wishes to make representations in relation to the application— (a) must do so in writing within the time limit specified under rule 21(8); (b) may include an application for permission to cross-appeal if the applicant is granted permission to appeal; (c) must at the same time send a copy of the representations and any application to all the other parties and inform the Tribunal in writing that this has occurred; and (d) must state whether the respondent wants the application to be dealt with at a hearing. (2) An application for permission to cross-appeal under paragraph (1)(b) must state the grounds on which the application is made and must include a copy of any document relied on in the application.

23  Decision in relation to permission to appeal (1) The Tribunal may give permission to appeal with such limitations or conditions as the Tribunal thinks fit. (2) If the Tribunal refuses permission to appeal, it must send written notice of the refusal and of the reasons for the refusal to the applicant. (3) If the Tribunal gives permission to appeal— (a) the Tribunal must send written notice of the permission, and of the reasons for any limitations or conditions on such permission, to each party; (b) subject to any direction by the Tribunal, the application for permission to appeal stands as the notice of appeal; and (c) the Tribunal may, with the consent of the parties, determine the appeal without further representations. (4) In this rule, references to appeals include cross-appeals where appropriate.

873

Appendix 4

PART 4 Appeals 24  Notice of appeal (1) This rule applies— (a) if another tribunal has given permission for a party to appeal to the Tribunal; (b) if permission to appeal against the decision of another tribunal is not required; or (c) subject to any other direction by the Tribunal, if the Tribunal has given permission to appeal and has given a direction that the application for permission to appeal does not stand as the notice of appeal. (2) Unless some other time limit is prescribed by or under another enactment, the appellant must provide a notice of appeal to the Tribunal so that it is received within 1 month after— (a) the date that the tribunal that gave permission to appeal sent notice of such permission to the appellant; or (b) the date on which the notice of decision to which the appeal relates was sent to the appellant, if permission to appeal is not required. (3) The notice of appeal must be signed and dated and must include the information listed in rule 21(3) (content of the application for permission to appeal). (4) If another tribunal has given permission to appeal, or if permission is not required, the appellant must provide with the notice of appeal— (a) a copy of— (i) (ii) (iii) (iv)

any written record of the decision being challenged; any separate written statement of reasons for that decision; any notice of permission to appeal; and if the appeal is against the decision of the Valuation Tribunal for England or [the Valuation Tribunal for Wales], a copy of the proposal or determination that was the subject of the appeal to that tribunal; and (b) the fee payable to the Tribunal. (5) If the appellant provides the notice of appeal to the Tribunal later than the time required by paragraph (2)— (a) the notice of appeal must include a request for an extension of time and the reasons why the notice was not provided in time; and (b) unless the Tribunal extends time for the notice of appeal under rule 5(3)(a) (power to extend time) the Tribunal must not admit the notice of appeal. (6) The appellant must send or deliver to the Tribunal with the notice of appeal sufficient copies of the notice and accompanying documents for each respondent. 874

Appendix 4 (7) When the Tribunal receives the notice of appeal it must send a copy of the notice and any accompanying documents to each respondent. Amendment Para (4): in sub-para (a)(iv) words ‘the Valuation Tribunal for Wales’ in square brackets substituted by SI 2012/500, r 6(1), (2). Date in force: 6 April 2012: see SI 2012/500, r 1(2).

25  Respondent’s notice (1) A respondent may provide a respondent’s notice to an appeal. (2) A respondent shall, unless given permission to cross-appeal, cease to be a respondent if no respondent’s notice is provided within the time specified in paragraph (3) or such further time as may be allowed under rule 5(3)(a) (power to extend time). (3) Any respondent’s notice must be in writing and must be sent or delivered to the Tribunal and the appellant so that it is received no later than 1 month after the date on which the Tribunal sent— (a) notice that it had given permission to appeal to the respondent; or (b) a copy of the notice of appeal to the respondent. (4) The respondent’s notice must be signed and dated and must state— (a) the name and address of the respondent and, if represented,— (i) the name and address of the respondent’s representative; and (ii) the professional capacity, if any, in which the respondent’s representative acts; (b) an address where documents for the respondent may be sent or delivered; (c) the grounds on which the respondent relies in opposing the appeal or in support of a cross-appeal; and (d) whether the respondent wants the case to be dealt with at a hearing. (5) If the respondent provides a respondent’s notice to the Tribunal later than the time required by paragraph (2), the notice must include a request for an extension of time and the reasons why the notice was not provided in time. (6) If, in any proceedings, the Tribunal receives a respondent’s notice from more than one respondent, it must send a copy of each notice received to each of the other respondents.

26  Appellant’s reply (1) Subject to any direction given by the Tribunal, the appellant may provide a reply to any respondent’s notice provided under rule 25 (respondent’s notice). (2) Any reply provided under paragraph (1) must be in writing and must be sent or delivered to the Tribunal and every respondent so that it is received within 1 month after the date on which the relevant respondent sent the respondent’s notice to the appellant. 875

Appendix 4

PART 5 References [Omitted – irrelevant to section 84 applications]

PART 6 Applications Under Section 84 of the Law of Property Act 1925 (Discharge or Modification of Restrictive Covenants Affecting Land) 31 Interpretation In this Part— ‘application land’ means the land to which the application relates; ‘section 84’ means section 84 of the Law of Property Act 1925; and ‘restriction’ means a restriction, arising under a covenant or otherwise, as to the user of or building on any freehold land or any leasehold land held for a term of more than 40 years of which at least 25 have expired.

32  Method of making application (1) An application under section 84 is made by sending or delivering to the Tribunal an application which must be signed and dated and must state— (a) the name and address of the applicant and, if represented,—

(b) (c) (d) (e) (f) (g)

(h) (i)

876

(i) the name and address of the applicant’s representative; and (ii) the professional capacity, if any, in which the applicant’s representative acts; an address where documents for the applicant may be sent or delivered; the address or description of the application land; the nature of the applicant’s interest in the application land; the name of any other person with an interest in the application land and the nature of their interest; the address or description of the land which is subject to the restriction; the address or description of the land which, and the identity of any person (if known) who has the benefit of the restriction, or any person who the applicant believes may have such benefit and the reasons for that belief; the ground or grounds in section 84 on which the applicant relies and the reasons for considering that that ground or those grounds apply; whether the applicant is applying to discharge or modify the restriction, in which case details of the discharge or modification sought must also be provided; and

Appendix 4 (j) details of any planning permission in respect of the application land that has been applied for, granted or refused within the 5 years preceding the application. (2) The applicant must provide with the application— (a) a copy of the instrument imposing the restriction and any attached plan coloured in accordance with the original or, if the instrument cannot be found, other documentary evidence of the restriction; (b) a plan identifying— (i) the application land; (ii) if ascertainable, any additional land which is subject to the restriction; and (iii) the land which has the benefit of the restriction; and (c) the fee payable to the Tribunal. (3) An application may be made jointly by two or more persons if the land in which they are interested is the same land or different parts of the land affected by the restriction.

33  Notices to be given (1) Upon receipt of an application, the Tribunal must send written directions to the applicant specifying— (a) what notices are to be given to persons who appear to be entitled to the benefit of the restriction; (b) the time within which such notices are to be given; and (c) whether such notices should be given by advertisement or otherwise. (2) The notices must require any person who claims to be entitled to the benefit of the restriction, who objects to the discharge or modification of it proposed by the application, or who claims compensation for such modification or discharge, to send to the Tribunal and to the applicant notice of any objections they may have and of the amount of compensation they claim, if any. (3) The notices to be given under paragraph (1) must be given by the applicant who, as soon as reasonably practicable after the end of the period for sending or delivering a notice of objection in rule 34(1) (notice of objection), must certify in writing to the Tribunal that directions as to the giving of those notices have been complied with.

34  Notice of objection (1) Notice of an objection to an application and any claim for compensation must be in writing and must be sent or delivered to the Tribunal and the applicant so that it is received by the Tribunal within 1 month from the giving of the notices referred to in rule 33(1) (notices to be given).

877

Appendix 4 (2) The notice of objection must be signed and dated and must state— (a) the name and address of the objector and, if represented,—

(b) (c) (d) (e)

(i) the name and address of the objector’s representative; and (ii) the professional capacity, if any, in which the objector’s representative acts; an address where documents for the objector may be sent or delivered; the basis upon which the objector claims to be entitled to the benefit of the restriction; any ground of objection; and whether the objector wants the case to be determined at a hearing.

35  Admission of objectors (1) Within 14 days of receipt of a notice of objection, if the applicant does not accept that the objector is entitled to the benefit of the restriction, the applicant must send or deliver to the Tribunal and the objector a notice stating why the applicant does not accept that the objector is entitled to the benefit of the restriction. (2) Any objector to whom the applicant does not send or deliver a notice under paragraph (1) shall be admitted to oppose the application. (3) An objector who receives a notice from the applicant under paragraph (1) must within 14 days send or deliver to the Tribunal and the applicant evidence of their entitlement to the benefit of the restriction. (4) Within 14 days of receipt of evidence under paragraph (3) the applicant must inform the Tribunal and the objector whether the applicant accepts that the objector is entitled to the benefit of the restriction. (5) As soon as practical after receipt of a notice under paragraph (4) that the applicant does not accept the evidence of entitlement, but after giving to the applicant and the objector the opportunity to be heard, the Tribunal must determine whether the objector should be admitted to oppose the application and notify the applicant and the objector of its determination. (6) Where an objector who has not been admitted to oppose the application is dissatisfied with the determination of the Tribunal under paragraph (5) and notifies the Tribunal within 14 days of the date of that determination that the objector has applied to the court under subsection (2) of section 84 to declare who, if anyone, is entitled to enforce the restriction, the Tribunal must stay the proceedings until that application is determined or withdrawn. (7) Following any declaration made by the court as to who, if anyone, is entitled to enforce the restriction, the Tribunal may set aside a determination made under paragraph (5) and make a new determination.

36  Statements of case If an objector has been admitted to oppose the application, the Tribunal must direct either— (a) that the applicant and each objector, within such periods as are stated in the direction, send or deliver to the Tribunal and each other party a statement of case; or 878

Appendix 4 (b) that the application and each notice of objection shall stand as the statement of case of the party that made the application or gave such notice.

37  Power to direct additional notices If it appears to the Tribunal at any time before the determination of the application that any person who has not received notice of the application otherwise than by advertisement should have received specific notice, the Tribunal may require the applicant to give notice to that person and give such case management directions as may be appropriate.

38  Enquiries of local authorities If before or at the hearing of an application the Tribunal considers that enquiries should be made at any local authority within whose area the land affected by the restriction is situated, the Tribunal may direct those enquiries to be made and give such case management directions as may be appropriate.

39  Orders where compensation is payable Where the Tribunal orders the discharge or modification of a restriction subject to the payment of compensation— (a) the discharge or modification shall not take effect until the Tribunal has endorsed on the order that the compensation has been paid; and (b) the Tribunal may direct that the order shall cease to have effect if the compensation is not paid within a specified time.

PART 7 Applications Under Section 2 of the Rights of Light Act 1959 [Omitted – irrelevant to section 84 applications]

PART 8 [Cases Transferred to the Tribunal, Including Judicial Review Proceedings] [Omitted – irrelevant to section 84 applications]

PART 9 Hearings 46  Decision with or without a hearing (1) Subject to paragraph (2), the Tribunal may make any decision without a hearing. 879

Appendix 4 (2) The Tribunal must have regard to any view expressed by a party when deciding whether to hold a hearing to consider any matter, and the form of any such hearing.

47  Notice of hearings (1) The Tribunal must give each party reasonable notice of the time and place of any hearing and any change to the time and place of the hearing. (2) The period of notice under paragraph (1) must be at least 14 days except that the Tribunal may give shorter notice— (a) with the parties’ consent; or (b) in urgent or exceptional cases.

48  Public and private hearings (1) Subject to the following paragraphs, all hearings must be held in public. (2) Subject to paragraph (6), each party is entitled to attend a hearing. (3) Except in a compulsory purchase compensation reference, the Tribunal may give a direction that a hearing, or part of it, is to be held in private. (4) If the Tribunal is acting as an arbitrator in a reference by consent under section 1(5) of the 1949 Act, any hearing must be held in private unless the parties agree otherwise. (5) Where a hearing, or part of it, is to be held in private, the Tribunal may determine who is entitled to attend the hearing or part of it. (6) The Tribunal may give a direction excluding from any hearing, or part of it, any person whose conduct the Tribunal considers is disrupting or is likely to disrupt the hearing. (7) The Tribunal may give a direction excluding a witness from a hearing until that witness gives evidence. (8) In this rule, ‘compulsory purchase compensation reference’ means a reference of a question to the Tribunal— (a) under section 1 of the 1961 Act; (b) under section 11(4) of the Compulsory Purchase (Vesting Declarations) Act 1981; or (c) to which the provisions of section 4 of the 1961 Act apply, with the exception of references— (i) under section 16(7) of the City of London (Various Powers) Act 1967; (ii) under section 307(1) of the Highways Act 1980; and (iii) under regulation 96(2) of the Conservation (Natural Habitats, &c) Regulations 1994.

880

Appendix 4

49  Hearings in a party’s absence If a party fails to attend a hearing, the Tribunal may proceed with the hearing if the Tribunal— (a) is satisfied that the party has been notified of the hearing or that reasonable steps have been taken to notify the party of the hearing; and (b) considers that it is in the interests of justice to proceed with the hearing.

PART 10 Decisions 50  Consent orders (1) The Tribunal may, at the request of the parties but only if it considers it appropriate, make a consent order disposing of the proceedings and making such other appropriate provision as the parties have agreed. (2) Notwithstanding any other provision of these Rules, the Tribunal need not hold a hearing before making an order under paragraph (1).

51 Decisions (1) The Tribunal may give a decision orally at a hearing. (2) The Tribunal must provide to each party as soon as reasonably practicable after making a decision which finally disposes of all issues in the proceedings or a separate or preliminary issue (except a decision under Part 11 (correcting, setting aside, reviewing and appealing decisions of the Tribunal))— (a) a decision notice stating the Tribunal’s decision; and (b) notification of any rights of review or appeal against the decision and the time and manner in which such rights of review or appeal may be exercised. (3) The Tribunal must provide written reasons for its decision with a decision notice provided under paragraph (2)(a) unless— (a) the decision was made with the consent of the parties; or (b) the parties have consented to the Tribunal not giving written reasons. (4) The Tribunal may provide written reasons for any decision to which paragraph (2) does not apply.

[51A Interest] [(1) Where the decision of the Tribunal provides for a sum to be payable, including a sum awarded in respect of costs of the proceedings before the Tribunal, the provisions listed in paragraph (2) apply, with necessary modifications, as if the proceedings in the Tribunal were proceedings in a court to which those provisions apply. 881

Appendix 4 (2) The provisions to which paragraph (1) refers are— (a) section 35A of the Senior Courts Act 1981; (b) section 74 of the County Courts Act 1984; (c) section 17 of the Judgments Act 1838; (d) the County Courts (Interest on Judgment Debts) Order 1991.] Amendment Inserted by SI 2013/1188, rr 2, 8. Date in force: 1 July 2013: see SI 2013/1188, r 1; for transitional provision see r 10 thereof.

PART 11 Correcting, Setting Aside, Reviewing and Appealing Decisions of the Tribunal 52 Interpretation In this Part— ‘appeal’ means the exercise of a right of appeal under section 13 of the 2007 Act; and ‘review’ means the review of a decision by the Tribunal under section 10 of the 2007 Act.

53  Clerical mistakes and accidental slips or omissions The Tribunal may at any time correct any clerical mistake or other accidental slip or omission in a decision or record of a decision by— (a) sending notification of the amended decision, or a copy of the amended record, to all parties; and (b) making any necessary amendment to any information published in relation to the decision or record.

54  Setting aside a decision which disposes of proceedings (1) The Tribunal may set aside a decision which disposes of proceedings, or part of such a decision, and re-make the decision or the relevant part of it, if— (a) the Tribunal considers that it is in the interests of justice to do so; and (b) one or more of the conditions in paragraph (2) are satisfied. (2) The conditions are— (a) a document relating to the proceedings was not sent or delivered to, or was not received at an appropriate time by, a party or a party’s representative; (b) a document relating to the proceedings was not sent or delivered to the Tribunal at an appropriate time; 882

Appendix 4 (c) a party, or a party’s representative, was not present at a hearing related to the proceedings; or (d) there has been some other procedural irregularity in the proceedings. (3) A party applying for a decision or part of a decision to be set aside under paragraph (1) must send a written application to the Tribunal and all other parties so that it is received no later than 1 month after the date on which the Tribunal sent notice of the decision to the party.

55  Application for permission to appeal (1)

A person seeking permission to appeal from the decision of the Tribunal must make a written application to the Tribunal for permission to appeal. (2) The application must be sent or delivered to the Tribunal so that it is received within 1 month after the latest of the dates on which the Tribunal sent to the person making the application— [(za) the relevant decision notice; (a) written reasons for the decision, if the decision disposes of— (i) all issues in the proceedings; or (ii) subject to paragraph (2A), a separate or preliminary issue dealt with following a direction under rule 5(3)(e);] (b) notification of a decision to award, or refuse to award, costs; (c) notification of amended reasons for, or correction of, the decision following a review; (d) notification that an application for the decision to be set aside has been unsuccessful. [(2A) The Tribunal may direct that the 28 days within which a party may send or deliver to the Tribunal an application for permission to appeal against a decision that disposes of a separate or preliminary issue shall run from the date of the decision that disposes of all issues in the proceedings.] (3) The date in paragraph (2)(b) applies only if the application for costs was made within the time stipulated in [rule 10(10)] (orders for costs). (4) The date in paragraph (2)(d) applies only if the application for the decision to be set aside was made within the time stipulated in rule 54 (setting aside a decision which disposes of proceedings) or any extension of that time granted by the Tribunal. (5) If the person seeking permission to appeal provides the application to the Tribunal later than the time required— (a) the application must include a request for an extension of time and the reason why the application notice was not provided in time; and (b) unless the Tribunal extends time for the application under rule 5(3) (a) (power to extend time) the Tribunal must refuse the application. (6) The application must— (a) identify the decision of the Tribunal to which it relates; (b) identify the alleged error or errors of law in the decision; and (c) state the result the party making the application is seeking. 883

Appendix 4 Amendment Para (2): sub-paras (za), (a) substituted, for sub-para (a) as originally enacted, by SI 2013/1188, rr 2, 9(a). Date in force: 1 July 2013: see SI 2013/1188, r 1; for transitional provision see r 10 thereof. Para (2A): inserted by SI 2013/1188, rr 2, 9(b). Date in force: 1 July 2013: see SI 2013/1188, r 1; for transitional provision see r 10 thereof. Para (3): words ‘rule 10(10)’ in square brackets substituted by SI 2013/1188, rr 2, 9(c). Date in force: 1 July 2013: see SI 2013/1188, r 1; for transitional provision see r 10 thereof.

56 Tribunal’s consideration of application for permission to appeal (1) On receiving an application for permission to appeal the Tribunal may review the decision in accordance with rule 57 (review of a decision), but may only do so if— (a) when making the decision the Tribunal overlooked a legislative provision or binding authority which could have had a material effect on the decision; or (b) since the Tribunal’s decision, a court has made a decision which is binding on the Tribunal and which, had it been made before the Tribunal’s decision, could have had a material effect on the decision. (2) If the Tribunal decides not to review the decision, or reviews the decision and decides to take no action in relation to the decision or part of it, the Tribunal must consider whether to give permission to appeal in relation to the decision or that part of it. (3) The Tribunal must send a record of its decision to the parties as soon as practicable. (4) If the Tribunal refuses permission to appeal it must send with the record of its decision— (a) a statement of its reasons for such refusal; and (b) notification of the right to make an application to the relevant appellate court for permission to appeal and the time within which, and the method by which, such application must be made. (5) The Tribunal may give permission to appeal on limited grounds, but must comply with paragraph (4) in relation to any grounds on which it has refused permission.

57  Review of a decision (1) The Tribunal may only undertake a review of a decision pursuant to rule 56(1) (Tribunal’s consideration of application for permission to appeal). (2) The Tribunal must notify the parties in writing of the outcome of any review and of any rights of review or appeal in relation to the outcome. 884

Appendix 4 (3) If the Tribunal decides to take any action in relation to a decision following a review without first giving every party an opportunity to make representations, the notice under paragraph (2) must state that any party that did not have an opportunity to make representations may apply for such action to be set aside and for the decision to be reviewed again.

58 Power to treat an application as a different type of application The Tribunal may treat an application for a decision to be corrected, set aside or reviewed, or for permission to appeal against the decision, as an application for any other one of those things.

PART 12 Revocations and Transitional Provision 59 Revocations The Lands Tribunal Rules 1996 are revoked.

60  Transitional provision In proceedings which were started before 29th November 2010, the Tribunal may give any direction to ensure that the proceedings are dealt with fairly and, in particular, may— (a) apply any provision of the Lands Tribunal Rules 1996 which applied to the proceedings before 29th November 2010; and (b) disapply provisions of these Rules.

885

886

Appendix 5 Practice Directions

LANDS CHAMBER OF THE UPPER TRIBUNAL © Crown copyright Published by the Ministry of Justice, 29 November 2010 1. Commencement, application and interpretation 1.1 These Practice Directions— (a) apply to proceedings before the Lands Chamber of the Upper Tribunal; (b) come into force on 29 November 2010; (c) supplement the Rules and must be read in conjunction with them. 1.2 In these Practice Directions— (a) “the Rules” means the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010; (b) “rule”, followed by a number, means the rule bearing that number in the Rules. 2. Alternative dispute resolution 2.1 Stay of proceedings (1) Parties may apply at any time for a short stay in the proceedings to attempt to resolve their differences, in whole or in part, outside the Tribunal process. No fee is payable. On receipt of a joint or consent application made in accordance with rule 6 the Tribunal will by order stay proceedings for a six week period (or such other period as may be specified in the order) for mediation or other form of alternative dispute resolution, ADR, procedure to be followed. (2) The parties may apply for a second or longer stay in the proceedings for ADR. The fee for an interlocutory application must be paid and the parties must satisfy the Tribunal that an additional or longer stay of proceedings would be appropriate. 2.2 Costs In exercising its power to order that any or all of the costs of any proceedings incurred by one party be paid by another party or by their legal or other representative the Tribunal may consider whether a party has unreasonably refused to consider ADR when deciding what costs order to make, even when the refusing party is otherwise successful. 887

Appendix 5 3. Case management 3.1 Introduction (1) Every case will be assigned to one of the following four procedures as soon as the Tribunal has sufficient information: (a) the standard procedure; (b) the simplified procedure; (c) the special procedure; (d) the written representations procedure. (2) When filing a notice of appeal under rule 24; a respondent’s notice under rule 25; a notice of reference under rule 28; or a response to a notice of reference under rule 29, a party should state which procedure it considers should be followed. The Tribunal will take account of the parties’ views when assigning the case. At any time a Registrar or the Judge or Member to whom a case has been allocated for case management may direct that it should be assigned to one of the other procedures. 3.2 Standard procedure The standard procedure applies in all cases not assigned to one of the other procedures. For the standard procedure case management will be in the hands of the Registrars who will give such directions as appear to be necessary. Directions given may, as appropriate, use elements of the special procedure (for example, timetabling through to the hearing dat(e) or the simplified procedure. A Registrar will hold a case- management hearing should it appear appropriate to do so taking any views expressed by the parties into account. Each party should also consider the matters referred to in paragraph 3.4(2) below. 3.3 Simplified procedure (1) The simplified procedure provides for the speedy and economical determination of cases in which no substantial issue of law or of valuation practice or conflict of fact is likely to arise. It is often suitable where the amount at stake is small. It will not normally be appropriate for cases involving more than one expert witness. (2) The objective is to move to a hearing as quickly as possible and with the minimum of formality and cost. In most cases a date for the hearing, normally about 3 months ahead, will be fixed immediately. Statements of case will be required in accordance with section 6 below. The hearing will be informal and strict rules of evidence will not apply. It will almost always be completed in a single day. ((3) Not later than 1 month before the hearing, the parties must exchange copies of all documents on which they intend to rely. Not later than 14 days before the hearing each party must file and exchange— (i) an expert’s report, if they intend to rely on expert evidence; and (ii) a list of the witnesses they intend to call at the hearing. (4) In a case to which section 4 of the Land Compensation Act 1961 or section 175(6) or (7) applies any order in relation to the costs of the

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Appendix 5 proceedings will be made in accordance with the applicable statutory provision. In all other cases no costs order will be made unless the Tribunal— (i) considers it appropriate to take the making of an offer of settlement by a party into account; (ii) regards the circumstances as exceptional; or (iii) considers a wasted costs order should be made. If an award of costs is made, the amount will not exceed the amount that would be allowed in proceedings in a county court. 3.4 Special procedure (1) A case will be assigned to the special procedure if it requires case management by a Judge or Member in view of its complexity, the amount in issue or its wider importance. Under the special procedure an early case-management hearing will be held for appropriate directions to be given for the fair, expeditious and economical conduct of the proceedings. Where appropriate a date for the final hearing will be fixed at the case-management hearing and the steps which the parties are required to take, and any further case-management hearings, will be timetabled by reference to this date. (2) Each party should consider whether it is appropriate to make application for the determination of a preliminary issue and for permission to call more than the permitted number of expert witnesses. It should also identify, and where necessary make application for, any other order that it wishes the Tribunal to make at the case-management hearing. The parties must seek to agree the terms of any order that they wish the Tribunal to make. (3) Not less than 7 days before a case-management hearing the parties must file an agreed position statement summarising the subjectmatter of the case and, to the extent that it is possible to do so at that stage, the issues. They must also state the areas of expertise of each expert witness that they propose to rely on and the general scope of their evidence. 3.5 Written representation procedure (1) The Tribunal may order that the proceedings be determined without an oral hearing. An order for the written representation procedure to be followed will only be made if the Tribunal, having regard to the issues in the case and the desirability of minimising costs, is of the view that oral evidence and argument can properly be dispensed with. The consent of the parties will usually be required. (2) Directions will be given to the parties relating to the filing of representations and documents and, if necessary, the Judge or Member allocated to the case will seek to carry out a site inspection before giving a written decision. (3) Costs will only be awarded if there has been an unreasonable failure on the part of the claimant to accept an offer to settle, if either party has behaved otherwise unreasonably, or the circumstances are in some other respect exceptional.

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Appendix 5 4. Appeals for which permission is required Permission to appeal is required for an appeal from a leasehold valuation tribunal, LVT, or residential property tribunal, RPT. Permission must be sought from the LVT or RPT concerned. Only if the LVT or RPT refuses permission to appeal may an application for permission to appeal be made to the Tribunal. Permission to appeal from a valuation tribunal in a rating case is not required. 4.1 Time limits (1) If permission to appeal is refused by the LVT or RPT, application for permission to appeal may be made to the Tribunal within 14 days of being sent the decision to refuse permission. (2) An urgency direction may be issued, upon application by a party or by the Tribunal acting on its own initiative, to reduce this time limit (see also paragraph 5.3 below). (3) The Tribunal may extend a time limit but no extension will be given unless there is justification for it. 4.2 Applications for permission to appeal (1) Applicants must specify whether their reasons for making the application fall within one or more of the following categories: (a) The decision shows that the LVT or RPT wrongly interpreted or wrongly applied the relevant law; (b) The decision shows that the LVT or RPT wrongly applied or misinterpreted or disregarded a relevant principle of valuation or other professional practice; (c) The LVT or RPT took account of irrelevant considerations, or failed to take account of relevant consideration or evidence, or there was a substantial procedural defect; and/or (d) The point or points at issue is or are of potentially wide implication. (2) The application must make clear whether the appellant is seeking: (i) an appeal by way of review; (ii) an appeal by way of review, which if successful will involve a consequential re-hearing; or (iii) an appeal by way of re-hearing. (3) If the application does not specify otherwise, the application will be treated as an application for an appeal by way of review. 4.3 Approach of the Tribunal to applications for permission to appeal (1) The Tribunal will determine an application for permission to appeal without a hearing unless it appears to the Tribunal that a hearing is necessary or desirable. Applicants who want the application to be dealt with at a hearing must explain why a hearing is necessary or desirable. (2) The Tribunal will give permission to appeal only where it appears that there are reasonable grounds for concluding that the LVT or RPT may have been wrong for one or more of the reasons (a) to (c) set out in paragraph 4.2 above. In considering whether to give permission 890

Appendix 5 the Tribunal will have regard to the importance of the point to the decision itself and in terms of its wider implications (reason (d) and to the proportionality of an appeal. (3) If the Tribunal gives permission to appeal— (a) It may do so on such conditions as it thinks fit; (b) In view of the limitation on the Tribunal’s power to award costs in an appeal from an LVT contained in the Rules, it will not be appropriate to impose conditions relating to costs in appeals from the LVT. It would, however, be open to an applicant for permission to undertake to pay all or part of a respondent’s costs; (c) It may direct that the appeal is, or any of the issues in the appeal are, to be dealt with by review rather than by rehearing; (d) It may direct that the application for permission to appeal should stand as a notice of appeal. (4) If the Tribunal gives permission to appeal the appeal will proceed unless— (a) permission was given in part only or subject to conditions; and (b) within 14 days of the date that the Tribunal sent notice of the decision to give permission the applicant notifies the Tribunal that the applicant does not wish to proceed with the appeal. 5. Appeals 5.1 Types of appeal (1) When permission to appeal to the Tribunal has been given by another tribunal the notice of appeal must make clear whether the appellant is seeking: (i) an appeal by way of review; (ii) an appeal by way of review, which if successful will involve a consequential re-hearing; or (iii) an appeal by way of re-hearing. (2) If the notice does not specify otherwise, the appeal will be treated as an appeal by way of review. (3) The Tribunal will take into consideration any views the parties have expressed on the type of appeal proceedings but may direct that the appeal or any of the issues in the appeal are to be dealt with by review rather than by rehearing. 5.2 Time limits (1) If the LVT or RPT gives permission to appeal, a notice of appeal must be filed with the Tribunal within 1 month of the date that the decision giving permission to appeal was sent to the appellant. (2) An urgency direction may be issued, upon application by a party or by the Tribunal acting on its own initiative, to reduce this time limit (see also paragraph 5.3 below). (3) The Tribunal may extend a time limit but no extension will be given unless there is justification for it. 891

Appendix 5 5.3 Urgency directions (1) For appeals from the RPT an urgency direction may be issued to shorten the time limits that otherwise apply to the following actions: (a) giving notice to the Tribunal of an appeal when permission to appeal has been given by the RPT (b) filing and serving a respondent’s notice; (c) filing and serving a statement of case. (2) Any urgency direction may also permit the application to the RPT for permission to appeal to stand as notice to the Tribunal of an appeal. (3) An urgency direction may be made by the Tribunal acting on its own initiative or on application by a party. An application for an urgency direction must be made in accordance with the Tribunal procedure for applying for directions. (4) In reaching a decision the Tribunal will take all written representations into account. An urgency direction will not be made unless the Tribunal is satisfied that it is in the interests of justice to do so. 6. Statements of case 6.1 General (1) Each party to an appeal under Part 4 of the Rules, a reference under Part 5 of the Rules or an application under Part 6 of the Rules must provide a statement of its case. (2) The purpose of statements of case is to enable the issues to be determined by the Tribunal to be identified. Each statement of case must therefore set out the basis of fact and of law on which the party relies. It must be in summary form but contain particulars that are sufficient to tell the other party the case that is being advanced and to enable the Tribunal to identify the issues. 6.2 Appeals under Part 4 of the Rules (1) A statement of case must be contained in or be provided with the following: (a) A notice of appeal under rule 24; (b) A respondent’s notice under rule 25. (2) The following provisions of the Rules and these Practice Directions are to be noted in relation to the above: (a) An application to the Tribunal for permission to appeal must contain the grounds of appeal on which the applicant relies (rule 21(3)(d)); (b) A notice of appeal must contain the grounds of appeal on which the appellant relies (rule 24(3) read with rule 21(3)(d)); and, where application to the Tribunal for permission to appeal has been made under rule 21, the application must have stated those grounds (rule 21(3)(d)); (c) An application for permission to appeal may stand as a notice of appeal (Practice Direction 4.3(3)(d)); and (d) A respondent’s notice must contain the grounds on which the respondent relies in opposing the appeal or in support of 892

Appendix 5 a cross-appeal (rule 25(4(c)); and where application to crossappeal has been made under rule 22(2) the application must have stated the grounds on which the application was made. (3) Where any notice of appeal or respondent’s notice does not contain or provide a statement of case that complies with the requirements of paragraph 6.1(2), application must be made at the time the notice or respondent’s notice is provided for an extension of time for providing the statement of case. (4) Where the Tribunal is of the view that any notice or respondent’s notice does not contain or provide a statement of case that complies with the requirements of paragraph 6.1(2) it will order that a statement of case be provided. (5) A party that considers that another party has failed to provide a statement of case that complies with the requirements of paragraph 6.1(2) may apply to the Tribunal for an order that such statement of case be provided, and the Tribunal will decide whether an order should be made. 6.3 References under Part 5 of the Rules (1) A statement of case must be contained in or be provided with the following: (a) A notice of reference under rule 28; and (b) A response to the notice of reference under rule 29; (2) The following provisions of the Rules are to be noted in relation to the above: (a) A notice of reference must contain the matters set out in rule 28(3)(g) and (h); (b) A response to the notice of reference must contain the summary required by rule 29(2)(c) and, where the person making the response is the claimant, the matters set out in rule 29(2)(d); (3) Where any notice or response does not contain or provide a statement of case that complies with the requirements of paragraph 6.1(2) application must be made at the time the notice or response is provided or made for an extension of time for providing the statement of case. (4) Where the Tribunal is of the view that any notice or response does not contain or provide a statement of case that complies with the requirements of paragraph 6.1(2) it will order that a statement of case be provided. (5) A party that considers that another party has failed to provide a statement of case that complies with the requirements of paragraph 6.1(2) may apply to the Tribunal for an order that such statement of case be provided, and the Tribunal will decide whether an order should be made. 6.4 Applications under Part 6 of the Rules (1) A statement of case may be contained in or be provided with: (a) An application under rule 32; and (b) A notice of objection under rule 34. 893

Appendix 5 (2) The following provisions of the Rules are to be noted in relation to the above: (a) An application under Part 6 must contain the matters set out in rule 32(1)(g), (h), (i) and (j); (b) A notice of objection must contain any ground of objection (rule 34(2)(d)); (c) If an objector has been admitted to oppose the application, the Tribunal must either direct that the applicant and each objector shall provide a statement of case or that the application and each notice of objection shall stand as that party’s statement of case (rule 36). 7. Preliminary issues (1) On the application of any party to proceedings or on its own initiative the Tribunal may order any preliminary issue in the proceedings to be disposed of at a preliminary hearing where such issue is properly severable from other issues in the proceedings and where its determination might effectively dispose of the whole case or reduce the issues in the case, thereby saving costs and avoiding delay. (2) An application by a party for the determination of a preliminary issue should set out with precision the point of law or other issue or issues to be decided. It should where appropriate be accompanied by a statement of agreed facts, and it should state whether in the view of the party making the application the issue can be decided on the basis of the statement of agreed facts or whether evidence will be required. If evidence is said to be needed the application should state what matters that evidence would cover. The application should state why, in the applicant’s view, determination of the issue as a preliminary issue would be likely to enable the proceedings to be disposed of more expeditiously and/or at less expense. (3) If the Tribunal decides to order that the issue should be determined as a preliminary issue it will give directions as to the filing in advance of the hearing of any experts’ reports, witness statements, documentary evidence and statement of agreed facts that appear to it to be required. 8. Expert evidence 8.1 Agreeing matters of fact Where more than one party is intending to call expert evidence in the same field, the experts must take steps before preparing or exchanging their reports to agree all matters of fact relevant to their reports, including the facts relating to any comparable transaction on which they propose to rely, any differences of fact, and any plans, documents or photographs on which they intend to rely in their reports. 8.2 Form and content of expert’s report (1) An expert’s report should be addressed to the Tribunal and not to the party from whom the expert has received instructions. It must: (a) give details of the expert’s qualifications; (b) give details of any literature or other material on which the expert has relied in making the report;

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Appendix 5 (c) say who carried out any inspection or investigations which the expert has used for the report and whether or not the investigations have been carried out under the expert’s supervision; (d) give the qualifications of the person who carried out any such inspection or investigations; and (e) where there is a range of opinion on the matters dealt with in the report— (i) summarise the range of opinion, and (ii) give reasons for his or her own opinion; (f) contain a summary of the conclusions reached; (g) contain a statement setting out the substance of all material instructions (whether written or oral). The statement should summarise the facts and instructions given to the expert which are material to the opinions expressed in the report or upon which those opinions are based. (2) The instructions referred to in sub-paragraph 1(g) above will not be privileged against disclosure but the Tribunal will not, in relation to those instructions order disclosure of any specific document or permit any questioning in the Tribunal, other than by the party who instructed the expert, unless it is satisfied that there are reasonable grounds to consider the statement of instructions given under subparagraph 1(g) to be inaccurate or incomplete. 8.3 Written questions to experts (1) Where they think it necessary to do so, a party should put written questions about the report of an expert instructed by another party. Normally such questions should be put once only; should be put within 1 month of service of the expert’s report; and should be only for the purposes of clarification of the report. Where a party sends a written question or questions direct to an expert and the other party is represented by solicitors, a copy of the questions should, at the same time, be sent to those solicitors. It is for the party or parties instructing the expert to pay any fees charged by that expert for answering questions put under this procedure. This does not affect any decision of the Tribunal as to which party is ultimately to bear the expert’s costs. An expert’s answers to questions put in accordance with this paragraph will be treated as part of the expert’s report. (2) Where a party has put a written question to an expert instructed by another party in accordance with the above paragraph, unless the Tribunal orders otherwise it should be answered within 3 weeks. The Tribunal or a Registrar may order that the question must be answered and the Tribunal may also make such an order in relation to a question that has not been put in this way. If the question is not answered the Tribunal or a Registrar may make one or both of the following orders in relation to the party who instructed the expert: that the party may not– (i) rely on the evidence of that expert; or (ii) recover the fees and expenses of that expert from any other party. 895

Appendix 5 8.4 Discussions between experts (1) After the exchange of the experts’ reports, and again if rebuttal reports are exchanged, the experts of like discipline should usually meet and, where the Tribunal so directs must meet, in order to reach further agreement as to facts; to agree any relevant plans, photographs, etc; to identify the issues in the proceedings; and where possible, to reach agreement on an issue. The Tribunal may specify the issues which the experts must discuss. The Tribunal may also direct that following a discussion between the experts the parties must prepare a statement for the Tribunal showing those facts and issues on which the experts agree and those facts and issues on which they disagree and a summary of their reasons for disagreeing. The Tribunal will usually regard failure to co-operate in reaching agreement as to the facts and issues as incompatible with the expert’s duty to the Tribunal and may reflect this in any order on costs that it may make. (2) The contents of the discussions between the experts are not to be referred to at the hearing unless the parties agree. Where experts reach agreement on an issue during their discussions, the agreement will not bind the parties unless the parties expressly agree to be bound by the agreement. 8.5 Computer-based valuations Where valuers propose to rely on computer-based valuations they must agree to employ a common model which can be made available for use by the Tribunal in the preparation of its decision. Directions should be sought from the Tribunal at an early stage if there is difficulty in reaching agreement. 8.6 Single joint expert (1) A party may apply for an order that expert evidence in the proceedings should be given by a single joint expert jointly instructed by the parties to the proceedings. The application should include submissions on the matters to be taken into account by the Tribunal set out in paragraph 2 below. (2) When considering whether expert evidence should be from a single joint expert the Tribunal will take into account all the circumstances and in particular, whether: (a) it is proportionate to have separate experts for each party on a particular issue with reference to– (i) the amount in dispute; (ii) the importance to the parties; and (iii) the complexity of the issue; (b) the instruction of a single joint expert is likely to assist the parties and the Tribunal to resolve the issue more speedily and in a more cost-effective way than separately instructed experts; (c) expert evidence is to be given on the issue of liability, causation or quantum; (d) the expert evidence falls within a substantially established area of knowledge which is unlikely to be in dispute or there is likely to be a range of expert opinion; 896

Appendix 5 (e) a party has already instructed an expert on the issue in question; (f) questions put in accordance with paragraph 8.3 are likely to remove the need for the other party to instruct an expert if one party has already instructed an expert; (g) questions put to a single joint expert may not conclusively deal with all issues that may require testing prior to the final hearing; (h) a conference may be required with the legal representatives, experts and other witnesses which may make instruction of a single joint expert impractical; and (i) a claim to privilege makes the instruction of any expert as a single joint expert inappropriate. 8.7 Reliance on expert evidence by another party When a party has disclosed an expert’s report any party may use that expert’s report as evidence at the hearing. 9. Procedure at the hearing (1) The procedure at a hearing of the Tribunal is within the discretion of the presiding Judge or Member. Except under the simplified procedure, the procedure adopted will generally accord with the practice in the High Court and the county courts. In particular, the claimant, applicant or appellant will begin and will have a right of reply, evidence will be taken on oath, and the rules of evidence will be applied. The Tribunal will throughout seek to adopt a procedure that is proportionate, expeditious and fair in accordance with the overriding objective. (2) Cases assigned to the simplified procedure list will be heard by a single Judge or Member. The procedure at the hearing will be informal and strict rules of evidence will not apply. 10. Site inspections (1) Where appropriate the Tribunal will seek to enter and inspect the land or property that is the subject of the proceedings, and, where practicable, any other land or properties referred to by the parties or their experts. (2) At such inspection, the Tribunal will (unless otherwise agree(d) be accompanied by one representative from each side and will not accept any oral or written evidence tendered in the course of the inspection. The Tribunal may make an unaccompanied inspection without entering on private land. (3) The Tribunal may enter land only with the consent of the occupier. If the occupier is a party to the proceedings the Tribunal may take into account the withholding of consent to enter and inspect that party’s land when deciding any application for costs. 11. Fees The fees to be paid in respect of proceedings in the Tribunal are specified in the Upper Tribunal (Lands Chamber) Fees (Amendment) Order 2010. Unless the Tribunal directs otherwise, the appropriate hearing fee is payable by the party initiating proceedings, but without prejudice to any right to recover the fee under an order for costs. A solicitor acting for a party must be on the record, and will be responsible for the fees payable by that party while he or she is on the record. 897

Appendix 5 12. Costs 12.1 Power to award costs (1) Under section 29 of the Tribunals, Courts and Enforcement Act 2007 the Upper Tribunal has power to order that the costs of any proceedings incurred by one party shall be paid by any other party or by their own or the other party’s legal or other representative. This power is limited by the Rules in the case of appeals from LVTs (see paragraph 12.6 below). (2) In awarding costs the Tribunal may settle the amount summarily or direct that they be the subject of detailed assessment by a Registrar on a specified basis (see paragraph 12.10 below). 12.2 Exercise of discretion in awarding costs Costs are in the discretion of the Tribunal, although this discretion is qualified by particular provisions in section 4 of the Land Compensation Act 1961 (see paragraph 12.3(2) below) and where the case is heard under the simplified and written representations procedures (see paragraph 12.8 below). Subject to what is said below the discretion will usually be exercised in accordance with the principles applied in the High Court and county courts. Accordingly, the Tribunal will have regard to all the circumstances, including the conduct of the parties; whether a party has succeeded on part of their case, even if they have not been wholly successful; and admissible offers to settle. The conduct of a party will include conduct during and before the proceedings; whether a party has acted reasonably in pursuing or contesting an issue; the manner in which a party has conducted their case; whether or not they have exaggerated their claim; and the matters stated in paragraphs 2.2, 8.3(2), 8.4 and 10 above. 12.3 The general rule for costs (1) The general rule is that the successful party ought to receive their costs. On a claim for compensation for compulsory acquisition of land, the costs incurred by a claimant in establishing the amount of disputed compensation are properly to be seen as part of the expense that is imposed on the claimant by the acquisition. The Tribunal will, therefore, normally make an order for costs in favour of a claimant who receives an award of compensation unless there are special reasons for not doing so. (2) Particular rules, however, apply by virtue of section 4 of the Land Compensation Act 1961. Under this provision, where an acquiring authority has made an unconditional offer in writing of compensation and the sum awarded does not exceed the sum offered, the Tribunal must, in the absence of special reasons, order the claimant to bear their own costs thereafter and to pay the post-offer costs of the acquiring authority. However, claimants will not be entitled to their costs if they have failed to deliver to the authority, in time to enable the authority to make a proper offer, a notice of claim containing the particulars set out in section 4(2). Where a claimant has delivered a claim containing the required details and have made an unconditional offer in writing to accept a particular sum, if the Tribunal’s award is equal to or exceeds that sum the Tribunal must, in the absence of 898

Appendix 5 special reasons, order the authority to bear their costs and to pay the claimant’s post-offer costs. 12.4 Standard basis and indemnity basis The Tribunal will normally award costs on the standard basis. On this basis, costs will only be allowed to the extent that they are reasonable and proportionate to the matters in issue, and any doubt as to whether costs were reasonably incurred or reasonable and proportionate in amount will be resolved in favour of the paying person. Exceptionally the Tribunal may award costs on the indemnity basis. On this basis, the receiving party will receive all their costs, except for those which have been unreasonably incurred or which are unreasonable in amount, and any doubt as to whether the costs were reasonably incurred or are reasonable in amount will be resolved in favour of the receiving party. 12.5 Applications under section 84 of the Law of Property Act 1925 (1) On an application to discharge or modify a restrictive covenant affecting land, the following principles will be applied in respect of the exercise of the Tribunal’s discretion regarding liability for costs. (2) Where an applicant successfully challenges an objector’s entitlement to object to an application, the objector is normally ordered to pay the applicant’s costs incurred in dealing with that challenge, but only those costs. Where an applicant unsuccessfully challenges an objector’s entitlement to object to an application, the applicant is normally ordered to pay the objector’s costs incurred in dealing with that challenge. (3) With regard to the costs of the substantive proceedings, because the applicant is seeking to remove or diminish particular property rights that the objector has, unless they have acted unreasonably, unsuccessful objectors to an application will not normally be ordered to pay any of the applicant’s costs. And successful objectors will usually be awarded their costs unless they have acted unreasonably. 12.6 Appeals from Leasehold Valuation Tribunals On an appeal from an LVT the Tribunal may not order a party to the appeal to pay costs incurred by another party unless, in the opinion of the Tribunal, the party ordered to pay costs or its representative has behaved unreasonably in bringing, defending or conducting the proceedings. Where in view of such conduct it does order a party to pay costs the Tribunal may not award more than the LVT could order in such circumstances (currently £500). 12.7 Offers to settle (1) In any proceedings before the Tribunal any party may make an offer to any other party to settle all or part of the proceedings or a particular issue on terms specified in the offer. Neither the offer nor the fact that it has been made may be referred to at the hearing if it is marked with ‘without prejudice save as to costs’ or similar wording, or if it is said to be a ‘Calderbank’ offer. (2) Offers to settle part of proceedings or a particular issue must clearly identify which part of the proceedings or the issue that it relates to. Offers should also state whether or not the offer is open for acceptance indefinitely or for a specified period of time. An 899

Appendix 5 offer should state whether or not it includes interest (if it has been claime(d), at what rate and for what period it covers. It should also state whether or not it includes agreement to pay the other party’s costs and either the amount or the basis of those costs. (3) The party making an offer to settle must send a copy of it to the Tribunal within a sealed envelope enclosed with a cover letter. The Judge or Member hearing the case will not see the offer (it will remain in its sealed envelope separate from the Tribunal’s case fil(e) or be informed of its existence until after the proceedings have been determined. If requested by a party to do so, the Judge or Member may then consider the offer, when considering the question of the costs of the proceedings. 12.8 Simplified and written representations procedure Where proceedings are determined in accordance with the simplified procedure or the written representations procedure, costs will only be awarded if there has been an unreasonable failure on the part of the claimant to accept an offer to settle, or if either party has behaved otherwise unreasonably, or the circumstances are in some other respect exceptional. 12.9 Submissions on costs Where, as is almost invariably the case, the Tribunal issues a written decision determining the substantive issues in the proceedings, this will be sent to the parties with an invitation to make written submissions as to costs. Following consideration of these submissions the Tribunal will issue an addendum to the decision determining the liability for costs. It may be possible, particularly where there are only two possible outcomes of the proceedings, for the Tribunal to invite submissions as to costs at the conclusion of the hearing. This procedure will be followed wherever possible. Where the issue of costs is particularly complicated the Tribunal may hold a costs hearing before making an award. 12.10 Assessment of costs (1) In a simple case or on an interlocutory hearing the Tribunal may make a summary assessment of costs. A party who proposes to apply for a summary assessment must prepare a summary of the costs and serve it in advance on the other party. (2) Costs which cannot be agreed by the parties must be referred by the receiving person to a Registrar to be the subject of a detailed assessment. A party who is dissatisfied with a Registrar’s assessment of costs may apply to the Registrar for a review and, if still dissatisfied, may apply to the Chamber President for a further review. These Practice Directions are made and issued by the Senior President of Tribunals in exercise of powers conferred by the Tribunals, Courts and Enforcement Act 2007 and with the agreement of the Lord Chancellor as required under section 23(4) of the 2007 Act. Lord Justice Carnwath Senior President of Tribunals 29 November 2010

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Appendix 6 Upper Tribunal (Lands Chamber) Forms T379–T382

The following forms are reproduced in this appendix: ●● ●● ●● ●●

Form T379 – Application under section 84 of the Law of Property Act 1925 to discharge or modify a restrictive covenant Form T380 – Form of publicity notice Form T381 – Notice of objection to a restrictive covenant application Form T382 – Certificate of compliance

© Crown copyright Published by Her Majesty’s Courts and Tribunals Service

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Appendix 6

FORM T379 – APPLICATION UNDER SECTION 84 OF THE LAW OF PROPERTY ACT 1925 TO DISCHARGE OR MODIFY A RESTRICTIVE COVENANT UPPER TRIBUNAL (LANDS CHAMBER)

Application under Section 84 of the Law of Property Act 1925 to discharge or modify a restrictive covenant •

LP /

/

Tick boxes where applicable and provide the relevant information for your application.

1. Applicant’s details Name Address

Postcode Telephone number(s) (if not represented)

Fax number

(if not represented)

Email address (optional)

2. Applicant’s representative/address for service of documents If this section is completed all communications regarding this application will be sent or delivered to the representative. Name Address

Postcode Telephone number(s) Fax number DX number Email address (optional) Professional capacity in which the representative acts, if any

T379 - Application under Section 84 of the Law of Property Act 1925 to discharge or modify a restrictive covenant (01.16)

1

902

© Crown copyright 2016

Appendix 6 Alternative address for service of documents If the applicant is not represented and wishes to have all communications sent or delivered to the applicant’s address, leave this section blank. Name Address

Postcode Telephone number(s) Fax number Email address (optional)

3. Application land Postal address

(or OS number) and area

Postcode Land Registry title number Also provide: • a recent copy of the Land Registry entry • a plan with the application land marked in red • an Ordnance Survey plan site-centred showing all land within 200 meters of the application land to the scale of 1:1250

4. Applicant’s interest in the application land The applicant’s interest in the application land is: Freehold Leasehold (provide the name and address of the landlord) Name Address

Postcode Contractual (enclose a copy of the contract)

2

903

Appendix 6 5. Other person(s) with an interest in the application land (tick as appropriate) There are no other interest holders There are other interest holders (complete the following details and attach additional sheets if required) Name Address

Postcode Nature of interest

Name Address

Postcode Nature of interest

6.

(tick as appropriate) a) consent I enclose signed consents b) This application is made without the consent of the following interest holders: Name Name Name

3

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Appendix 6 7. Adjacent/nearby land in which the applicant has an interest (tick as appropriate) Not applicable The adjacent/nearby land in which the applicant has an interest is: Freehold Leasehold Postal address

(or OS number) and

area

Postcode Land Registry title number Also provide: • a recent copy of the Land Registry entry • a plan with the additional land marked in green

8. The additional land subject to the burden of the restrictive covenants is: (tick as appropriate) Not applicable The additional land also subject to the burden of the restriction(s) should be described below and outlined in blue on the attached plan:

9A. yellow or brown on the plan, and the names if known, and addresses of all Any statement made by the applicant under this heading is without prejudice to contentions the applicant may later advance as to the entitlement of particular objectors.

Name Address

Postcode Land Registry title number 4

905

Appendix 6 Name Address

Postcode Land Registry title number

9B.

10. The restriction was imposed by the following instrument(s): Identify the deed, conveyance, transfer or other document that imposed the restriction(s) including its date and the parties to it. If there is more than one instrument, a copy of each must be attached including a coloured copy of any attached plan. If a copy of any document is unavailable please explain what steps were taken to obtain a copy and attach other documentary evidence of the restriction(s) imposed by it. 1.

2.

3.

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Appendix 6 11. The restriction(s) the subject of this application: preamble or other restrictions and use the same numbering for each relevant restriction as used in the instrument restrictions identify which document imposed it or them. Restrictions means covenants that restrict the landowner’s use of the land or buildings. The Tribunal has no powers regarding positive covenants (generally speaking, ones that require action or expenditure by the landowner) so these must not be included in the application.

12. Is the application in breach of any of the restrictions? Yes If yes, give details below

No

If yes, is the application being made following a stay of proceedings under section 84(9) of the Law of Property Act 1925? Yes If yes, give details below

No

13. Planning permission Provide details of planning permissions applied for, granted or refused relating to the application land in the last 5 years (enclose a copy of any current approval):

6

907

Appendix 6 14. The application The application is for: (tick as appropriate) Discharge (complete section 15) (complete section 16) (complete sections 15 and 16)

15. The application for discharge (tick as appropriate) The application is for discharge of the restriction(s) on the following ground(s): Law of Property Act 1925 subsection 84(1) – Choose all relevant options. Applicants should satisfy themselves that the grounds set out can be relied on in the circumstances of the case. It will be rare, for instance, for ground (aa) to be relevant to an application to discharge.

A.

(a)

(aa)

(b)

(c)

Not applicable

I attach a statement of case in which I provide details and evidence of all the facts relied upon to establish each of the grounds on which I rely for the discharge of the restriction(s) and the reasons for considering that that ground or those grounds apply.

B.

Note: relevant particulars will include some or all of the following: (a) changes in the character of the property; changes in the character of the neighbourhood; other circumstances by reason of which the restriction ought to be deemed obsolete. (aa) the reasonable user that is impeded by the restriction; the relevant provisions of the development plan; a current planning permission; planning permissions or refusals of planning permission showing a pattern for the relevant area; the period at which and the context in which the restriction was imposed; other circumstances; if money is said to be adequate compensation. (b) (c) any matters relied on as showing that there would be no injury.

16. (tick as appropriate) A. Law of Property Act 1925 subsection 84(1) – Choose all relevant options. Applicants should satisfy themselves that the grounds set out can be relied on in the circumstances of the case. Ground (a), for instance, will not usually be relevant to an application to modify. Note: This is not to be combined with 15 above. (a)

(aa)

(b)

(c)

Not applicable

B. to permit (provide details)

or as follows: (provide details)

C.

I attach a statement of case in which I provide details and evidence of all the facts relied upon to establish that that ground or those grounds apply. Note: relevant particulars will include some or all of (a), (aa), (b), (c) as set out above. 7

908

Appendix 6 Checklist for enclosures I have enclosed with this notice: (tick as appropriate)

a recent copy of all relevant Land Registry entries a copy of the deed, conveyance, transfer or other document that imposed the restriction including a coloured copy of any attached plan, or if unavailable, alternative documentary evidence of the restriction a copy of any current planning permission an Ordnance Survey plan site-centered showing all land within 200 meters of the application land to the scale of 1:1250 plans of proposed development a statement of case Fees I have also enclosed a cheque payable to the ‘HM Courts & Tribunals Service’ (not the Lands Chamber) for:

Declaration, signature and date (attached additional sheet if required) I am/we are: (tick as appropriate) the applicant(s) the solicitor for the applicant(s) the agent of the applicant(s) (enclose authority to act signed by the applicant(s)) I/We have paid the setting-down fee of £880 and accept responsibility for the conduct of the case and the payment of later fees.

Dated

Signed

Name

Signed

Dated

Name

8

909

Appendix 6 Send or deliver this application and all enclosures to: (keep a copy for yourself and note that you may be required to provide a copy to potential objectors) The Registrar Upper Tribunal (Lands Chamber) 5th Floor Rolls Building 7 Rolls Building Fetter Lane London EC4A 1NL DX: 160042 Strand 4 Tel: 020 7612 9710 Fax: 0870 761 7751 Please visit our website to see: • • • •

the Rules and Practice Directions governing procedure in the Tribunal the Fees Rules showing the fees payable during the proceedings the Restrictive Covenants Procedure Flowchart summarising the procedure for applications

If you do not have internet access, these documents may be requested from the Tribunal.

FORM T380 – FORM OF PUBLICITY NOTICE (Please copy this format when producing your publicity notice. A copy may be downloaded from the Lands Chamber website. Do not insert hand written or typed responses on this document. Please do not include the italicised instructions on your notice.) LP/………………… / ………………

Restrictive Covenant Application: Publicity notice Take notice that an application under section 84 of the Law of Property Act 1925 to [discharge/modify/discharge or modify] [please select one option here.] a restrictive covenant affecting the land referred to below has been made to the Tribunal. If you are legally entitled to the benefit of the covenant and you wish to object to the application, you should object within 1 month of the date of this notice. ………………………..

The application relates to land at

………………………..

The applicant is of

9

………………………..

The covenant contained in a [insert type of document/instrument, eg conveyance] dated [insert date of instrument] made between [insert names of all parties to the instrument] in respect of which the application is made contains the following restriction: [eg to use the land as a private dwelling house only. Please note that the restriction must be set out in full and not paraphrased or abbreviated] …………………. 910

Appendix 6 Set out either A or B (deleting the one that does not apply) or set out both; do not combine the two sections into one. A. The application seeks the discharge of the restriction on the following grounds [omit grounds that do not apply. Please do not add additional information]: (a) that the restriction ought to be deemed obsolete; (aa) that unless discharged the covenant would impede the use of the land as [insert planned use eg the land to be used for offices] ……..; that such use is a reasonable use; that in impeding that use the restriction does not secure to the persons entitled to the benefit of it any practical benefits of substantial value or advantage; and that money will be an adequate compensation for the loss or disadvantage (if any) which any such person will suffer from the discharge; (b) that the persons of full age and capacity entitled to the benefit of the restriction have agreed, expressly or by implication, by their acts or omissions to the discharge of the restriction; (c) that the proposed discharge will not injure the persons entitled to the benefit of the restriction. B. The application seeks the modification of the restriction so as to permit [insert planned use, eg the land to be used for offices] …………………. Modification is sought on the following grounds [omit grounds that do not apply. Please do not add additional information]: (a) that the restriction ought to be deemed obsolete; (aa) that unless modified the covenant would impede the use of the land as [insert planned use]………; that such use is a reasonable use; that in impeding that use the restriction does not secure to the persons entitled to the benefit of it any practical benefits of substantial value or advantage; and that money will be an adequate compensation for the loss or disadvantage (if any) which any such person will suffer from the modification; (b) that the persons of full age and capacity entitled to the benefit of the restriction have agreed, expressly or by implication, by their acts or omissions to the modification of the restriction; (c) that the proposed modification will not injure the persons entitled to the benefit of the restriction. You may inspect the application, plan and other documents at …………………. [the application land or an address conveniently near application land, for example not further than 2 miles from the application land if it is in an urban area, or 10 miles in the countryside] during office working hours. A copying charge may be payable if copies are required. If you are a person legally entitled to the benefit of the restrictive covenant and you wish to object to the application, you may download a Notice of Objection form from the Lands Chamber website or contact: The Registrar, Lands Chamber, 5th Floor, Rolls Building, 7 Rolls Building, Fetter Lane, London EC4A 1NL (or telephone 020 7612 9710) and ask for a form of objection (Form LPD). The form should be completed and signed and sent to the Tribunal and to the applicant(s) or, if they are represented, their solicitors within 1 month of the date of this notice. You may apply for an extension of this time period.

911

Appendix 6 Persons who file objections become parties to the case, and, provided they are entitled to object, they may appear at the hearing of the application, if there is one. Objecting to an application is the assertion of a property right. The Applicant will be asked whether it accepts that the person giving notice of objection is entitled to the benefit of the restriction of which discharge or modification is sought. If it does not accept this, it will be for the Tribunal to determine whether or not the objector appears to be so entitled and should therefore be admitted to oppose the application. If such a determination has to be made the general rule is that the unsuccessful party will pay the costs of the party in whose favour the determination is made. Regarding the application to discharge or modify a restrictive covenant, when there is a person or people entitled to its benefit the applicant is seeking to have a property right removed from them. For this reason, successful objectors may normally expect to have their legal costs paid by the unsuccessful applicant. Likewise, although they will usually pay their own costs, unsuccessful objectors will not normally be ordered to pay the costs of successful applicants. Only an objector who acts unreasonably may be required to pay some or all of the applicant’s costs. The applicant may rely on a lack of objections, or a failure on the part of any particular person to object, in support of the application. If you are unsure of your position you should seek legal advice. Signed …………………………………………………… Status [Applicant/ Applicant’s Solicitor/Agent] Address (including postcode)

Telephone Fax

912

Date ………………….

Appendix 6

FORM T381 – NOTICE OF OBJECTION TO A RESTRICTIVE COVENANT APPLICATION Upper Tribunal (Lands Chamber) Form LPD

Notice of objection to a Restrictive Covenant application Case number LP/      /      Concerning the application to discharge or modify a restrictive covenant: x made by (applicant) x concerning (land) Objector(s) (attach a list if necessary) Name Address (including postcode)

Telephone (if not represented) Fax (if not represented) Email (optional) Status (individual, partnership, etc) Address for service (Note if you are represented all documents must be sent or delivered to your representative)

Name Address (including postcode)

Telephone Fax Email (optional)

T381 form LPD (10.14)

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Appendix 6 Upper Tribunal (Lands Chamber) Form LPD

Objector’s(s’) representative/ address for service of documents (If this section is completed all communications from the Tribunal and other parties will be sent or delivered to the representative.)

Name Address (including postcode)

Telephone Fax DX Email (optional) Professional capacity in which the representative acts, if any: (state whether solicitor, surveyor or other professional qualification. A representative who is not a solicitor must enclose an authority to act signed by the objector(s))

Claim for compensation If the application is successful, is this also a claim for compensation from the applicant

Yes

Approximate amount of compensation claimed:

£

No

(This figure is provisional and will not be binding)

Legal entitlement to the benefit of the restrictive covenant (You may object to an application to discharge or modify restrictive covenants only if you have a legal entitlement to the benefit of the covenant(s). You may need to provide evidence of your entitlement. If you are unsure about your entitlement you should seek legal advice.)

Basis of claim to be legally entitled to the benefit of the restriction (tick one only) The objector is the original covenantee The covenant(s) were created to benefit land owned by the objector and are enforceable by the objector Grounds of objection Is this an objection to the discharge of the restrictive covenant(s)?

Yes

No

If yes, give a brief statement of the objector’s response to the grounds of the application for discharge ((a),(aa),(b) or (c) as the case may be, attach an extra sheet if needed)

T381 form LPD (10.14)

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Page 2 of 4

Appendix 6 Upper Tribunal (Lands Chamber) Form LPD

Is this an objection to the modification of the restrictive covenant(s)?

Yes

No

If yes, give a brief statement of the objector’s response to the grounds of the application for modification ((a),(aa),(b) or (c) as the case may be, attach an extra sheet if needed)

Any other reasons why the objector opposes the application

Important notes x An objector whose entitlement to the benefit of the covenant(s) is not accepted will need to provide evidence that they own land that has the benefit of the covenant(s) so that they are legally entitled to enforce the covenant(s) and should be admitted to oppose the application. If there needs to be a hearing to decide this issue an objector who fails to establish that they should be admitted may be ordered to pay the legal costs of the applicant(s) in relation to that issue. x An objector whose entitlement is accepted or proven is unlikely to be ordered to pay the applicant’s costs in relation to the application to discharge or modify the covenant(s). In those circumstances in asking the Tribunal to discharge or modify a restrictive covenant, the applicant is seeking to have a property right removed from the benefited owner(s). For this reason, successful objectors may normally expect to have their legal costs paid by the unsuccessful applicant. Likewise, although they will usually pay their own costs, unsuccessful objectors will not normally be ordered to pay the costs of successful applicants. An objector may be required to pay some or all of the applicant’s costs only if they behaved unreasonably in the course of the proceedings, in rejecting a reasonable offer to settle made by the applicant, or in objecting to the proposed change. x If there are no objections by people entitled to enforce the covenant the applicant may rely on the lack of objections in support of the application. x If you have any questions about these issues you should seek legal advice. Signature and date

Signed

Date

Name I am: the objector(s)

the solicitor for the objector(s)

the agent of the objector(s) (enclose authority to act signed by the objector(s))

T381 form LPD (10.14)

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Appendix 6 Upper Tribunal (Lands Chamber) Form LPD

What to do next Once completed and signed, keep a copy of your objection form for your records and send a copy both to the applicant(s) (or to any known solicitor or representative of the applicant(s)) and to: The Registrar Upper Tribunal (Lands Chamber) 5th Floor, Rolls Building 7 Rolls Building Fetter Lane London EC4A 1NL DX: 160042 Strand 4 Tel: 020 7612 9710 Fax: 0870 761 7751 There is no fee for filing an objection. It should be sent or delivered within one month of the date of the publicity notice or receipt of a copy of the application otherwise it is necessary to apply for an extension of time. If you have internet access please visit our website for further information about proceedings in the Tribunal and the rules that apply, otherwise contact the Tribunal office.

T381 form LPD (10.14)

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Appendix 6

FORM T382 – CERTIFICATE OF COMPLIANCE UPPER TRIBUNAL (LANDS CHAMBER)

TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

By:

________________________________ CERTIFICATE OF COMPLIANCE* To:

The Registrar of the Lands Chamber

IN THE MATTER OF AN APPLICATION BY.................................................................... I/We ..............................................................................the Applicant(s) or We .................................................................................solicitors

to

the

Applicant(s)

CERTIFY AS FOLLOWS: (a)

[here set out the steps taken to comply with the Registrar’s directions]

(b)

Objections have been received from the following persons:

Name:......................................................................................................................................... Address: ..................................................................................................................................... ................................................................................................................................................... Name:......................................................................................................................................... Address: ..................................................................................................................................... ................................................................................................................................................... (attach a list if necessary)

DATED ................................................................. SIGNED.............................................. Note: 1) 2) 3) 4)

this certificate must be accompanied by:the page of the newspaper in which the advertisement was published (if directed); a certified copy of the notice served; a list of the persons served; and proof of service.

* An electronic copy of this form may be downloaded from the Tribunal website.

FormLPCoC

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Appendix 7 Sections 106–106C of the Town and Country Planning Act 1990

THE TOWN AND COUNTRY PLANNING ACT 1990 (c 8) An Act to consolidate certain enactments relating to town and country planning (excluding special controls in respect of buildings and areas of special architectural or historic interest and in respect of hazardous substances) with amendments to give effect to recommendations of the Law Commission [24th May 1990] BE IT ENACTED by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:–

PART III CONTROL OVER DEVELOPMENT Meaning of development [106 Planning obligations] [(1)

Any person interested in land in the area of a local planning authority may, by agreement or otherwise, enter into an obligation (referred to in this section and sections 106A [to 106C] [, sections 106A to 106C and Schedule 9A] as ‘a planning obligation’), enforceable to the extent mentioned in subsection (3)—

(a) restricting the development or use of the land in any specified way; (b) requiring specified operations or activities to be carried out in, on, under or over the land; (c) requiring the land to be used in any specified way; or (d) requiring a sum or sums to be paid to the authority [(or, in a case where section 2E applies, to the Greater London Authority)] on a specified date or dates or periodically. [(1A) In the case of a development consent obligation, the reference to development in subsection (1)(a) includes anything that constitutes development for the purposes of the Planning Act 2008.]

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Appendix 7 (2) A planning obligation may— (a) (b)

be unconditional or subject to conditions; impose any restriction or requirement mentioned in subsection (1)(a) to (c) either indefinitely or for such period or periods as may be specified; and (c) if it requires a sum or sums to be paid, require the payment of a specified amount or an amount determined in accordance with the instrument by which the obligation is entered into and, if it requires the payment of periodical sums, require them to be paid indefinitely or for a specified period. (3) Subject to subsection (4) a planning obligation is enforceable by the authority identified in accordance with subsection (9)(d)— (a) against the person entering into the obligation; and (b) against any person deriving title from that person. (4) The instrument by which a planning obligation is entered into may provide that a person shall not be bound by the obligation in respect of any period during which he no longer has an interest in the land. (5) A restriction or requirement imposed under a planning obligation is enforceable by injunction. (6) Without prejudice to subsection (5), if there is a breach of a requirement in a planning obligation to carry out any operations in, on, under or over the land to which the obligation relates, the authority by whom the obligation is enforceable may— (a) (b)

enter the land and carry out the operations; and recover from the person or persons against whom the obligation is enforceable any expenses reasonably incurred by them in doing so. (7) Before an authority exercise their power under subsection (6)(a) they shall give not less than twenty-one days’ notice of their intention to do so to any person against whom the planning obligation is enforceable. (8) Any person who wilfully obstructs a person acting in the exercise of a power under subsection (6)(a) shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale. (9) A planning obligation may not be entered into except by an instrument executed as a deed which— (a)

states that the obligation is a planning obligation for the purposes of this section; [(aa) if the obligation is a development consent obligation, contains a statement to that effect;] (b) identifies the land in which the person entering into the obligation is interested; (c) identifies the person entering into the obligation and states what his interest in the land is; and (d) identifies the local planning authority by whom the obligation is enforceable [and, in a case where section 2E applies, identifies the Mayor of London as an authority by whom the obligation is also enforceable]. 920

Appendix 7 (10) (11)

(12)

A copy of any such instrument shall be given to the [local planning authority so identified and, in a case where section 2E applies, to the Mayor of London]. A planning obligation shall be a local land charge and for the purposes of the Local Land Charges Act 1975 the authority by whom the obligation is enforceable shall be treated as the originating authority as respects such a charge. Regulations may provide for the charging on the land of—

(a) any sum or sums required to be paid under a planning obligation; and (b) any expenses recoverable by a local planning authority [or the Mayor of London] under subsection (6)(b), and this section and sections 106A [to 106BC] shall have effect subject to any such regulations. (13) In this section ‘specified’ means specified in the instrument by which the planning obligation is entered into and in this section and section 106A ‘land’ has the same meaning as in the Local Land Charges Act 1975. [(14) In this section and section 106A ‘development consent obligation’ means a planning obligation entered into in connection with an application (or a proposed application) for an order granting development consent.]] Amendments Substituted, together with ss 106A, 106B, for s 106 as originally enacted, by the Planning and Compensation Act 1991, s 12(1). Repealed by the Planning and Compulsory Purchase Act 2004, ss 118(1), 120, Sch 6, paras 1, 5, Sch 9. Date in force: to be appointed: see the Planning and Compulsory Purchase Act 2004, s 121(1), (2)(f), (g). Sub-s (1): words ‘and sections 106A to 106C’ repealed and subsequent words in square brackets substituted by the Housing and Planning Act 2016, s 158(3). Date in force: to be appointed: see the Housing and Planning Act 2016, s 216(3). Sub-s (1): words ‘to 106C’ in square brackets substituted by the Growth and Infrastructure Act 2013, s 7(2), Sch 2, paras 1, 3(1), (2). Date in force: 25 April 2013: see the Growth and Infrastructure Act 2013, s 35(2); for transitional provisions see s 7(3) thereof. Sub-s (1): in para (d) words from ‘(or, in a’ to ‘Greater London Authority)’ in square brackets inserted by the Greater London Authority Act 2007, s 33(1), (2). Date in force: 6 April 2008: see SI 2008/582, art 2(a). Sub-s (1A): inserted by the Planning Act 2008, s 174(1), (2)(a). Date in force: 1 March 2010: see SI 2010/101, art 3(k); for savings see art 6 thereof. Sub-s (9): para (aa) inserted by the Planning Act 2008, s 174(1), (2)(b). Date in force: 1 March 2010: see SI 2010/101, art 3(k); for savings see art 6 thereof. Sub-s (9): in para (d) words from ‘and, in a’ to ‘is also enforceable’ in square brackets inserted by the Greater London Authority Act 2007, s 33(1), (3). Date in force: 6 April 2008: see SI 2008/582, art 2(a).

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Appendix 7 Sub-s (10): words from ‘local planning authority’ to ‘Mayor of London’ in square brackets substituted by the Greater London Authority Act 2007, s 33(1), (4). Date in force: 6 April 2008: see SI 2008/582, art 2(a). Sub-s (12): in para (b) words ‘or the Mayor of London’ in square brackets inserted by the Greater London Authority Act 2007, s 33(1), (5). Date in force: 6 April 2008: see SI 2008/582, art 2(a). Sub-s (12): words ‘to 106BC’ in square brackets substituted by the Growth and Infrastructure Act 2013, s 7(2), Sch 2, paras 1, 3(1), (3). Date in force: 25 April 2013: see the Growth and Infrastructure Act 2013, s 35(2); for transitional provisions see s 7(3) thereof. Sub-s (14): inserted by the Planning Act 2008, s 174(1), (2)(c). Date in force: 1 March 2010: see SI 2010/101, art 3(k); for savings see art 6 thereof. See further See further: the High Speed Rail (London—West Midlands) Act 2017, ss 22(7), 50(6).

[106ZA Resolution of disputes about planning obligations] [Schedule 9A (resolution of disputes about planning obligations) has effect.] Amendments Inserted by the Housing and Planning Act 2016, s 158(1). Date in force: to be appointed: see the Housing and Planning Act 2016, s 216(3). See further See further: the High Speed Rail (London—West Midlands) Act 2017, ss 22(7), 50(6).

[106ZB Enforceability of planning obligations regarding affordable housing] [(1) Regulations made by the Secretary of State may impose restrictions or conditions on the enforceability of planning obligations entered into with regard to the provision of— (a) affordable housing, or (b) prescribed descriptions of affordable housing. (2) Regulations under this section— (a) may make consequential, supplementary, incidental, transitional or saving provision; (b) may impose different restrictions or conditions (or none) depending on the size, scale or nature of the site or the proposed development to which any planning obligations would relate. Paragraph (b) is without prejudice to the generality of section 333(2A).

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Appendix 7 (3) This section does not apply in relation to a planning obligation if— (a) planning permission for the development was granted wholly or partly on the basis of a policy for the provision of housing on rural exception sites, or (b) the obligation relates to development in a National Park or in an area designated under section 82 of the Countryside and Rights of Way Act 2000 as an area of outstanding natural beauty. (4) In this section ‘affordable housing’ means new dwellings in England that— (a) are to be made available for people whose needs are not adequately served by the commercial housing market, or (b) are starter homes within the meaning of Chapter 1 of Part 1 of the Housing and Planning Act 2016 (see section 2 of that Act). (5) ‘New dwelling’ here means a building or part of a building that— (a) has been constructed for use as a dwelling and has not previously been occupied, or (b) has been adapted for use as a dwelling and has not been occupied since its adaptation. (6) The Secretary of State may by regulations amend this section so as to modify the definition of ‘affordable housing’.] Amendments Inserted by the Housing and Planning Act 2016, s 159(1). Date in force: to be appointed: see the Housing and Planning Act 2016, s 216(3). See further See further: the High Speed Rail (London—West Midlands) Act 2017, ss 22(7), 50(6).

[106A Modification and discharge of planning obligations] [(1) A planning obligation may not be modified or discharged except— (a) by agreement between [the appropriate authority (see subsection (11))] and the person or persons against whom the obligation is enforceable; or (b) in accordance with [—] [(i)] this section and section 106B [, or (ii) sections 106BA and 106BC]. (2) An agreement falling within subsection (1)(a) shall not be entered into except by an instrument executed as a deed. (3) A person against whom a planning obligation is enforceable may, at any time after the expiry of the relevant period, apply to [the appropriate authority] for the obligation— (a) to have effect subject to such modifications as may be specified in the application; or (b) to be discharged. 923

Appendix 7 (4)

In subsection (3) ‘the relevant period’ means— (a) (b)

(5) (6)

such period as may be prescribed; or if no period is prescribed, the period of five years beginning with the date on which the obligation is entered into. An application under subsection (3) for the modification of a planning obligation may not specify a modification imposing an obligation on any other person against whom the obligation is enforceable. Where an application is made to an authority under subsection (3), the authority may determine— (a)

(7) (8)

(9)

that the planning obligation shall continue to have effect without modification; (b) if the obligation no longer serves a useful purpose, that it shall be discharged; or (c) if the obligation continues to serve a useful purpose, but would serve that purpose equally well if it had effect subject to the modifications specified in the application, that it shall have effect subject to those modifications. The authority shall give notice of their determination to the applicant within such period as may be prescribed. Where an authority determine [under this section] that a planning obligation shall have effect subject to modifications specified in the application, the obligation as modified shall be enforceable as if it had been entered into on the date on which notice of the determination was given to the applicant. Regulations may make provision with respect to— (a) (b) (c)

the form and content of applications under subsection (3); the publication of notices of such applications; the procedures for considering any representations made with respect to such applications; and (d) the notices to be given to applicants of determinations under subsection (6). (10) Section 84 of the Law of Property Act 1925 (power to discharge or modify restrictive covenants affecting land) does not apply to a planning obligation.] [(11) In this section ‘the appropriate authority’ means— (a)

(12)

924

the Mayor of London, in the case of any planning obligation enforceable by him; [(aa) the Secretary of State, in the case of any development consent obligation …; (ab) …] (b) in the case of any other planning obligation, the local planning authority by whom it is enforceable. The Mayor of London must consult the local planning authority before exercising any function under this section.]

Appendix 7 Amendments Substituted, together with ss 106, 106B, for s 106 as originally enacted, by the Planning and Compensation Act 1991, s 12(1). Repealed by the Planning and Compulsory Purchase Act 2004, ss 118(1), 120, Sch 6, paras 1, 5, Sch 9. Date in force: to be appointed: see the Planning and Compulsory Purchase Act 2004, s 121(1), (2)(f), (g). Sub-s (1): in para (a) words ‘the appropriate authority (see subsection (11))’ in square brackets substituted by the Greater London Authority Act 2007, s 34(1), (2). Date in force: 6 April 2008: see SI 2008/582, art 2(a). Sub-s (1): para (b)(i) numbered as such by the Growth and Infrastructure Act 2013, s 2(1), Sch 2, paras 1, 4(1), (2)(a). Date in force: 25 April 2013: see the Growth and Infrastructure Act 2013, s 35(2). Sub-s (1): para (b)(ii) and word ‘, or’ immediately preceding it inserted by the Growth and Infrastructure Act 2013, s 7(2), Sch 2, paras 1, 4(1), (2)(b). Date in force: 25 April 2013: see the Growth and Infrastructure Act 2013, s 35(2); for transitional provisions see s 7(3) thereof. Sub-s (3): words ‘the appropriate authority’ in square brackets substituted by the Greater London Authority Act 2007, s 34(1), (3). Date in force: 6 April 2008: see SI 2008/582, art 2(a). Sub-s (8): words ‘under this section’ in square brackets inserted by the Growth and Infrastructure Act 2013, s 7(2), Sch 2, paras 1, 4(1), (3). Date in force: 25 April 2013: see the Growth and Infrastructure Act 2013, s 35(2); for transitional provisions see s 7(3) thereof. Sub-ss (11), (12): inserted by the Greater London Authority Act 2007, s 34(1), (4). Date in force: 6 April 2008: see SI 2008/582, art 2(a). Sub-s (11): paras (aa), (ab) inserted by the Planning Act 2008, s 174(1), (3). Date in force: 1 March 2010: see SI 2010/101, art 3(k); for savings see art 6 thereof. Sub-s (11): in para (aa) words omitted repealed by the Localism Act 2011, ss 128(2), 237, Sch 13, Pt 2, para 77(1), (2)(a), Sch 25, Pt 20. Date in force: 1 April 2012: see SI 2012/628, art 7. Sub-s (11): para (ab) repealed by the Localism Act 2011, ss 128(2), 237, Sch 13, Pt 2, para 77(1), (2)(b), Sch 25, Pt 20. Date in force: 1 April 2012: see SI 2012/628, art 7. See further See further: the High Speed Rail (London—West Midlands) Act 2017, ss 22(7), 50(6). Subordinate legislation Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992, SI 1992/2832 (made under sub-ss (7), (9)). Town and Country Planning (Modification and Discharge of Planning Obligations) (Amendment) (England) Regulations 2013, SI 2013/147 (made under sub-s (4)(a)).

925

Appendix 7

[106B Appeals [in relation to applications under section 106A] [(1) Where [an authority] [(other than the Secretary of State …)]—

(2)

(3) (4)

(5)

(6) (7) [(8)

(a) fail to give notice as mentioned in section 106A(7); or (b) determine [under section 106A] that a planning obligation shall continue to have effect without modification, the applicant may appeal to the Secretary of State. For the purposes of an appeal under subsection (1)(a), it shall be assumed that the authority have determined that the planning obligation shall continue to have effect without modification. An appeal under this section shall be made by notice served within such period and in such manner as may be prescribed. Subsections (6) to (9) of section 106A apply in relation to appeals to the Secretary of State under this section as they apply in relation to applications to authorities under that section. Before determining the appeal the Secretary of State shall, if either the applicant or the authority so wish, give each of them an opportunity of appearing before and being heard by a person appointed by the Secretary of State for the purpose. The determination of an appeal by the Secretary of State under this section shall be final. Schedule 6 applies to appeals under this section.] In the application of Schedule 6 to an appeal under this section in a case where the authority mentioned in subsection (1) is the Mayor of London, references in that Schedule to the local planning authority are references to the Mayor of London.]

Amendments Substituted, together with ss 106, 106A, for s 106 as originally enacted, by the Planning and Compensation Act 1991, s 12(1). Section heading: words ‘under section 106A’ in square brackets inserted by the Growth and Infrastructure Act 2013, s 7(2), Sch 2, paras 1, 5(1), (2). Date in force: 25 April 2013: see the Growth and Infrastructure Act 2013, s 35(2). Repealed by the Planning and Compulsory Purchase Act 2004, ss 118(1), 120, Sch 6, paras 1, 5, Sch 9. Date in force: to be appointed: see the Planning and Compulsory Purchase Act 2004, s 121(1), (2)(f), (g). Sub-s (1): words ‘an authority’ in square brackets substituted by the Greater London Authority Act 2007, s 34(5), (6). Date in force: 6 April 2008: see SI 2008/582, art 2(a). Sub-s (1): words in square brackets beginning with the words ‘(other than the Secretary of State’ inserted by the Planning Act 2008, s 174(1), (4). Date in force: 1 March 2010: see SI 2010/101, art 3(k); for savings see art 6 thereof. Sub-s (1): words omitted repealed by the Localism Act 2011, ss 128(2), 237, Sch 13, Pt 2, para 77(1), (3), Sch 25, Pt 20. Date in force: 1 April 2012: see SI 2012/628, art 7. 926

Appendix 7 Sub-s (1): in para (b) words ‘under section 106A’ in square brackets inserted by the Growth and Infrastructure Act 2013, s 7(2), Sch 2, paras 1, 5(1), (3). Date in force: 25 April 2013: see the Growth and Infrastructure Act 2013, s 35(2); for transitional provisions see s 7(3) thereof. Sub-s (8): inserted by the Greater London Authority Act 2007, s 34(5), (7). Date in force: 6 April 2008: see SI 2008/582, art 2(a). See further See further: the High Speed Rail (London—West Midlands) Act 2017, ss 22(7), 50(6). Subordinate legislation Town and Country Planning (Modification and Discharge of Planning Obligations) Regulations 1992, SI 1992/2832 (made under sub-ss (3), (4), (7)).

[106BA …] […] Amendments Inserted by the Growth and Infrastructure Act 2013, s 7(1). Date in force: 25 April 2013: see the Growth and Infrastructure Act 2013, s 35(2); for transitional provisions see s 7(3), (4) thereof. Repealed by the Growth and Infrastructure Act 2013, s 7(4). Effective from: 30 April 2016.

[106BB …] […] Amendments Inserted by the Growth and Infrastructure Act 2013, s 7(1). Date in force: 25  April 2013: see the Growth and Infrastructure Act 2013, s 35(2); for transitional provisions see s 7(3), (4) thereof. Repealed by the Growth and Infrastructure Act 2013, s 7(4). Effective from: 30 April 2016.

[106BC …] […] Amendments Inserted by the Growth and Infrastructure Act 2013, s 7(1). Date in force: 25  April 2013: see the Growth and Infrastructure Act 2013, s 35(2); for transitional provisions see s 7(3), (4) thereof. Repealed by the Growth and Infrastructure Act 2013, s 7(4). Effective from: 30 April 2016. 927

Appendix 7

[106C Legal challenges relating to development consent obligations] [(1)

A court may entertain proceedings for questioning a failure by the Secretary of State … to give notice as mentioned in section 106A(7) [or 106BA(9)] only if—

(a) the proceedings are brought by a claim for judicial review, and (b) the claim form is filed [before the end of] the period of 6 weeks beginning with [the day after] the day on which the period prescribed under section 106A(7) [or 106BA(9)] ends. [(1A) If no period is prescribed under section 106BA(9), the period of 6 weeks referred to in subsection (1)(b) that applies in relation to proceedings for failure to give notice as mentioned in subsection (9) of section 106BA begins with [the day after] the expiry of the period mentioned in that subsection that applies in the applicant’s case.] (2) A court may entertain proceedings for questioning a determination by the Secretary of State … that a planning obligation shall continue to have effect without modification only if—

[(3)

(a) the proceedings are brought by a claim for judicial review, and (b) the claim form is filed [before the end of] the period of 6 weeks beginning with [the day after] the day on which notice of the determination is given under section 106A(7) [or 106BA(9)].] A court may entertain proceedings for questioning a determination by the Secretary of State on an application under section 106BA that a planning obligation shall be modified otherwise than in accordance with the application only if— (a) the proceedings are brought by a claim for judicial review, and (b) the claim form is filed [before the end of] the period of 6 weeks beginning with [the day after] the day on which notice of the determination is given under section 106BA(9).]

Amendments Inserted by the Planning Act 2008, s 174(1), (5). Date in force: 1 March 2010: see SI 2010/101, art 3(k); for savings see art 6 thereof. Sub-s (1): words omitted repealed by the Localism Act 2011, ss 128(2), 237, Sch 13, Pt 2, para 77(1), (4), Sch 25, Pt 20. Date in force: 1 April 2012: see SI 2012/628, art 7. Sub-s (1): words ‘or 106BA(9)’ in square brackets in the first place they occur inserted by the Growth and Infrastructure Act 2013, s 7(2), Sch 2, paras 1, 6(1), (2). Date in force: 25 April 2013: see the Growth and Infrastructure Act 2013, s 35(2); for transitional provisions see s 7(3) thereof. Sub-s (1): in para (b) words ‘before the end of’ in square brackets substituted by the Criminal Justice and Courts Act 2015, s 92(2)(a)(i). Date in force: 13 April 2015: see SI 2015/778, art 3, Sch 1, para 71. Sub-s (1): in para (b) words ‘the day after’ in square brackets inserted by the Criminal Justice and Courts Act 2015, s 92(2)(a)(ii). Date in force: 13 April 2015: see SI 2015/778, art 3, Sch 1, para 71. 928

Appendix 7 Sub-s (1): in para (b) words ‘or 106BA(9)’ in square brackets inserted by the Growth and Infrastructure Act 2013, s 7(2), Sch 2, paras 1, 6(1), (2). Date in force: 25 April 2013: see the Growth and Infrastructure Act 2013, s 35(2); for transitional provisions see s 7(3) thereof. Sub-s (1A): inserted by the Growth and Infrastructure Act 2013, s 7(2), Sch 2, paras 1, 6(1), (3). Date in force: 25 April 2013: see the Growth and Infrastructure Act 2013, s 35(2); for transitional provisions see s 7(3) thereof. Sub-s (1A): words ‘the day after’ in square brackets inserted by the Criminal Justice and Courts Act 2015, s 92(2)(b). Date in force: 13 April 2015: see SI 2015/778, art 3, Sch 1, para 71. Sub-s (2): words omitted repealed by the Localism Act 2011, ss 128(2), 237, Sch 13, Pt 2, para 77(1), (4), Sch 25, Pt 20. Date in force: 1 April 2012: see SI 2012/628, art 7. Sub-s (2): in para (b) words ‘before the end of’ in square brackets substituted by the Criminal Justice and Courts Act 2015, s 92(2)(c)(i). Date in force: 13 April 2015: see SI 2015/778, art 3, Sch 1, para 71. Sub-s (2): in para (b) words ‘the day after’ in square brackets inserted by the Criminal Justice and Courts Act 2015, s 92(2)(c)(ii). Date in force: 13 April 2015: see SI 2015/778, art 3, Sch 1, para 71. Sub-s (2): in para (b) words ‘or 106BA(9)’ in square brackets inserted by the Growth and Infrastructure Act 2013, s 7(2), Sch 2, paras 1, 6(1), (4). Date in force: 25 April 2013: see the Growth and Infrastructure Act 2013, s 35(2); for transitional provisions see s 7(3) thereof. Sub-s (3): inserted by the Growth and Infrastructure Act 2013, s 7(2), Sch 2, paras 1, 6(1), (5). Date in force: 25 April 2013: see the Growth and Infrastructure Act 2013, s 35(2); for transitional provisions see s 7(3) thereof. Sub-s (3): in para (b) words ‘before the end of’ in square brackets substituted by the Criminal Justice and Courts Act 2015, s 92(2)(c)(i). Date in force: 13 April 2015: see SI 2015/778, art 3, Sch 1, para 71. Sub-s (3): in para (b) words ‘the day after’ in square brackets inserted by the Criminal Justice and Courts Act 2015, s 92(2)(c)(ii). Date in force: 13 April 2015: see SI 2015/778, art 3, Sch 1, para 71. See further See further: the High Speed Rail (London—West Midlands) Act 2017, ss 22(7), 50(6).

929

930

Index

[all references are to paragraph number]

Absolute title burden of covenants after first registration, 9.44–9.45 effect of entry of notice in charges register, 9.46–9.48 effect of lack of entry in charges register, 9.52–9.62 first registration, 9.42–9.43 introduction, 9.41 procedure, 9.49–9.51 rectification of charges register, 9.63–9.65 Acquiescence analogous to estoppel, 13.123–13.124 barring claimant’s right in entirety, 13.128–13.131 confining award to nominal damages, 13.128–13.131 effects, 13.127–13.146 meaning, 13.120 minor, by, 13.147 nature, 13.119–13.126 not such as to affect grant of injunction, 13.137–13.146 persuades court to grant damages in lieu of injunction, 13.132–13.136 predecessors in title, by, 13.148–13.151 Acquisition of land by public bodies burdened by covenants altering statutory purposes for which land acquired, 10.61–10.64 compensation for injurious affection assumptions to be made in assessment, 10.84–10.85 date of accrual of right to claim, 10.87 general right, 10.75 limitation period, 10.89–10.91 measure, 10.78–10.85 relevant date for assessment, 10.88 subject matter, 10.76–10.77 compulsory acquisition continued existence of covenants, 10.35–10.39 effect on covenants of burdened land, 10.34–10.60

Acquisition of land by public bodies burdened by covenants – contd compulsory acquisition – contd extent of permitted non-compliance, 10.40–10.60 generally, 10.31–10.32 holding powers to deal with land, 10.33 effect of covenant of protected noncompliance, 10.92–10.94 extension of immunity to individuals and bodies building or maintenance work, 10.68–10.74 lessees of statutory body, 10.67 licensees, 10.67 original covenantors, 10.65–10.66 Adjacent meaning, 11.111–11.118 Adjoining meaning, 11.111–11.118 Adverse possession transmissibility benefit of covenant, 1.51 burden of covenant, 1.51, 9.69–9.70 Agricultural purposes only meaning, 11.119–11.120 Alterations meaning, 11.121 Amusement arcade meaning, 11.122 Ancillary meaning, 11.123–11.125 Annexation assignability not negatived by qualified annexation, 7.4–7.5 automatic passing, 6.2 building schemes, and, 8.22 categories of potential beneficiary, and, 2.1 Conveyancing Act 1881, s 58 effect of Federated Homes, and, 6.26 generally, 6.24–6.25 ‘easily ascertainable’, 6.6 effect, 6.3–6.4 express assignment, and, 7.4–7.5 Federated Homes decision, 6.65–6.79

931

Index Annexation – contd fragmentation of benefited land, 6.3 identification of benefited land from instrument creating covenant post-1925 restrictive covenants, 6.35–6.44 pre-1926 restrictive covenants, 6.6–6.10 intention to benefit identified land content of restriction, 6.20–6.23 Conveyancing Act 1881, s 58, 6.24–6.26 generally, 6.11–6.19 nature of restriction, 6.20–6.25 introduction, 6.1–6.2 land to which annexation takes place, 6.45–6.89 Law of Property Act 1925, s 78(1) exclusion or limitation, 6.42–6.44 generally, 6.27–6.41 introduction, 6.2 land to which annexation takes place, 6.45–6.89 negating pre-existing annexation, 6.93 negating pre-existing annexation generally, 6.90–6.92 introduction, 6.4 Law of Property Act 1925, s 78(1), 6.93 post-1925 restrictive covenants identification of benefited land from instrument creating covenant, 6.35–6.44 introduction, 6.2 ‘relating to the land of the covenantee’, 6.27–6.34 ‘touches and concerns’, 6.30 pre-Federated Homes cases Drake v Gray, 6.57 Re Jeff’s Transfer (No 2), 6.59–6.61 Re Selwyn’s Conveyance, 6.62–6.63 Russell v Archdale, 6.58 Stilwell v Blackman, 6.64 pre-1926 restrictive covenants content of restriction, 6.20–6.23 Conveyancing Act 1881, s 58, 6.24–6.25 ‘easily ascertainable’, 6.6 effect of Federated Homes decision, 6.26 identification of benefited land from instrument creating covenant, 6.6–6.10 intention to benefit identified land, 6.11–6.25 reference to a plan, 6.8 specific description of land, 6.8–6.10 ‘their heirs and assigns’, 6.14

932

Annexation – contd qualifications, 6.4 qualified annexation assignability not negatived by, 7.4–7.5 ‘relating to the land of the covenantee’, 6.27–6.34 requirements introduction, 6.5 post-1925 restrictive covenants, 6.27–6.44 pre-1926 restrictive covenants, 6.6–6.26 ‘run with the land’, 6.3 unilateral action of person entitled to its benefit, 6.94–6.106 ‘unless the contrary clearly appears’, 6.79–6.82 Annoyance meaning, 11.126–11.136 Anticipatory injunctions generally, 13.40 Appointment of receiver generally, 30.39–30.41 Approval of plans erection of buildings without prior submission constraints arising from special position of person approving, 11.168–11.169 constraints on exercise of power of approval, 11.161–11.167 costs incurred in approval, 11.170 demise of person whose approval is required, 11.83–11.109, 11.171 generally, 11.159–11.160 not to be unreasonably withheld, 11.161–11.166 not to be withheld in bad faith, 11.167 Arbitration remedies for breach of contract, 13.7 Assignment bankruptcy of person entitled to benefit, 7.45–7.46 building schemes, and, 8.22 common law, at, 7.20 Conveyancing Act 1881, s 6, 7.29–7.35 death of person entitled to benefit, 7.43–7.44 equity, in, 7.20 express, 4.2–4.6 extent of benefit, 7.26–7.28 formal requirements, 7.20–7.28 implication, by, 7.41 introduction, 7.1–7.3 language, 7.24–7.25 LPA 1925, s 62(1), 7.29–7.35

Index Assignment – contd LPA 1926, s 63, 7.36–7.40 notice, 7.23 operation of law, by bankruptcy, 7.45–7.46 death, 7.43–7.44 qualified annexation, and, 7.4–7.5 statute, under, 7.21–7.22 timing, 7.6–7.19 unbroken chain requirement, 7.42 Bankruptcy of person entitled to benefit assignment by operation of law, 7.45–7.46 vesting of benefit in trustee, 7.45–7.46 Beerhouse meaning, 11.138 Beershop meaning, 11.137 Beneficial owners transmissibility, 1.63 Beneficiaries See also Claimants categories, 2.1–2.2 covenant beneficiaries, 4.1–4.7 original covenantees, 3.1–3.12 subsequent owners and occupiers of land annexation, 6.1–6.106 building schemes, 8.1–8.126 express assignment, 7.1–7.46 general rule, 5.1–5.2 statutory exception, 5.3 Benefit of positive covenants common law rules for running of rights of third parties, 27.39, 29.35 subsequent owners and occupiers, 27.1–27.38 transmissibility, 27.40–27.41 building scheme, 26.8 LPA 1925, s 56(1), and, 26.4–26.7 original covenantees building scheme, under, 26.8 categories, 26.3–26.8 introduction, 26.1–26.2 LPA 1925, s 56(1), under, 26.4–26.7 named as party, 26.3 RPA 1845, s 5, under, 26.4–26.7 persons entitled to claim benefit original covenantees, 26.1–26.8 subsequent owners and occupiers, 27.1–27.41 Real Property Act 1845, s 5, and, 26.4–26.7 rights of third parties, 27.39, 29.35

Benefit of positive covenants – contd subsequent owners and occupiers common law rules, 27.3–27.24 effect of satisfying rules, 27.25–27.26 entry into covenant with owner of legal estate, 27.12–27.13 intention that benefit shall run with the land, 27.20–27.24 introduction, 27.1–27.2 modification of rules by equity and statute, 27.27–27.38 performance must have distinct connection with land, 27.4–27.6 person seeking to enforce must have legal estate, 27.14–27.19 relation to clearly identifiable land, 27.7–27.11 ‘touch and concern’ test, 27.4–27.6 ‘touch and concern’ test, 27.4–27.6 transmissibility benefit only, of, 27.40–27.41 common law rules, 27.1–27.38 generally, 27.3–27.41 Benefit of restrictive covenants See also Claimants; Restrictive covenants annexation, 6.1–6.106 assignment, 7.1–7.46 building schemes, 8.1–8.126 categories of potential beneficiaries, 2.1–2.2 covenant beneficiaries, 4.1–4.7 original covenantees, 3.1–3.12 public bodies deemed ownership of benefited land, 10.7–10.14 enforcement without use of deeming provisions, 10.15–10.22 introduction, 10.3–10.5 subsequent owners and occupiers of land, 5.1–5.3 Breach of condition rentcharges, 29.45–29.51 Breach of covenant And see Remedies remedies acquiescence, 13.119–13.151 arbitration, 13.7 changes in character of neighbourhood, 13.167–13.171 damages, 13.73–13.111 damages at common law, 13.184–13.191 declaration, 13.9–13.23 defences, 13.111–13.171 estoppels, 13.152–13.156 general, 13.8–13.110 inequitable conduct, 13.157–13.166

933

Index Breach of covenant – contd remedies – contd injunctions, 13.24–13.53 interim injunctions, 13.54–13.72 introduction, 13.1–13.2 laches, 13.119–13.146 limitation period, 13.114–13.118 right of entry, 13.3–13.4 right of re-entry, 13.5–13.6 stay of proceedings, 13.172–13.183 terms agreed between parties, and, 13.3–13.7 unconscionable conduct, 13.157–13.166 Building erection for specific purpose, 11.155–11.157 erection within specified distance of property, 11.158 erection without prior submission of plans for approval constraints arising from special position of person approving, 11.168–11.169 constraints on exercise of power of approval, 11.161–11.167 costs incurred in approval, 11.170 demise of person whose approval is required, 11.83–11.109, 11.171 generally, 11.159–11.160 not to be unreasonably withheld, 11.161–11.166 not to be withheld in bad faith, 11.167 meaning, 11.139–11.149 mobile homes, 11.150–11.154 temporary structures, 11.150–11.154 use for specific purpose, 11.155–11.157 Building schemes acquiescence in breach of covenant, and, 8.22 annexation, and, 8.22 assignment by former estate owner of benefit of covenant, 8.103 change of estate owner, 8.49 ‘common vendor’, 8.46–8.49 deeds of mutual covenant backcloth, as, 8.6–8.7 forefront, at, 8.3–8.5 documentary evidence, 8.78–8.85 essential elements identification of defined area of land to be sold, 8.33–8.55 intention that covenants to be enforceable on reciprocal basis, 8.56–8.76 introduction, 8.29–8.32

934

Building schemes – contd evidence documentary evidence, 8.78–8.85 introduction, 8.77 oral evidence, 8.86–8.87 evolution deeds of mutual covenant, 8.3–8.7 equity, 8.13–8.21 introduction, 8.2 underlying intention, 8.8–8.12 express assignment, and, 8.22 facts establishing existence consideration of factors together, 8.88–8.89 documentary evidence, 8.78–8.85 evidence, 8.77 identification of defined area of land to be sold, 8.33–8.55 intention that covenants to be enforceable on reciprocal basis, 8.56–8.76 introduction, 8.25–8.32 oral evidence, 8.86–8.87 facts negating existence assignment by former estate owner of benefit of covenant, 8.103 inclusion of covenant by vendor to enforce covenants by other purchasers, 8.101–8.102 introduction, 8.90 power reserved to estate vendor to release or vary covenants, 8.93–8.100 retention of land by estate vendor, 8.92 unaware of intention of estate vendor to create scheme, 8.91 freeing the title, and, 14.1 identification of defined area of land to be sold ‘common vendor’, 8.46–8.49 introduction, 8.33–8.45 prior lotting, 8.50–8.55 implied covenants, and, 8.22 inclusion of covenant by vendor to enforce covenants by other purchasers, 8.101–8.102 intention that covenants to be enforceable on reciprocal basis, 8.56–8.76 introduction, 8.1 legal effects, 8.23–8.24 LPA 1925, s 56, and, 8.22 negating factors assignment by former estate owner of benefit of covenant, 8.103 inclusion of covenant by vendor to enforce covenants by other purchasers, 8.101–8.102

Index Building schemes – contd negating factors – contd introduction, 8.90 power reserved to estate vendor to release or vary covenants, 8.93–8.100 retention of land by estate vendor, 8.92 unaware of intention of estate vendor to create scheme, 8.91 oral evidence, 8.86–8.87 positive covenants, and, 26.8 power reserved to estate vendor to release or vary covenants, 8.93–8.100 prior lotting, 8.50–8.55 purchaser(s) unaware of intention of estate vendor to create scheme, 8.91 registration of obligations registered land, 8.121–8.126 unregistered land, 8.104–8.120 retention of land by estate vendor, 8.92 revival of covenant on subsequent severance of merged plots, 8.22 subdivision of parcel of scheme land, 8.22 underlying intention, 8.8–8.12 unawareness of intention of estate vendor to create scheme, 8.91 Building work extension of immunity to individuals and bodies, 10.68–10.74 Bungalow meaning, 11.172 Burden of positive covenants breach of condition as to rentcharge, 29.45–29.51 capital sums, 29.55–29.58 chain of indemnity covenants, 29.108–29.110 change of ownership introduction, 29.92 registered land, 29.95–29.97 unregistered land, 29.93–29.94 Church of England land, 28.19–28.20 conditions attached to property rights examples, 29.73–29.83 general principle, 29.72 running of the benefit, 29.88 running of the burden, 29.84–29.87 council housing, 28.21 countryside management agreements, 28.18 covenants on every change of ownership introduction, 29.92 registered land, 29.95–29.97 unregistered land, 29.93–29.94

Burden of positive covenants – contd enlargement of lease benefit of the covenants, 29.103–29.104 burden of the covenants, 29.102 land registration, 29.107 LPA 1925, s 153, 29.100–29.101 practical application, 29.105–29.106 rule in Spencer’s case, 29.98–29.99 exceptions to general rule, 28.15–28.28 fencing ‘easements’ generally, 29.112–29.115 introduction, 29.111 scope, 29.116–29.117 words of grant, 29.118–29.120 frequency of use, 25.10 general rule, 28.13 Highways Act 1980, s 35, and, 28.16 Housing Act 1985, ss.155–156, and, 28.21 introduction, 28.1–28.3 land registration, 28.14 lease of easements elements of scheme, 29.89 operation of scheme, 29.90–29.91 Leasehold Reform Act 1967, s 19, and, 28.23–28.25 LG(MP)A 1982, s 33, and, 28.17 local Acts, 28.26–28.28 local land charges, 28.29 long lease followed by enlargement benefit of the covenants, 29.103–29.104 burden of the covenants, 29.102 land registration, 29.107 LPA 1925, s 153, 29.100–29.101 practical application, 29.105–29.106 rule in Spencer’s case, 29.98–29.99 LPA 1925, s 79, and, 28.9–28.12 meaning, 25.2–25.4 Mission and Pastoral Measure, and, 28.19–28.20 performance by indirect methods covenants on every change of ownership, 29.92–29.97 enlargement of lease, 29.98–29.107 introduction, 29.1 lease of easements, 29.89–29.91 property rights, 29.72–29.88 rentcharges, 29.68–29.71 right of entry, 29.59–29.67 right of re-entry, 29.2–29.58 planning obligations, 28.22 private Acts, 28.26–28.28 property rights, 29.72–29.88

935

Index Burden of positive covenants – contd relief from forfeiture equitable right of re-entry, 29.31–29.34 legal right of re-entry annexed to rentcharge, 29.24–29.30 non-payment of rent, 29.24–29.26 non-rent related covenants, 29.27–29.30 rentcharges extinguishment, and, 29.71 generally, 29.68–29.70 redemption, and, 29.71 relief from forfeiture, 29.24–29.30 right of entry, and, 29.66 right of re-entry, and, 29.5–29.43 use, 29.68–29.71 right of entry equitable rights, 29.64–29.65 legal rights, 29.64 nature, 29.59–29.61 perpetuity rule, 29.62–29.63 practical use, 29.67 rentcharge, 29.66 running of the benefit, 29.66 running of the burden, 29.64–29.65 right of re-entry breach of condition as to rentcharge, 29.45–29.51 capital sums, 29.55–29.58 chain of indemnity covenants, 29.108–29.110 common law, at, 29.4 court order, 29.19 effect, 29.20–29.23 enforceability, 29.12–29.14 equitable rights, 29.5–29.11 exercise, 29.18–29.19 fencing ‘easements’, 29.111–29.120 introduction, 29.3 legal rights, 29.5–29.11 legislation of 1925, and, 29.5–29.11 limitation period, 29.40–29.43 monetary obligations, 29.55–29.58 non-payment of rent, 29.24–29.26 order of court, 29.19 overage clauses, 29.56–29.58 peaceable re-entry, 29.18 perpetuity rule, 29.36–29.39 practical use, 29.44–29.54 procedure when event occurs allowing exercise, 29.15–29.17 relief from forfeiture, 29.24–29.34 successors, against, 29.12–29.14 transmissibility, 29.35 rule in Austerberry v Oldham Corp, 28.4–28.8 schemes of management, 28.23–28.25

936

Burden of positive covenants – contd section 106 agreements, 28.22 TCPA 1990, s 106, and, 28.22 ‘walkway’ agreements, 28.16 wildlife management agreements, 28.18 Burden of restrictive covenants absolute title after first registration, 9.44–9.45 effect of entry of notice in charges register, 9.46–9.48 effect of lack of entry in charges register, 9.52–9.62 first registration, 9.42–9.43 introduction, 9.41 procedure, 9.49–9.51 rectification of charges register, 9.63–9.65 equitable easements, and, 9.2 introduction, 9.1–9.3 leasehold estates, 9.68 leases, and, 9.71–9.72 local land charges, 9.73 nature, 9.1–9.3 possessory title, 9.66 post-1925 covenants effect of registration, 9.27–9.39 introduction, 9.25 lessees, and, 9.28–9.30 notice, 9.26–9.39 right in rem, 9.31–9.34 pre-1926 covenants bona fide purchaser, 9.12 burden entirely ceases to run, 9.7 burden partially ceases to run, 9.8–9.9 consideration, 9.13 introduction, 9.5–9.6 legal estate, 9.14 lessees, and, 9.22–9.24 requirements, 9.10–9.24 underlessees, and, 9.22–9.24 valuable consideration, 9.13 without notice, 9.15–9.24 qualified title, 9.67 registered land absolute title, 9.41–9.65 introduction, 9.40 leasehold estates, 9.68 possessory title, 9.66 qualified title, 9.67 squatters, 9.70 squatters registered land, 9.70 unregistered land, 9.69 unregistered land introduction, 9.4 post-1925 covenants, 9.25–9.39 pre-1926 covenants, 9.5–9.24 squatters, 9.69

Index Business meaning, 11.173 overlap between two businesses, 11.174–11.184 use of land for ancillary purposes, 11.185–11.188 Capital sums right of re-entry, 29.55–29.58 Ceasing to be enforceable at law or in equity generally, 15.2–15.8 Certainty of terms construction of covenants, 11.31–11.37 Chain of indemnity covenants burden of positive covenants, 29.108–29.110 Change of ownership introduction, 29.92 registered land, 29.95–29.97 unregistered land, 29.93–29.94 Changes in character of neighbourhood defence to breach of contract, 13.167–13.171 Charges register burden of covenants See also Burden of covenants after first registration, 9.45 first registration, 9.43 procedure, 9.49 rectification, 9.63 squatters, 9.70 Church of England land burden of positive covenants, 28.19–28.20 deemed ownership of benefited land, 10.11–10.12 Claimants annexation See also Annexation effect, 6.1–6.4 Federated Homes decision, 6.65–6.79 land to which annexation takes place, 6.45–6.89 negating pre-existing annexation, 6.90–6.93 post-1925 covenants, 6.27–6.44 pre-Federated Homes cases, 6.57–6.64 pre-1926 covenants, 6.6–6.26 qualifications, 6.4 requirements, 6.5–6.56 unilateral action of person entitled to its benefit, 6.94–6.106 assignment See also Assignment bankruptcy of person entitled to benefit, 7.45–7.46

Claimants – contd assignment – contd common law, at, 7.20 Conveyancing Act 1881, s 6, 7.29–7.35 death of person entitled to benefit, 7.43–7.44 equity, in, 7.20 extent of benefit, 7.26–7.28 formal requirements, 7.20–7.28 introduction, 7.1–7.3 language, 7.24–7.25 LPA 1925, s 62(1), 7.29–7.35 LPA 1926, s 63, 7.36–7.40 notice, 7.23 operation of law, by, 7.43–7.46 qualified annexation, and, 7.4–7.5 statute, under, 7.21–7.22 timing, 7.6–7.19 unbroken chain requirement, 7.42 building schemes See also Building schemes evolution, 8.2–8.22 facts to be proved, 8.25–8.89 introduction, 8.1 legal effects, 8.23–8.24 negating factors, 8.90–8.103 registration of obligations, 8.104–8.126 categories, 2.1–2.2 Contracts (Rights of Third Parties) Act 1999, and generally, 3.9–3.11 positive covenants, 27.39 remedies, 3.12 right of re-entry, as to, 29.35 covenant beneficiaries determining identity of party to action to enforce, 4.7 introduction, 4.1 relationship with building schemes, 4.2–4.6 express assignment bankruptcy of person entitled to benefit, 7.45–7.46 common law, at, 7.20 Conveyancing Act 1881, s 6, 7.29–7.35 death of person entitled to benefit, 7.43–7.44 equity, in, 7.20 extent of benefit, 7.26–7.28 formal requirements, 7.20–7.28 introduction, 7.1–7.3 language, 7.24–7.25 LPA 1925, s 62(1), 7.29–7.35 LPA 1926, s 63, 7.36–7.40 notice, 7.23

937

Index Claimants – contd express assignment – contd operation of law, by, 7.43–7.46 qualified annexation, and, 7.4–7.5 statute, under, 7.21–7.22 timing, 7.6–7.19 unbroken chain requirement, 7.42 implied assignment, 7.41 Law of Property Act 1925 s 56, under, 3.4 original covenantees effect of loss of rights of enforcement, 3.7–3.8 introduction, 3.1 owners’ of land within building scheme, 3.5–3.6 parties to original deed, 3.2 virtue of statutory provision, by, 3.3–3.4 owners’ of land within building scheme at time when other land sold off, 3.5–3.6 parties to the instrument containing covenant, 3.2 public bodies deemed ownership of benefited land, 10.7–10.14 enforcement without use of deeming provisions, 10.15–10.22 introduction, 10.3–10.5 Real Property Act 1845 s 5, under, 3.3 subsequent owners and occupiers of benefited land annexation, 6.1–6.106 building schemes, 8.1–8.126 express assignment, 7.1–7.46 general rule, 5.1–5.2 statutory exception, 5.3 third party rights generally, 3.9–3.11 remedies, 3.12 positive covenants, 27.39 remedies, 3.12 right of re-entry, as to, 29.35 trusts, and determining identity of party to action to enforce, 4.7 introduction, 4.1 relationship with building schemes, 4.2–4.6 virtue of statutory provision, by, 3.3–3.4 Commercial common sense construction of covenants, 11.12–11.19 Commonhold advantages, 31.2–31.3 background, 31.1

938

Commonhold – contd enforceability of obligations, 31.8–31.11 frequency, 31.18–31.19 introduction, 31.1 nature, 31.4–31.7 winding-up of associations compulsory, 31.16–31.17 voluntary, 31.12–31.15 Companies capacity to enter into covenants, 1.65 Compensation discharge under LPA 1925, s 84(1) ‘any effect restriction had in reducing consideration received’, 23.51–23.55 assessment, 23.5–23.7 discretion, 23.8 general power, 23.1 heads of award, 23.8–23.55 loss incapable of precise measurement, 23.16–23.37 loss of amenities, 23.13–23.46 loss of bargaining powers, 23.38–23.46 ‘loss or disadvantage suffered’, 23.9–23.49 loss of value, 23.10–23.11 orders, 23.56 other losses, 23.47–23.48 persons entitled, 23.2–23.4 ‘sum the Tribunal may think it just to award’, 23.50–23.55 injurious affection assumptions to be made in assessment, 10.84–10.85 date of accrual of right to claim, 10.87 general right, 10.75 limitation period, 10.89–10.91 measure, 10.78–10.85 relevant date for assessment, 10.88 subject matter, 10.76–10.77 Competition law ‘anchor’ tenants, 12.11 ‘appreciably restricted’, 12.6 categories of agreement with potential to restrict competition, 12.7–12.8 Competition Act 1998, Chapter I ‘anchor’ tenants, 12.11 ‘appreciably restricted’, 12.6 categories of agreement, 12.7–12.8 coverage, 12.6–12.9 economic benefits, 12.11 effects of breach, 12.14–12.16 example, 12.12 exclusivity arrangements, 12.6 exemptions, 12.10–12.13

Index Competition law – contd Competition Act 1998, Chapter I – contd generally, 12.4–12.5 land agreements exclusion revocation, 12.4 retail outlets, 12.6 economic benefits, 12.11 effect on land covenants, 12.2 enforcement of exclusivity arrangements, 12.23 exclusivity arrangements introduction, 12.6 meaning, 12.26 prohibition of entering into, 12.24 prohibition on enforcement, 12.23 general, 12.1–12.3 Groceries Market Investigation Order 2010 application, 12.18 ‘exclusivity arrangement’, 12.26 introduction, 12.17 ‘large grocery retailers’, 12.18 prohibition of entering into covenants, 12.22 prohibition of entering into exclusivity arrangements, 12.24 prohibition on enforcement of exclusivity arrangements, 12.23 release of specified existing covenants, 12.19–12.21 ‘restricted covenant’, 12.25 ‘site’, 12.26 potential to restrict competition, 12.7–12.8 release of specified existing covenants, 12.19–12.21 restricted covenants meaning, 12.25 prohibition of entering into, 12.22 retail outlets, 12.6 UK law, 12.4–12.26 Compulsory acquisition compensation assumptions to be made in assessment, 10.84–10.85 date of accrual of right to claim, 10.87 general right, 10.75 limitation period, 10.89–10.91 measure, 10.78–10.85 relevant date for assessment, 10.88 subject matter, 10.76–10.77 continued existence of covenants, 10.35–10.39 effect on covenants of burdened land, 10.34–10.60 extent of permitted non-compliance, 10.40–10.60

Compulsory acquisition – contd generally, 10.31–10.32 holding powers to deal with land, 10.33 Conditions attached to property rights examples, 29.73–29.83 general principle, 29.72 running of the benefit, 29.88 running of the burden, 29.84–29.87 Construction of covenants certainty of terms, 11.31–11.37 commercial common sense, 11.12–11.19 commonly used words, 11.110–11.253 contra proferentem rule, 11.20–11.21 death of vendor, 11.83–11.109 estoppels, 11.6 existence of covenant, 11.2–11.4 general approach, 11.7–11.19 implied covenants, 11.5 implied terms in covenants, 11.22–11.26 liability of original covenantor for acts of subsequent owners generally, 11.54–11.62 negativing personal liability, 11.63–11.66 liability of present owner for acts or omissions of earler owner adoption of predecessor’s breach, 11.80 generally, 11.67–11.70 independent ‘continuing’ breach, 11.71–11.76 participation in predecessor’s breach, 11.77–11.79 natural and ordinary meaning, 11.12–11.19 object of covenant, 11.8 persons within scope of benefit of covenant common law, 11.38–11.40 Conveyancing Act 1881, s 58, 11.41–11.42 Law of Property Act 1925, s 78(1), 11.43–11.44 persons within scope of burden of covenant introduction, 11.45 post-1925 covenants, 11.48–11.53 pre-1926 covenants, 11.46–11.47 principles, 11.1–11.28 rectification, and, 11.27–11.28 references to covenantee or covenantor death of vendor, 11.109 drafting solutions, 11.105–11.108 generally, 11.81–11.104 specific areas, 11.29 terms, 11.31–11.37

939

Index Contiguous meaning, 11.111–11.118 Contra proferentem rule construction of covenants, 11.20–11.21 Contracting purchasers transmissibility, 1.69–1.71 Contracting vendors transmissibility, 1.51 Contracts (Rights of Third Parties) Act 1999 generally, 3.9–3.11 positive covenants, 27.39 remedies, 3.12 right of re-entry, as to, 29.35 Council housing burden of positive covenants, 28.21 Countryside management agreements burden of positive covenants, 28.18 Court orders right of re-entry, 29.19 Conveyancing Act 1881 annexation effect of Federated Homes, and, 6.26 generally, 6.24–6.25 assignment, 7.29–7.35 construction of covenants, 11.41–11.42 Covenant beneficiaries determining identity of party to action to enforce, 4.7 introduction, 4.1 relationship with building schemes, 4.2–4.6 Covenantees (positive covenants) building scheme, under, 26.8 categories, 26.3–26.8 introduction, 26.1–26.2 LPA 1925, s 56(1), under, 26.4–26.7 named as party, 26.3 RPA 1845, s 5, under, 26.4–26.7 Covenantees (restrictive covenants) effect of loss of rights of enforcement, 3.7–3.8 introduction, 3.1 Law of Property Act 1925 s 56, under, 3.4 owners’ of land within building scheme, 3.5–3.6 parties to original deed, 3.2 public bodies deemed ownership of benefited land, 10.7–10.14 enforcement without use of deeming provisions, 10.15–10.22 introduction, 10.3–10.5 Real Property Act 1845 s 5, under, 3.3 virtue of statutory provision, by, 3.3–3.4

940

Covenantors beneficial owners, 1.63 companies, 1.65 extension of immunity to individuals and bodies, 10.65–10.66 fiduciary owners, 1.64 introduction, 1.62 local authorities, 1.66 statutory corporations, 1.66–1.67 Damages (positive covenants) addition to specific performance, in generally, 30.16–30.18 introduction, 30.14 jurisdiction, 30.14 measure, 30.20–30.25 common law, at assessment of loss, 30.34–30.38 breach complained of, 30.31 date for ascertaining loss, 30.34–30.36 generally, 30.29–30.30 measure, 30.32–30.33 method of assessing loss, 30.37–30.38 Lord Cairns’ Act, under, 30.15 substitution to specific performance, in generally, 30.19 introduction, 30.14 jurisdiction, 30.14 measure, 30.20–30.25 Damages (restrictive covenants) addition to injunction, in, 13.78–13.80 common law, at, 13.184–13.191 discretion of court, 13.77–13.99 introduction, 13.73 jurisdiction, 13.74–13.76 measure under Lord Cairns’ Act, 13.100–13.110 substitution for injunction, in, 13.81–13.99 Death of person entitled to benefit assignment, 7.43–7.44 Death of vendor construction of covenants, 11.83–11.109 Declarations addition to injunction, in, 13.19–13.23 interim declarations, 13.16–13.18 jurisdiction, 13.9–13.15 Law of Property Act 1925, s 84(2), under commencement, 14.14–14.17 consequential relief, 14.31 costs, 14.32–14.33 county court jurisdiction, 14.17 discretion of court, 14.28–14.30 evidence, 14.22–14.27 form, 14.14

Index Declarations – contd Law of Property Act 1925, s 84(2), under – contd forum, 14.13 Part 7, 14.14 Part 8, 14.14–14.16 parties, 14.18–14.21 powers of court, 14.4–14.7 procedure, 14.13–14.33 scope of power, 14.8–14.12 statutory provision, 14.4 statutory basis, 13.10 Deemed ownership of benefited land Church of England land, 10.11–10.12 disposal of land held by local authority for housing purposes, 10.11 effects of provisions, 10.13–10.14 forestry dedication covenant, 10.11 generally, 10.7–10.14 National Trust, 10.11 planning matters, 10.7–10.10 Delay analogous to estoppel, 13.123–13.124 barring claimant’s right in entirety, 13.128–13.131 confining award to nominal damages, 13.128–13.131 effects, 13.127–13.146 meaning, 13.120 minor, by, 13.147 nature, 13.119–13.126 not such as to affect grant of injunction, 13.137–13.146 persuades court to grant damages in lieu of injunction, 13.132–13.136 predecessors in title, by, 13.148–13.151 Demise of vendor construction of covenants, 11.83–11.109 Discharge See also Discharge or modification under LPA 1925, s 84(1) release, by, 15.12 variation, by, 15.37 Discharge or modification under LPA 1925, s 84(1) See also Upper Tribunal proceedings for discharge or modification under LPA 1925, s 84(1) admissible evidence, 16.134 ‘affected’ determinations whether anyone entitled to enforce, 16.26–16.27 generally, 16.24–16.25 purely personal covenants, 16.28–16.31 affecting freehold which run with land and existed at date when lease granted, 16.17–16.18

Discharge or modification under LPA 1925, s 84(1) – contd ‘agreed by acts and omissions’ discretion of Tribunal, and, 21.23 ‘entitled to benefit of restriction;, 21.1–21.3 ‘expressly or by implication, acts or omissions’, 21.8–21.15 ‘have agreed by implication’, 21.12–21.15 ‘in respect of estates in fee simple or any lesser estates’, 21.4–21.5 interaction with paragraphs (aa) or (c), 21.16–21.19 ‘persons of full age and capacity’, 21.8–21.15 ‘property to which benefit of restriction is annexed’, 21.6–21.7 use of paragraph (b), 21.20–21.22 amenity of building, 16.109 ancillary discretion, 16.135–16.139 ‘any declared or ascertainable pattern’, 16.74–16.76 ‘any restriction arising under covenant or otherwise as to user or building’ ‘arising under covenant or otherwise’, 16.42–16.48 ‘building’, 16.36–16.41 introduction, 16.32 ‘restrictive’, 16.33–16.35 ‘user’, 16.36–16.41 ‘appearing to have the benefit of the restriction’, 16.8 applicant is the original covenantor, 16.92–16.100 applicants, 16.5–16.6 application runs counter to underlying purpose of covenant, 16.115 as to part only of applicant’s land affected by restriction, 17.10 ‘as well as any other material circumstances’, 16.81–16.82 ‘as well as context in which restriction was created or imposed’, 16.80 ‘as well as period at which restriction was created or imposed’, 16.77–16.79 ‘building’ on land, 16.36–16.41 building schemes, 16.116–16.117 ‘by reason of changes in character’ introduction, 19.1 neighbourhood, of the, 19.6–19.23 ‘obsolete’, 19.24–19.46 property, of the, 19.2–19.5 ‘by reason of changes in character of the neighbourhood’

941

Index Discharge or modification under LPA 1925, s 84(1) – contd ‘by reason of changes in character of the neighbourhood’ – contd character of original neighbourhood, 19.13 character of present neighbourhood, 19.22 differences between character of neighbourhood rendering restriction obsolete, 19.23 identity of original neighbourhood, 19.12 identity of present neighbourhood, 19.14–19.21 introduction, 19.6 ‘neighbourhood’, 19.7–19.10 ‘by reason of changes in character of the property’, 19.2–19.5 ‘by reason of other circumstances of the case deemed material’ changes affecting benefitted land, 19.56–19.60 character of adjoining neighbourhood, 19.50 development plans, 19.64 disregarded circumstances, 19.63–19.70 ejusdem generis rule, and, 19.63 loss of ability to enforce covenant, 19.61–19.62 material other circumstances, 19.50–19.62 pattern of planning permissions, 19.64 permission for development of application land, 19.65–19.68 planning matters, 19.64–19.68 property-related matters, 19.51–19.55 public interest, 19.69–19.70 scope of other circumstances, 19.47–19.49 changes affecting benefitted land, 19.56–19.60 ‘changes in character of the neighbourhood’ character of original neighbourhood, 19.13 character of present neighbourhood, 19.22 differences between character of neighbourhood rendering restriction obsolete, 19.23 identity of original neighbourhood, 19.12 identity of present neighbourhood, 19.14–19.21

942

Discharge or modification under LPA 1925, s 84(1) – contd ‘changes in character of the neighbourhood’ – contd introduction, 19.6 ‘neighbourhood’, 19.7–19.10 ‘changes in character of the property’, 19.2–19.5 changes in property benefited by restriction, 16.101 character of adjoining neighbourhood, 19.50 character of original neighbourhood differences from present neighbourhood, 19.23 generally, 19.13 introduction, 19.6 ‘neighbourhood’, 19.7–19.10 character of present neighbourhood differences from original neighbourhood, 19.23 generally, 19.22 introduction, 19.6 ‘neighbourhood’, 19.7–19.10 combined applications, 16.6 compensation ‘any effect restriction had in reducing consideration received’, 23.51–23.55 assessment, 23.5–23.7 discretion, 23.8 general power, 23.1 heads of award, 23.8–23.55 loss incapable of precise measurement, 23.16–23.37 loss of amenities, 23.13–23.46 loss of bargaining powers, 23.38–23.46 ‘loss or disadvantage suffered’, 23.9–23.49 loss of value, 23.10–23.11 orders, 23.56 other losses, 23.47–23.48 persons entitled, 23.2–23.4 ‘sum the Tribunal may think it just to award’, 23.50–23.55 concurrent to powers exercisable by courts, 16.51–16.55 ‘continued existence would impede reasonable user of land’ ‘does impeding proposed user not secure practical benefits’, 20.13–20.34 ‘if practical benefits secured, are they of substantial value or advantage’, 20.35–20.53 introduction, 20.1–20.5 ‘is impeding user contrary to public interest’, 20.54–20.76

Index Discharge or modification under LPA 1925, s 84(1) – contd ‘continued existence would impede reasonable user of land’ – contd ‘is proposed user reasonable’, 20.6–20.11 ‘would continued existence of restriction impede proposed user’, 20.12 ‘would money be adequate compensation’, 20.77–20.97 coverage, 16.9–16.49 development plan ‘by reason of other circumstances of the case deemed material’, 19.64 generally, 16.71–16.73 discretion of Tribunal ancillary discretion, 16.135–16.139 ‘any declared or ascertainable pattern’, for planning permissions in area, 16.74–16.76 applicant is the original covenantor, 16.92–16.100 application runs counter to underlying purpose of covenant, 16.115 ‘any other material circumstances’, 16.81–16.82 ‘as well as context in which restriction was created or imposed’, 16.80 ‘as well as period at which restriction was created or imposed’, 16.77–16.79 building schemes, 16.116–16.117 changes in property benefited by restriction, 16.101 concurrent to powers exercisable by courts, 16.51–16.55 ‘context in which restriction was created or imposed’, 16.80 ‘development plan’, 16.71–16.73 discretionary nature, 16.56–16.58 doubt as to relevancy of factor, 16.119–16.132 evidence requirement, 16.134 exercise of discretion, 16.59–16.139 existence of permission to carry out development, 16.112–16.113 ‘grounds’ giving rising to, 18.1–18.5 injury to objector, 16.114 introduction, 16.50 irrelevant factors, 16.118 lack of definite plans of proposed development in evidence, 16.110–16.111

Discharge or modification under LPA 1925, s 84(1) – contd discretion of Tribunal – contd must not appear that discretion exercised unmindful of a factor, 16.133 past behaviour of applicant, 16.123–16.132 ‘pattern for grant or refusal of planning permissions in relevant areas’, 16.74–16.76 ‘period at which restriction was created or imposed’, 16.77–16.79 personality of applicant, 16.122 ‘recency’ of the freehold land covenant, 16.83–16.90 ‘recency’ of the leasehold land covenant, 16.91 relevant factors, 16.71–16.117 scope, 17.1–17.31 size of building controversial, 16.109 style of building controversial, 16.109 discretionary nature, 16.56–16.58 doubt as to relevancy of factor, 16.119–16.132 evidence requirement, 16.134 exercise of discretion, 16.59–16.139 existence of circumstances specified in 84(1) and (1A) ‘agreed by acts and omissions’, 21.1–21.23 ‘by reason of changes in character’, 19.1–19.46 ‘by reason of other circumstances of the case deemed material’, 19.47–19.70 ‘continued existence would impede reasonable user of land’, 20.1–20.97 introduction, 18.1–18.2 ‘not injure persons entitled to the benefit’, 22.1–22.18 ‘persons of full age and capacity... agreed’, 21.1–21.23 related matters, 18.3–18.5 existence of permission to carry out development, 16.112–16.113 ‘freehold land’, 16.10–16.11 generally, 16.4 ‘grounds’ of application ‘agreed by acts and omissions’, 21.1–21.23 ‘by reason of changes in character of property’, 19.1–19.70 ‘continued existence would impede reasonable user of land’, 20.1–20.97

943

Index Discharge or modification under LPA 1925, s 84(1) – contd ‘grounds’ of application – contd discharge to be wholly under a single ground, 18.4, 21.17–21.18 generally, 18.1–18.2 introduction, 18.1–18.2 ‘not injure persons entitled to the benefit’, 22.1–22.18 ‘persons of full age and capacity... agreed’, 21.1–21.23 related matters, 18.3–18.5 identification of restriction, 16.49 identity of the original neighbourhood generally, 19.12 introduction, 19.6 ‘neighbourhood’, 19.7–19.10 identity of the present neighbourhood borderline properties, 19.18–19.21 generally, 19.14–19.17 introduction, 19.6 ‘neighbourhood’, 19.7–19.10 impeding the proposed user, 20.12 impeding user ‘contrary to public interest’ adequacy of compensation, 20.77–20.97 generally, 20.54–20.76 in respect of one or more of original objects of restriction, 17.5 incorporeal hereditaments, 16.19–16.23 injury to objector, 16.114 introduction, 16.1–16.2 irrelevant factors, 16.118 joint applicants, 16.6 jurisdiction of Tribunal ‘affected’, 16.24–16.31 ‘any restriction arising under covenant or otherwise as to user or building’, 16.32–16.48 ‘freehold land’, 16.10–16.11 identification of restriction, 16.49 incorporeal hereditaments, 16.19–16.23 introduction, 16.9 ‘land’, 16.10 leasehold land, 16.12–16.18 lack of definite plans of proposed development in evidence’, 16.110–16.111 ‘land’, 16.10 leasehold land restrictions affecting freehold which run with land and existed at date when lease granted, 16.17–16.18 categories, 16.3 contained in the lease, 16.14 entered into by lessee with third party, 16.16

944

Discharge or modification under LPA 1925, s 84(1) – contd leasehold land restrictions – contd introduction, 16.12–16.13 subsequently entered into by lessee with lessor, 16.15 legal owners, 16.5 lessees under conditional contract, 16.5 limited period, for, 17.11 local authority can oppose notwithstanding grant of planning permission, 10.97–10.98 loss of ability to enforce covenant, 19.61–19.62 mortgagees, 16.5 must not appear that discretion exercised unmindful of a factor, 16.133 no contracting out, 16.4 ‘not injure persons entitled to the benefit’ interaction with paragraph (aa), 22.3–22.4 introduction, 22.1–22.2 ‘persons entitled’, 22.18 ‘proposed discharge or modification’, 22.5 ‘will not injure’, 22.6–22.17 ‘obsolete’ generally, 19.24–19.39 treating restriction as obsolete for purposes only of a modification, 19.40–19.46 occupiers with option to purchase, 16.5 one or more of original objects of restriction, as to, 17.5 opponents, 16.7–16.8 part of words of restriction, of, 17.5 ‘partially to discharge any such restriction’ as to part only of applicant’s land affected by restriction, 17.10 for limited period, 17.11 in respect of one or more of original objects of restriction, 17.5 introduction, 17.4 part of words of restriction, 17.5 severed part of restriction, 17.6–17.9 ‘partially to modify any such restriction’ adding proviso to restriction, 17.23 amending wording of restriction, 17.19–17.22 confined to applicant, 17.27–17.31 deletion of words from restriction, 17.13 for limited period, 17.25–17.26 personal licence, 17.27–17.31

Index Discharge or modification under LPA 1925, s 84(1) – contd ‘partially to modify any such restriction’ – contd providing that words not operate to prevent specified development, 17.23 qualifying words or objects of restriction, 17.23 treating objects of restriction as spent, 17.15–17.18 past behaviour of applicant, 16.123–16.132 ‘pattern for grant or refusal of planning permissions in relevant areas’, 16.74–16.76 pattern of planning permissions, 19.64 permission for development of application land, 19.65–19.68 ‘person interested’, 16.5 personality of applicant, 16.122 ‘persons entitled to benefit of restriction’, 20.15–20.17 ‘persons of full age and capacity’ ‘agreed, expressly or by implication, acts or omissions’, 21.8–21.15 discretion of Tribunal, and, 21.23 ‘entitled to benefit of restriction;, 21.1–21.3 ‘have agreed by implication’, 21.12–21.15 ‘in respect of estates in fee simple or any lesser estates’, 21.4–21.5 interaction with paragraphs (aa) or (c), 21.16–21.19 ‘property to which benefit of restriction is annexed’, 21.6–21.7 use of paragraph (b), 21.20–21.22 planning matters, 19.64–19.68 powers of Tribunal amending the wording of a restriction, 17.19 discharge relating to a severed part of the land only, 17.6–17.9 limited period, 17.1–17.2 modification for limited period only, 17.24–17.26 modification personal to applicant only, 17.27–17.31 personal modification only, 17.27–17.31 ‘partially to discharge’ restriction, 17.4–17.11 ‘partially to modify’ restriction, 17.13–17.22 specified development, to permit, 17.23

Discharge or modification under LPA 1925, s 84(1) – contd powers of Tribunal – contd ‘wholly to discharge’ restriction, 17.3 ‘wholly to modify’ restriction, 17.12 ‘practical benefits’ impeding the proposed user, whether securing ability to demand price for release of covenant not, 20.18–20.19 adequacy of compensation, 20.77–20.97 burden of proof, 20.13 effects of application sought on those with benefit of covenant, 20.31–20.34 evidence required, 20.14 generally, 20.18–20.34 ‘if benefits secured, are they of substantial value or advantage’, 20.35–20.53 meaning of ‘practical benefits’, 20.18–20.34 ‘persons entitled to benefit of restriction’, 20.15–20.17 ‘secure’ such benefit, 20.20–20.23 ‘substantial advantage’, 20.43–20.48 ‘substantial value’, 20.36–20.42 sufficiency of information provided, 20.31–20.34 temporary effects, 20.49–20.53 ‘thin end of the wedge’ argument, 16.102–16.108 practical benefits secured whether of ‘substantial value or advantage’ adequacy of compensation, 20.77–20.97 introduction, 20.35 ‘substantial advantage’, 20.43–20.48 ‘substantial value’, 20.36–20.42 temporary effects, 20.49–20.53 ‘thin end of the wedge’ argument, 16.102–16.108 procedure See Upper Tribunal proceedings for Discharge or Modification under LPA 1925, s 84(1) property-related matters, 19.51–19.55 public interest, 19.69–19.70 ‘public or private purposes’ impeding reasonable use of the land for, 20.9–20.11 publicity, 16.7, 24.11–24.16 purchasers under conditional contract, 16.5 reasonableness of proposed user ‘for public or private purposes’, 20.9–20.11 generally, 20.6–20.8

945

Index Discharge or modification under LPA 1925, s 84(1) – contd ‘recency’ of the covenant freehold land, 16.83–16.90 leasehold land, 16.91 relevant factors, 16.71–16.117 restrictions affecting freehold which run with land and existed at date when lease granted, 16.17–16.18 categories, 16.3 contained in the lease, 16.14 entered into by lessee with third party, 16.16 introduction, 16.12–16.13 subsequently entered into by lessee with lessor, 16.15 ‘restrictive’, 16.33–16.35 scope of powers of Tribunal ‘partially to discharge any such restriction’, 17.4–17.11 ‘partially to modify any such restriction’, 17.13–17.31 ‘wholly to discharge any such restriction’, 17.3 ‘wholly to modify any such restriction’, 17.12 severed part of restriction, of, 17.6–17.9 size of building, 16.109 statutory provisions, 16.3 style of building, 16.109 ‘substantial advantage’, 20.43–20.48 ‘substantial value’, 20.36–20.42 temporary effects, 20.49–20.53 ‘thin end of the wedge’ argument, 16.102–16.108 ‘user’ of land, 16.36–16.41 ‘wholly to discharge any such restriction’, 17.3 ‘wholly to modify any such restriction’, 17.12 ‘will not injure persons entitled to the benefit’ interaction with paragraph (aa), 22.3–22.4 introduction, 22.1–22.2 ‘persons entitled’, 22.18 ‘proposed discharge or modification’, 22.5 ‘will not injure’, 22.6–22.17 ‘would continued existence of restriction impede proposed user’, 20.12 ‘would money be adequate compensation’, 20.77–20.97 Disposal of land held by local authority for housing purposes deemed ownership of benefited land, 10.11

946

Dissolution of vendor See Death of vendor Distance not to erect building within, 11.158 Dwelling houses breach, 11.229 construction of one or more, 11.220 maisonettes, 11.200–11.201 meaning, 11.189–11.199 no building shall be used other than as dwelling, 11.227–11.228 no buildings other than dwellings to be built, 11.221–11.226 not to erect building except a private dwelling, 11.202–11.218 scope of covenants, 11.219–11.228 semi-detached dwellings, 11.200–11.201 Easements analogy of restrictive covenants to, 1.7–1.8 fencing generally, 29.112–29.115 introduction, 29.111 scope, 29.116–29.117 words of grant, 29.118–29.120 Economic benefits competition law, 12.11 Enforcement See also Remedies planning obligations entry upon land, 32.72–32.74 identified planning authority, by, 32.70 injunctions, 32.71 person deriving title, against, 32.57–32.63 recovery of costs of entry, 32.72–32.74 without use of deeming provisions, 10.2, 10.18 right of re-entry registered land, 29.14 unregistered land, 29.12–29.13 Enlargement of lease benefit of the covenants, 29.103–29.104 burden of the covenants, 29.102 land registration, 29.107 LPA 1925, s 153, 29.100–29.101 practical application, 29.105–29.106 rule in Spencer’s case, 29.98–29.99 Equitable easements burden of covenants, and, 9.2 Equitable remedies declaration See also Declarations whether equitable remedy, 13.10–13.11

Index Equitable remedies – contd defence acquiescence, 13.119–13.151 changes in character of neighbourhood, 13.167–13.171 estoppel, 13.152–13.156 inequitable conduct, 13.157–13.166 introduction, 13.111–13.112 laches, 13.119–13.146 limitation, 13.114–13.118 types, 13.113 injunctions See Injunctions Equitable rights right of re-entry generally, 29.5–29.11 practical use, 29.52–29.54 relief from forfeiture, 29.31–29.34 Estoppel covenants arising from, 11.6 defence to breach of covenant, 11.6, 13.152–13.156 Exclusivity arrangements See also Competition law introduction, 12.6 meaning, 12.26 prohibition of entering into, 12.24 prohibition on enforcement, 12.23 Expiry of limitation period defence to breach of covenant, 13.111, 13.114–13.118 Express assignment bankruptcy of person entitled to benefit, 7.45–7.46 building schemes, and, 8.22 common law, at, 7.20 Conveyancing Act 1881, s 6, 7.29–7.35 death of person entitled to benefit, 7.43–7.44 equity, in, 7.20 extent of benefit, 7.26–7.28 formal requirements, 7.20–7.28 introduction, 7.1–7.3 language, 7.24–7.25 Law of Property Act 1925 s 62(1), 7.29–7.35 s 63, 7.36–7.40 notice, 7.23 operation of law, by, 7.43–7.46 qualified annexation, and, 7.4–7.5 statute, under, 7.21–7.22 timing, 7.6–7.19 unbroken chain requirement, 7.42 Express release fiduciary owners, 15.11 form, 15.13–15.14 introduction, 15.1 land charges, 15.15–15.16

Express release – contd minors, 15.12 person under disability, 15.12 persons with power, 15.9–15.12 Extinguishment intervening illegality, by, 15.26–15.27 intervening impossibility, by, 15.28–15.29 introduction, 15.1 statute, by, 15.30 types, 15.17 unity of seisin, by, 15.18–15.25 Fee simple estate transmissibility, 1.51 Fencing easements generally, 29.112–29.115 introduction, 29.111 scope, 29.116–29.117 words of grant, 29.118–29.120 Fiduciary owners capacity to enter into covenants , 1.64 Final injunctions anticipatory injunction, 13.40 claimant with equitable rights mandatory injunction, 13.48–13.53 prohibitory injunction, 13.48–13.53 claimant with legal rights interim injunction, 13.47 introduction, 13.30 mandatory injunction, 13.41–13.46 prohibitory injunction, 13.31–13.39 quia timet injunction, 13.40 generally, 13.27–13.28 interim general considerations, 13.54–13.61 introduction, 13.47 mandatory form, in, 13.68–13.72 principles as to grant, 13.62–13.67 introduction, 13.26 mandatory claimant with equitable rights, 13.48–13.53 claimant with legal rights, 13.41–13.46 prohibitory (claimant with equitable rights), 13.48–13.53 prohibitory (claimant with legal rights) basis of underlying principle, 13.36–13.37 generally, 13.31–13.35 relevant factors, 13.38–13.39 quia timet injunction, 13.40 Forestry dedication covenants deemed ownership of benefited land, 10.11 Forfeiture See Right of re-entry; Relief from Forfeiture

947

Index Freeing the title building schemes, and, 14.1 declaration proceedings commencement, 14.14–14.17 consequential relief, 14.31 costs, 14.32–14.33 county court jurisdiction, 14.17 discretion of court, 14.28–14.30 evidence, 14.22–14.27 form, 14.14 forum, 14.13 CPR Part 7, use of, 14.14 CPR Part 8, use of, 14.14–14.16 parties, 14.18–14.21 powers of court, 14.4–14.7 procedure, 14.13–14.33 scope of power, 14.8–14.12 statutory provision, 14.4 insurance against enforcement, 14.3 introduction, 14.1–14.2 Gardens meaning, 11.230–11.231 Greater London special provisions, 10.20 Groceries Market Investigation Order 2010 application, 12.18 ‘exclusivity arrangement’, 12.26 introduction, 12.17 ‘large grocery retailers’, 12.18 prohibition of entering into covenants, 12.22 prohibition of entering into exclusivity arrangements, 12.24 prohibition on enforcement of exclusivity arrangements, 12.23 release of specified existing covenants, 12.19–12.21 ‘restricted covenant’, 12.25 ‘site’, 12.26 Hotel meaning, 11.232–11.233 House See also Dwelling houses meaning, 11.234 Housing Act 1985, s 610, variation under compensation, 15.36 comparison to Upper Tribunal’s power, 15.37–15.42 county court, application to, 15.31–15.32 generally, 15.31–15.35 matters to be taken into account, 15.33–15.35 power to make, 15.31

948

Housing disposed of by local authority enforcement of covenants under Housing Act 1985, 10.11, 10.17, 28.21 Illegality extinguishment, and, 15.26–15.27 Implied assignment generally, 7.41 Implied covenants generally, 11.5 Implied terms in covenants generally, 11.22–11.26 Impossibility extinguishment, and, 15.28–15.29 Incorporeal hereditaments, discharge or modification under LPA 1925, s 84(1), 16.19–16.23 Inequitable conduct acts of claimant causing change in character of area, 13.165–13.167 breach by claimant or someone through whom he claims, 13.159–13.162 claimant’s disregard of breaches by others, 13.163–13.164 generally, 13.157–13.158 Injunctions (positive covenants) ancillary remedy, as, 30.27 introduction, 30.26–30.28 primary remedy, as, 30.28 Injunctions (restrictive covenants) anticipatory, 13.40 damages, and addition to injunction, in, 13.78–13.80 discretion of court, 13.77–13.99 introduction, 13.73 jurisdiction, 13.74–13.76 measure under Lord Cairns’ Act, 13.100–13.110 substitution for injunction, in, 13.81–13.99 final anticipatory injunction, 13.40 claimant with equitable rights, 13.48–13.53 claimant with legal rights, 13.30–13.47 generally, 13.27–13.28 interim injunction, 13.47, 13.54–13.72 introduction, 13.26 mandatory injunction, 13.41–13.46, 13.48–13.53 prohibitory injunction, 13.31–13.39, 13.48–13.53 quia timet injunction, 13.40

Index Injunctions (restrictive covenants) – contd interim general considerations, 13.54–13.61 introduction, 13.47 mandatory form, in, 13.68–13.72 principles as to grant, 13.62–13.67 mandatory claimant with equitable rights, 13.48–13.53 claimant with legal rights, 13.41–13.46 prohibitory (claimant with equitable rights), 13.48–13.53 prohibitory (claimant with legal rights) basis of underlying principle, 13.36–13.37 generally, 13.31–13.39 relevant factors, 13.38–13.39 quia timet, 13.40 Injurious affection compensation assumptions to be made in assessment, 10.84–10.85 date of accrual of right to claim, 10.87 general right, 10.75 limitation period, 10.89–10.91 measure, 10.78–10.85 relevant date for assessment, 10.88 subject matter, 10.76–10.77 Insurance enforcement, against, 14.3 Interim declarations generally, 13.16–13.18 Interim injunctions general considerations, 13.54–13.61 introduction, 13.47 mandatory form, in, 13.68–13.72 principles as to grant, 13.62–13.67 Laches analogous to estoppel, 13.123–13.124 barring claimant’s right in entirety, 13.128–13.131 confining award to nominal damages, 13.128–13.131 effects, 13.127–13.146 meaning, 13.120 minor, by, 13.147 nature, 13.119–13.126 not such as to affect grant of injunction, 13.137–13.146 persuades court to grant damages in lieu of injunction, 13.132–13.136 predecessors in title, by, 13.148–13.151 Land registration burden of positive covenants, 28.14

Land registration – contd burden of restrictive covenants, 9.40–9.68 rectification, 9.63–9.65 Lands Tribunal transfer of jurisdiction, 16.1–16.2 Law of Property Act 1925 annexation exclusion or limitation, 6.42–6.44 generally, 6.27–6.41 introduction, 6.2 land to which annexation takes place, 6.45–6.89 negating pre-existing annexation, 6.93 assignment, 7.29–7.40 construction of covenants, 11.43–11.44 declarations under s 84(2), 14.4–14.30 discharge under s 84(1) see Discharge or modification under LPA 1925, s 84(1) Lease of easements elements of scheme, 29.89 operation of scheme, 29.90–29.91 Leasehold estates burden of restrictive covenants, 9.68 Leases burden of restrictive covenants, 9.71–9.72 enlargement benefit of the covenants, 29.103–29.104 burden of the covenants, 29.102 land registration, 29.107 LPA 1925, s 153, 29.100–29.101 practical application, 29.105–29.106 rule in Spencer’s case, 29.98–29.99 Licensees transmissibility, 1.51 Limitation period breach of covenant, 13.111, 13.114–13.118 right of re-entry, 29.40–29.43 Local Acts burden of positive covenants, 28.26–28.28 enforcement without use of deeming provisions, 10.19–10.21 Local authorities acquiring land subject to restrictive covenants, 10.31–10.9 authority to enter into covenants, 1.66–1.67 covenantees, as, 10.3–10.22 Housing Act 1985, enforcement of covenants under, 10.17, 28.21 enforcement of planning obligations as planning authority, 32.70–32.74

949

Index Local authorities – contd entry into planning obligations as landowners, 3.53–32.56 enforcement by, 32.70–32.74 enforcement of covenants notwithstanding grant of planning permission, 10.97–10.98, 19.66, 22.18 registration of benefit of covenants as local land charges see Local land charges Local land charges burden of positive covenants, 28.29 burden of restrictive covenants registration requirements, 10.23–10.25 effect of failure to register, 9.37, 10.27–10.30 effect of registration, 9.27 generally, 9.73, 10.23–10.25 cancellation by court, 10.26 Local planning authority See Local authorities Localism local authorities, 10.3 Maintenance work extension of immunity to individuals and bodies, 10.68–10.74 Maisonettes meaning, 11.200–11.201 Management agreements enforcement without use of deeming provisions, 10.17 Mandatory injunctions claimant with equitable rights, 13.48–13.53 claimant with legal rights, 13.41–13.46 Mission and Pastoral Measure burden of positive and other covenants, 28.19–28.20 Mobile homes meaning, 11.150–11.154 Modification of restrictive covenants See Discharge or modification under LPA 1925, s 84(1) Monetary obligations right of re-entry, 29.55–29.58 section 106 obligations, 32.10, 32.16 Mortgagees transmissibility, 1.51 National Trust deemed ownership of benefited land, 10.11 Natural and ordinary meaning construction of covenants, 11.12–11.19

950

Negative covenants See also Positive covenants introduction, 25.1 meaning, 25.5–25.7 transmissibility, 25.8–25.9 Negative easements theory transmissibility, 1.7–1.8 Neighbouring meaning, 11.111–11.118 Non-payment of rent relief from forfeiture conditions for grant, 29.26 generally, 29.24 timing of applications, 29.25 Non-proprietary occupiers transmissibility, 1.51 Not to let for specified purposes meaning, 11.235 Not to use as meaning, 11.236–11.237 Not to use for the purposes of meaning, 11.236–11.237 Nuisance meaning, 11.126–11.136 Offensive trade or business meaning, 11.239 Orders of court right of re-entry, 29.19 Overage clauses right of re-entry, 29.56–29.58 Peaceable entry right of re-entry, 29.18 Permit or suffer meaning, 11.240 Perpetuity rule right of re-entry instruments taking effect before 6 April 2010, 29.36–29.38 instruments taking effect on or after 6 April 2010, 29.39 Planning conditions, generally, 32.12–32.15 Planning matters deemed ownership of benefited land provisions, 10.7–10.10 Planning obligations background, 32.3–32.8 construction, 32.91 discharge appeals, 32.87–32.90 applications, 32.81–32.84 determination of applications, 32.85–32.86 introduction, 32.75–32.76 powers of LPA, 32.77–32.80 distinction from covenants, 32.1–32.2

Index Planning obligations – contd documentation, 33.41 enforceability against person deriving title, 32.57–32.63 enforcement entry upon land, 32.72–32.74 identified planning authority, only by, 32.70 injunctions, 32.71 person deriving title, against, 32.57–32.63 recovery of costs of entry, 32.72–32.74 without use of deeming provisions, 10.2, 10.18 history behind current legislation, 32.3–32.8 interaction with existing restrictive covenants, 32.69 interaction with law of contract, 32.67–32.68 interpretation, 32.91 local Acts, 32.92 local authorities as landowners, entry into by, 32.53–32.56 local land charge registration as, 32.64 failure to register, 32.65–32.66 meaning, 32.16–32.18 modification appeals, 32.87–32.90 applications, 32.81–32.84 determination of applications, 32.85–32.86 introduction, 32.75–32.76 powers of LPA, 32.77–32.80 monetary obligations, 32.10, 32.16 nature, 32.1–32.2 ‘person interested in the land’, 32.29–32.34 planning conditions, and, 32.12–32.15 previous planning agreements, 32.9 registration, 32.64–32.66 requirements documentation, 33.41 introduction, 32.28 ‘person interested in the land’, 32.29–32.34 registration, 32.64–32.66 ‘restricting the development or use in any specified way’, 32.35–32.40 ‘restricting the development or use in any specified way’, 32.35–32.40 restrictive covenants, distinct from, 10.2, 10.18 severability of terms, 32.52 section 106 text, 32.10, Appendix 7 statutory provision, 32.10–33.11

Planning obligations – contd transfer of land, requiring, 32.42–32.51 Upper Tribunal, exclusion of jurisdiction, 32.75 use and value, 32.19–32.27 Planning permission local authority can still oppose discharge or modification, 10.97–10.98 relationship to restrictive covenants, 10.95–10.98, 20.33–20.34, 20.58–20.62, 22.17 pattern to be taken into account on application to discharge or modify, 10.95–10.98 whether to be obtained prior to application to discharge or modify, 19.64–19.68, 20.31–20.34 Plans approval necessary prior to building, 11.159–11.160 approval not to be unreasonably withheld, 11.161–11.166 approval not to be withheld in bad faith, 11.167 constraints on exercise of power of approval, 11.168–11.169 costs incurred in approving, 11.170 demise of person whose approval is required, 11.37–11.108 Pleasure grounds meaning, 11.230–11.231 Positive covenants appointment of receiver, 30.39–30.41 benefit of common law rules for running of, 27.1–27.38 original covenantees, 26.1–26.8 rights of third parties, 27.39 subsequent owners and occupiers, 27.1–27.41 transmission, 27.40–27.41 breach of remedies, 30.1–30.41 building scheme, 26.8 burden of chain of indemnity covenants, 29.108–29.110 change of ownership, 29.92–29.97 Church of England land, 28.19–28.20 conditions attached to property rights, 29.72–29.88 council housing, 28.21 countryside management agreements, 28.18 covenants on every change of ownership, 29.92–29.97

951

Index Positive covenants – contd burden of – contd enlargement of lease, 29.98–29.107 exceptions to general rule, 28.15–28.28 fencing ‘easements’, 29.111–29.120 general rule, 28.13 Highways Act 1980, s 35, and, 28.16 Housing Act 1985, ss 155–156, and, 28.21 introduction, 28.1–28.3 land registration, 28.14 lease of easements, 29.89–29.91 Leasehold Reform Act 1967, s 19, and, 28.23–28.25 LG(MP)A 1982, s 33, and, 28.17 local Acts, 28.26–28.28 local land charges, 28.29 long lease followed by enlargement, 29.98–29.107 LPA 1925, s 79, and, 28.9–28.12 Mission and Pastoral Measure, and, 28.19–28.20 performance by indirect methods, 29.1–29.120 planning obligations, 28.22 private Acts, 28.26–28.28 property rights, 29.72–29.88 rentcharge, 29.68–29.71 right of entry, 29.59–29.67 right of re-entry, 29.3–29.58 rule in Austerberry v Oldham Corp, 28.4–28.8 schemes of management, 28.23–28.25 TCPA 1990, s 106, and, 28.22 ‘walkway’ agreements, 28.16 wildlife management agreements, 28.18 chain of indemnity covenants, 29.108–29.110 change of ownership introduction, 29.92 registered land, 29.95–29.97 unregistered land, 29.93–29.94 Church of England land, 28.19–28.20 conditions attached to property rights examples, 29.73–29.83 general principle, 29.72 running of the benefit, 29.88 running of the burden, 29.84–29.87 council housing, 28.21 countryside management agreements, 28.18 covenants on every change of ownership introduction, 29.92 registered land, 29.95–29.97 unregistered land, 29.93–29.94

952

Positive covenants – contd damages addition to specific performance, in, 30.16–30.18 common law, at, 30.29–30.38 Lord Cairns’ Act, under, 30.15 specific performance, and, 30.14–30.25 substitution for specific performance, in, 30.19 damages at common law assessment of loss, 30.34–30.38 breach complained of, 30.31 date for ascertaining loss, 30.34–30.36 generally, 30.29–30.30 measure, 30.32–30.33 method of assessing loss, 30.37–30.38 damages in addition to specific performance generally, 30.16–30.18 introduction, 30.14 jurisdiction, 30.14 measure, 30.20–30.25 damages in substitution for specific performance generally, 30.19 introduction, 30.14 jurisdiction, 30.14 measure, 30.20–30.25 enlargement of lease benefit of the covenants, 29.103–29.104 burden of the covenants, 29.102 land registration, 29.107 LPA 1925, s 153, 29.100–29.101 practical application, 29.105–29.106 rule in Spencer’s case, 29.98–29.99 fencing ‘easements’ generally, 29.112–29.115 introduction, 29.111 scope, 29.116–29.117 words of grant, 29.118–29.120 frequency of use, 25.10 Highways Act 1980, s 35, and, 28.16 Housing Act 1985, ss 155–156, and, 28.21 injunctions ancillary remedy, as, 30.27 introduction, 30.26–30.28 primary remedy, as, 30.28 introduction, 25.1 land registration, 28.14 lease of easements elements of scheme, 29.89 operation of scheme, 29.90–29.91 Leasehold Reform Act 1967, s 19, and, 28.23–28.25

Index Positive covenants – contd LG(MP)A 1982, s 33, and, 28.17 local Acts, 28.26–28.28 local land charges, 28.29 long lease followed by enlargement benefit of the covenants, 29.103–29.104 burden of the covenants, 29.102 land registration, 29.107 LPA 1925, s 153, 29.100–29.101 practical application, 29.105–29.106 rule in Spencer’s case, 29.98–29.99 LPA 1925, s 56(1), and, 26.4–26.7 LPA 1925, s 79, and, 28.9–28.12 meaning, 25.2–25.4 Mission and Pastoral Measure, and, 28.19–28.20 original covenantees building scheme, under, 26.8 categories, 26.3–26.8 introduction , 26.1–26.2 LPA 1925, s 56(1), under, 26.4–26.7 named as party, 26.3 RPA 1845, s 5, under, 26.4–26.7 performance by indirect methods, 29.1–29.120 persons entitled to claim benefit original covenantees, 26.1–26.8 subsequent owners and occupiers, 27.1–27.41 planning obligations, 28.22 private Acts, 28.26–28.28 property rights conditions examples, 29.73–29.83 general principle, 29.72 running of the benefit, 29.88 running of the burden, 29.84–29.87 Real Property Act 1845, s 5, and, 26.4–26.7 relief from forfeiture equitable right of re-entry, 29.31–29.34 legal right of re-entry annexed to rentcharge, 29.24–29.30 non-payment of rent, 29.24–29.26 non-rent related covenants, 29.27–29.30 remedies for breach appointment of receiver, 30.39–30.41 common law damages, 30.29–30.38 damages, 30.14–30.25 injunctions, 30.26–30.28 introduction, 30.1–30.2 specific performance, 30.3–30.13 rentcharges extinguishment, and, 29.71 generally, 29.68–29.70 redemption, and, 29.71

Positive covenants – contd rentcharges – contd relief from forfeiture, 29.24–29.30 right of entry, and, 29.66 right of re-entry, and, 29.5–29.43 use, 29.68–29.71 right of entry equitable rights, 29.64–29.65 legal rights, 29.64 nature, 29.59–29.61 perpetuity rule, 29.62–29.63 practical use, 29.67 rentcharge, 29.66 running of the benefit, 29.66 running of the burden, 29.64–29.65 right of re-entry breach of condition as to rentcharge, 29.45–29.51 capital sums, 29.55–29.58 common law, at, 29.4 court order, 29.19 effect, 29.20–29.23 enforceability, 29.12–29.14 equitable rights, 29.5–29.11 exercise, 29.18–29.19 introduction, 29.3 legal rights, 29.5–29.11 legislation of 1925, and, 29.5–29.11 limitation period, 29.40–29.43 monetary obligations, 29.55–29.58 non-payment of rent, 29.24–29.26 order of court, 29.19 overage clauses, 29.56–29.58 peaceable re-entry, 29.18 perpetuity rule, 29.36–29.39 practical use, 29.44–29.54 procedure when event occurs allowing exercise, 29.15–29.17 relief from forfeiture, 29.24–29.34 successors, against, 29.12–29.14 third parties, and, 29.35 rights of third parties, 27.35 rule in Austerberry v Oldham Corp, 28.4–28.8 schemes of management, 28.23–28.25 section 106 obligations, 28.22, 32.2 specific performance damages, and, 30.14–30.25 discretion of court, 30.6–30.10 enforcement, 30.12–30.13 jurisdiction, 30.3 power of court, 30.4–30.5 urgent cases, 30.11 subsequent owners and occupiers common law rules, 27.3–27.24 effect of satisfying rules, 27.25–27.26 entry into covenant with owner of legal estate, 27.12–27.13

953

Index Positive covenants – contd subsequent owners and occupiers – contd intention that benefit shall run with the land, 27.20–27.24 introduction, 27.1–27.2 modification of rules by equity and statute, 27.27–27.38 performance must have distinct connection with land, 27.4–27.6 person seeking to enforce must have legal estate, 27.14–27.19 relation to clearly identifiable land, 27.7–27.11 ‘touch and concern’ test, 27.4–27.6 TCPA 1990, s 106, and, 28.22 ‘touch and concern’ test, 27.4–27.6 transmissibility benefit only, of, 27.40–27.41 common law rules, 27.1–27.38 generally, 25.8–25.9 rights of successors and third parties, 27.3–27.41 use, 25.10 ‘walkway’ agreements, 28.16 wildlife management agreements, 28.18 Possessory title burden of covenants, 9.66 Private Acts burden of positive covenants, 28.26–28.28 Private dwelling house See also Dwelling houses meaning, 11.241 Private occupation meaning, 11.242 Prohibitory injunctions claimant with equitable rights, 13.48–13.53 claimant with legal rights basis of underlying principle, 13.36–13.37 generally, 13.31–13.39 relevant factors, 13.38–13.39 Public bodies See also Local authorities acquisition of land burdened by covenants altering statutory purposes for which land acquired, 10.61–10.64 compensation for injurious affection, 10.75–10.91 compulsory acquisition, 10.31–10.60 effect of covenant of protected noncompliance, 10.92–10.94 extension of immunity to individuals and bodies, 10.65–10.74 altering statutory purposes for which land acquired, 10.61–10.64

954

Public bodies – contd benefit of covenants deemed ownership of benefited land, 10.7–10.14 enforcement without use of deeming provisions, 10.15–10.22 introduction, 10.3–10.5 building or maintenance work, 10.68–10.74 burden of covenants registrable as local land charges failure to register, 10.27–10.30 generally, 10.23–10.26 Church of England land, 10.11–10.12 compensation for injurious affection assumptions to be made in assessment, 10.84–10.85 date of accrual of right to claim, 10.87 general right, 10.75 limitation period, 10.89–10.91 measure, 10.78–10.85 relevant date for assessment, 10.88 subject matter, 10.76–10.77 competent claimants, as deemed ownership of benefited land, 10.7–10.14 enforcement without use of deeming provisions, 10.15–10.22 introduction, 10.3–10.5 compulsory acquisition continued existence of covenants, 10.35–10.39 effect on covenants of burdened land, 10.34–10.60 extent of permitted non-compliance, 10.40–10.60 generally, 10.31–10.32 holding powers to deal with land, 10.33 covenant imposed and operated within scheme under which it is imposed, 10.22 covenantees, as deemed ownership of benefited land, 10.7–10.14 enforcement without use of deeming provisions, 10.15–10.22 introduction, 10.3–10.5 deemed ownership of benefited land Church of England land, 10.11–10.12 disposal of land held by local authority for housing purposes, 10.11 effects of provisions, 10.13–10.14 forestry dedication covenant, 10.11 National Trust, 10.11 planning matters, 10.7–10.10

Index Public bodies – contd disposal of land held by local authority for housing purposes, 10.11 effect on covenant of protected non-compliance, 10.92–10.94 enforcement without use of deeming provisions covenant imposed and operated within scheme under which it is imposed, 10.22 generally, 10.15–10.18 housing disposed of by local authority, 10.17 Local Acts, 10.19–10.21 management agreements, 10.17 planning obligations, 10.18 ‘walkway’ agreements, 10.17 extension of immunity to individuals and bodies building or maintenance work, 10.68–10.74 lessees of statutory body, 10.67 licensees, 10.67 original covenantors, 10.65–10.66 failure to register covenants as local land charges which have legal status, 10.30 which remain equitable, 10.27–10.29 forestry dedication covenant, 10.11 housing disposed of by local authority, 10.11, 10.17 introduction, 10.1–10.2 Local Acts, 10.19–10.21 Local Government Act 1972, s 111(1), and, 10.3 Local Government (Miscellaneous Provisions) Act 1982, s 33, and, 10.16 Localism Act 2011, s 1, and, 10.3 management agreements, 10.17 National Trust, 10.11 planning obligations, 10.2, 10.18 planning permission, 10.95–10.98 protected non-compliance, 10.92–10.94 s 106 TCPA 1990, and, 10.2 statutory powers to deal with land, 10.33 ‘touch and concern’ test, 10.5 use restrictions, 10.95–10.98 ‘walkway’ agreements, 10.17 Public house meaning, 11.243 Purchasers capacity to enter into covenants, 1.68 Qualified title burden of covenants, 9.67

Quia timet injunctions generally, 13.40 Real Property Act 1845, s 5 original covenantees, 3.3 Receivers appointment, 3.39–3.41 Rectification construction of covenants, and, 11.27–11.28 Reform past proposals, 33.2–33.4 Law Commission identification of problems, 33.9 Law Commission conclusions, 33.10 Law Commission recommendations, 33.11 prospects for, 33.12–33.13 Registered land burden of covenants absolute title, 9.41–9.65 introduction, 9.40 leasehold estates, 9.68 possessory title, 9.66 qualified title, 9.67 squatters, 9.70 Registration building schemes registered land, 8.121–8.126 unregistered land, 8.104–8.120 Release fiduciary owners, 15.11 form, 15.13–15.14 introduction, 15.1 land charges, 15.15–15.16 minors, 15.12 person under disability, 15.12 persons with power, 15.9–15.12 Relief from forfeiture equitable right of re-entry jurisdiction for grant, 29.31–29.32 principles applicable to exercise, 29.33–29.34 legal right of re-entry annexed to rentcharge non-payment of rent, 29.24–29.26 other covenants, 29.27–29.30 non-payment of rent conditions for grant, 29.26 generally, 29.24 timing of applications, 29.25 non-rent related covenants conditions for grant, 29.29–29.30 generally, 29.27–29.28 jurisdiction for grant, 29.29–29.30 Remedies for breach of positive covenant appointment of receiver, 30.39–30.41

955

Index Remedies for breach of positive covenant – contd damages addition to specific performance, in, 30.16–30.18 common law, at, 30.29–30.38 Lord Cairns’ Act, under, 30.15 specific performance, and, 30.14–30.25 substitution to specific performance, in, 30.19 damages at common law assessment of loss, 30.34–30.38 breach complained of, 30.31 date for ascertaining loss, 30.34–30.36 generally, 30.29–30.30 measure, 30.32–30.33 method of assessing loss, 30.37–30.38 damages in addition to specific performance generally, 30.16–30.18 introduction, 30.14 jurisdiction, 30.14 measure, 30.20–30.25 damages in substitution to specific performance generally, 30.19 introduction, 30.14 jurisdiction, 30.14 measure, 30.20–30.25 injunctions ancillary remedy, as, 30.27 introduction, 30.26–30.28 primary remedy, as, 30.28 introduction, 30.1–30.2 specific performance damages, and, 30.14–30.25 discretion of court, 30.6–30.10 enforcement, 30.12–30.13 jurisdiction, 30.3 power of court, 30.4–30.5 urgent cases, 30.11 types, 30.1 Remedies for breach of restrictive covenant acquiescence analogous to estoppel, 13.123–13.124 barring claimant’s right in entirety, 13.128–13.131 confining award to nominal damages, 13.128–13.131 effects, 13.127–13.146 meaning, 13.120 minor, by, 13.147 nature, 13.119–13.126

956

Remedies for breach of restrictive covenant – contd acquiescence – contd not such as to affect grant of injunction, 13.137–13.146 persuades court to grant damages in lieu of injunction, 13.132–13.136 predecessors in title, by, 13.148–13.151 anticipatory injunctions, 13.40 arbitration, 13.7 changes in character of neighbourhood, 13.167–13.171 claimants, 13.1 damages addition to injunction, in, 13.78–13.80 discretion of court, 13.77–13.99 introduction, 13.73 jurisdiction, 13.74–13.76 measure under Lord Cairns’ Act, 13.100–13.110 substitution for injunction, in, 13.81–13.99 damages at common law, 13.184–13.191 declarations that claimant entitled to enforce addition to injunction, in, 13.19–13.23 interim declarations, 13.16–13.18 jurisdiction, 13.9–13.15 statutory basis, 13.10 defences, 13.111–13.171 defendants, 13.1 delay analogous to estoppel, 13.123–13.124 barring claimant’s right in entirety, 13.128–13.131 confining award to nominal damages, 13.128–13.131 effects, 13.127–13.146 meaning, 13.120 minor, by, 13.147 nature, 13.119–13.126 not such as to affect grant of injunction, 13.137–13.146 persuades court to grant damages in lieu of injunction, 13.132–13.136 predecessors in title, by, 13.148–13.151 equitable acquiescence, 13.119–13.151 changes in character of neighbourhood, 13.167–13.171

Index Remedies for breach of restrictive covenant – contd equitable – contd estoppel, 13.152–13.156 inequitable conduct, 13.157–13.166 introduction, 13.111–13.112 laches, 13.119–13.146 limitation, 13.114–13.118 types, 13.113 estoppel, 13.152–13.156 expiry of limitation period, 13.111, 13.114–13.118 final injunctions anticipatory injunction, 13.40 claimant with equitable rights, 13.48–13.53 claimant with legal rights, 3.30–13.47 generally, 13.27–13.28 interim injunction, 13.47, 13.54–13.72 introduction, 13.26 mandatory injunction, 13.41–13.46, 13.48–13.53 prohibitory injunction, 13.31–13.39, 13.48–13.53 quia timet injunction, 13.40 general damages, 13.73–13.191 declaration, 13.9–13.23 injunctions, 13.24–13.72 introduction, 13.8–13.110 inequitable conduct acts of claimant causing change in character of area, 13.165–13.167 breach by claimant or someone through whom he claims, 13.159–13.162 claimant’s disregard of breaches by others, 13.163–13.164 generally, 13.157–13.158 injunctions aid of declarations, in, 13.19–13.23 damages, and, 13.73–13.110 equitable remedy, as, 13.111 final injunctions, 13.27–13.47 interim, 13.54–13.71 introduction, 13.24–13.26 jurisdiction, 13.24–13.25 types, 13.26 interim declarations, 13.16–13.18 interim injunctions American Cyanamid v Ethicon Ltd, 13.62–13.67 general considerations, 13.54–13.61 introduction, 13.47 mandatory form, in, 13.68–13.72 principles as to grant, 13.62–13.67

Remedies for breach of restrictive covenant – contd introduction, 13.1–13.2 laches analogous to estoppel, 13.123–13.124 barring claimant’s right in entirety, 13.128–13.131 confining award to nominal damages, 13.128–13.131 effects, 13.127–13.146 meaning, 13.120 minor, by, 13.147 nature, 13.119–13.126 not such as to affect grant of injunction, 13.137–13.146 persuades court to grant damages in lieu of injunction, 13.132–13.136 predecessors in title, by, 13.148–13.151 limitation period, 13.114–13.118 mandatory injunctions claimant with equitable rights, 13.48–13.53 claimant with legal rights, 13.41–13.46 non-compliance, and, 13.1 prohibitory injunctions (claimant with equitable rights), 13.48–13.53 prohibitory injunctions (claimant with legal rights) basis of underlying principle, 13.36–13.37 generally, 13.31–13.39 relevant factors, 13.38–13.39 quia timet injunctions, 13.40 reform of the law background, 33.1–33.7 Law Commission report, 33.8–33.11 prospects, 33.12–33.13 Law Commission report (2011) background, 33.1–33.7 conclusions, 33.10 introduction, 33.8 problems to be tackled, 33.9 recommendations, 33.11 right of entry, 13.3–13.4 right of re-entry, 13.5–13.6 stay of proceedings, 13.172–13.183 terms agreed between parties, and arbitration, 13.7 right of entry, 13.3–13.4 right of re-entry, 13.5–13.6 unconscionable conduct acts of claimant causing change in character of area, 13.165–13.167

957

Index Remedies for breach of restrictive covenant – contd unconscionable conduct – contd breach by claimant or someone through whom he claims, 13.159–13.162 claimant’s disregard of breaches by others, 13.163–13.164 generally, 13.157–13.158 Rentcharges restrictive covenants, 1.51 Rentcharges (positive covenants) extinguishment, and, 29.71 generally, 29.68–29.70 redemption, and, 29.71 relief from forfeiture, 29.24–29.30 right of entry, and, 29.66 right of re-entry, and breach of condition as to, 29.45–29.51 generally, 29.5–29.43 relief from forfeiture, 29.24–29.30 use, 29.68–29.71 Residential flats meaning, 11.244 Restrictive covenants annexation effect, 6.1–6.4 Federated Homes decision, 6.65–6.79 land to which annexation takes place, 6.45–6.89 negating pre-existing annexation, 6.90–6.93 post-1925 covenants, 6.27–6.44 pre-Federated Homes cases, 6.57–6.64 pre-1926 covenants, 6.6–6.26 qualifications, 6.4 requirements, 6.5–6.56 unilateral action of person entitled to its benefit, 6.94–6.106 assignability bankruptcy of person entitled to benefit, 7.45–7.46 common law, at, 7.20 Conveyancing Act 1881, s 6, 7.29–7.35 death of person entitled to benefit, 7.43–7.44 equity, in, 7.20 extent of benefit, 7.26–7.28 formal requirements, 7.20–7.28 introduction, 7.1–7.3 language, 7.24–7.25 LPA 1925, s 62(1), 7.29–7.35 LPA 1926, s 63, 7.36–7.40 notice, 7.23

958

Restrictive covenants – contd assignability – contd operation of law, by, 7.43–7.46 qualified annexation, and, 7.4–7.5 statute, under, 7.21–7.22 timing, 7.6–7.19 unbroken chain requirement, 7.42 benefit land of covenantee, must, 1.20–1.50 benefit of annexation, 6.1–6.106 assignment, 7.1–7.46 building schemes, 8.1–8.126 categories, 2.1–2.2 covenant beneficiaries, 4.1–4.7 original covenantees, 3.1–3.12 subsequent owners and occupiers of land, 5.1–5.3 breach of remedies, 13.1–13.191 building schemes evolution, 8.2–8.22 facts to be proved, 8.25–8.89 introduction, 8.1 legal effects, 8.23–8.24 negating factors, 8.90–8.103 registration of obligations, 8.104–8.126 burden of See Burden of restrictive covenants ceasing to be enforceable at or in equity, 15.2–15.8 claimants annexation, 6.1–6.106 assignment, 7.1–7.46 building schemes, 8.1–8.126 building schemes, 8.1–8.126 categories, 2.1–2.2 covenant beneficiaries, 4.1–4.7 original covenantees, 3.1–3.12 subsequent owners and occupiers of land, 5.2–5.4 competition law, and ‘anchor tenants’ , 12.11 Competition Act, 12.4–12.16 general, 12.1–12.3 Groceries Market Investigation Order, 12.17–12.26 UK law, 12.4–12.26 construction of certainty of terms, 11.31–11.37 commonly used words, 11.110–11.253 contra proferentem rule, 11.20–11.21 estoppels, 11.6 existence of covenant, 11.2–11.4 general approach, 11.7–11.19 general principles, 11.1–11.28

Index Restrictive covenants – contd construction of – contd implied covenants, 11.5 implied terms in covenants, 11.22–11.26 liability of original covenantor for acts of subsequent owners, 11.54–11.66 liability of present owner for acts or omissions of earlier owner, 11.67–11.80 persons within scope of benefit of covenant, 11.38–11.44 persons within scope of burden of covenant, 11.45–11.53 rectification, 11.27–11.28 references to covenantee or covenantor, 11.81–11.109 specific areas, 11.29 terms, 11.31–11.37 covenantee’s interest in land benefited, 1.51 discharge introduction, 15.1 LPA 1925, s 84(1), under, 16.1–16.139 release, by, 15.12 variation, by, 15.37 discharge or modification under LPA 1925, s 84(1) See Discharge or modification under LPA 1925, s 84(1) express release fiduciary owners, 15.11 form of release, 15.13–15.14 introduction, 15.1 land charges, 15.15–15.16 minors, 15.12 person under disability, 15.12 persons with power, 15.9–15.12 extinguishment intervening illegality, by, 15.26–15.27 intervening impossibility, by, 15.28–15.29 introduction, 15.1 statute, by, 15.30 types, 15.17 unity of seisin, by, 15.18–15.25 history of development, 1.3–1.8 meaning, 1.1 modification introduction, 15.1 LPA 1925, s 84(1), under, 16.1–16.139 release, by, 15.12 variation, by, 15.37 negative in substance, must be, 1.10

Restrictive covenants – contd public bodies And see Public bodies acquiring land burdened by covenants, 10.31–10.94 altering statutory purposes for which land acquired, 10.61–10.64 burden of covenants registrable as local land charges, 10.23–10.26 compensation for injurious affection, 10.75–10.91 compulsory acquisition, 10.31–10.60 covenantees, as, 10.3–10.30 effect of covenant of protected noncompliance, 10.92–10.94 extension of immunity to individuals and bodies, 10.65–10.74 failure to register covenants as local land charges, 10.27–10.30 introduction, 10.1–10.2 planning permission, 10.95–10.98 statutory powers to deal with land, 10.33 use restrictions, 10.95–10.98 remedies for breach And see Remedies acquiescence, 13.119–13.151 arbitration, 13.7 changes in character of neighbourhood, 13.167–13.171 damages, 13.73–13.111 damages at common law, 13.184–13.191 declaration, 13.9–13.23 defences, 13.111–13.171 estoppels, 13.152–13.156 general, 13.8–13.110 inequitable conduct, 13.157–13.166 injunctions, 13.24–13.53 interim injunctions, 13.54–13.72 introduction, 13.1–13.2 laches, 13.119–13.146 limitation period, 13.114–13.118 right of entry, 13.3–13.4 right of re-entry, 13.5–13.6 stay of proceedings, 13.172–13.183 terms agreed between parties, and, 13.3–13.7 unconscionable conduct, 13.157–13.166 requirements, in order to be, 1.9 restrictive of user of land, must be, 1.11-1.18 ‘spent’, 2.1 termination ceasing to be enforceable at or in equity, 15.2–15.8 express release, 15.9–15.16

959

Index Restrictive covenants – contd termination – contd extinguishment by operation of law, 15.17–15.30 introduction, 15.1 methods, 15.1 release, 15.9–15.16 variation, 15.31–15.42 transmissibility ‘benefit land in which claimant has sufficient interest’, 1.52–1.55 current rules, 1.9–1.72 ‘entered into by competent covenantor’, 1.62 ‘entered into for benefit of land belonging to covenantee’, 1.19–1.51 historical development, 1.3–1.8 introduction, 1.1–1.2 ‘negative in substance’, 1.10 ‘not intended to be personal to original covenantee’, 1.56–1.61 ‘restrictive of user of land’, 1.11–1.18 Tulk v Moxhay rule, 1.3 variation under Housing Act 1985, s 610 compensation, 15.36 differences in use from Upper Tribunal’s power, 15.37–15.42 general power, 15.31–15.32 matters to be taken into account, 15.33–15.35 Retail outlets competition law, 12.6 Reversioners transmissibility, 1.51 Right of entry positive contracts equitable rights, 29.64–29.65 legal rights, 29.64 nature, 29.59–29.61 perpetuity rule, 29.62–29.63 practical use, 29.67 rentcharge, 29.66 running of the benefit, 29.66 running of the burden, 29.64–29.65 restrictive contracts, 13.3–13.4 Right of re-entry See also Right of re-entry (positive contracts) restrictive contracts, 13.5–13.6 Right of re-entry (positive contracts) breach of condition as to rentcharge, 29.45–29.51 capital sums, 29.55–29.58 common law, at, 29.4 court order, 29.19

960

Right of re-entry (positive contracts) – contd effect registered land, 29.22–29.23 unregistered land, 29.20–29.21 enforceability registered land, 29.14 unregistered land, 29.12–29.13 equitable rights generally, 29.5–29.11 practical use, 29.52–29.54 relief from forfeiture, 29.31–29.34 exercise order of court, 29.19 peaceable re-entry, 29.18 introduction, 29.3 legal rights assigning benefit, 29.50–29.51 generally, 29.5–29.11 non-payment of rent, 29.24–29.26 non-rent related covenants, 29.27–29.30 practical use, 29.45–29.51 relief from forfeiture, 29.24–29.30 legislation of 1925, and, 29.5–29.11 limitation period, 29.40–29.43 monetary obligations, 29.55–29.58 non-payment of rent conditions for grant, 29.26 generally, 29.24 timing of applications, 29.25 non-rent related covenants conditions for grant, 29.29–29.30 generally, 29.27–29.28 jurisdiction for grant, 29.29–29.30 order of court, 29.19 overage clauses, 29.56–29.58 peaceable re-entry, 29.18 perpetuity rule instruments taking effect before 6 April 2010, 29.36–29.38 instruments taking effect on or after 6 April 2010, 29.39 practical use breach of condition as to rentcharge, 29.45–29.51 equitable right, 29.52–29.54 introduction, 29.44 legal right, 29.45–29.51 procedure when event occurs allowing exercise, 29.15–29.17 relief from forfeiture equitable right of re-entry, 29.31–29.34 legal right of re-entry annexed to rentcharge, 29.24–29.30 non-payment of rent, 29.24–29.26 non-rent related covenants, 29.27–29.30

Index Right of re-entry (positive contracts) – contd rentcharges breach of condition as to, 29.45–29.51 generally, 29.5–29.43 relief from forfeiture, 29.24–29.30 successors, against, 29.12–29.14 third parties, and, 29.35 Rule in Austerberry v Oldham Corp burden of positive covenants, 28.4–28.8 Schemes of management burden of positive covenants, 28.23–28.25 School meaning, 11.245 specific covenants, 11.246 Section 106 obligations See Planning obligations Single-storey dwelling meaning, 11.247 Specific performance damages in addition to generally, 30.16–30.18 introduction, 30.14 jurisdiction, 30.14 measure, 30.20–30.25 damages in substitution of generally, 30.19 introduction, 30.14 jurisdiction, 30.14 measure, 30.20–30.25 discretion of court, 30.6–30.10 enforcement, 30.12–30.13 injunction, 30.11 jurisdiction, 30.3 power of court, 30.4–30.5 urgent cases, 30.11 Spencer’s Case theory restrictive covenants, as to, 1.5 Squatters burden of covenants registered land, 9.70 unregistered land, 9.69 transmissibility of covenants, 1.51 Statutory corporations capacity, 1.66–1.67 Stay of proceedings action for breach of covenant, 13.172–13.183 court proceedings, pending application to Tribunal, 13.172–13.183 Tribunal proceedings, for alternative dispute resolution, 24.44–24.45 Structure meaning, 11.248

Subsequent owners and occupiers See also Benefit of positive covenants; Benefit of restrictive covenants common law rules, 27.3–27.24 effect of satisfying rules, 27.25–27.26 entry into covenant with owner of legal estate, 27.12–27.13 intention that benefit shall run with the land, 27.20–27.24 introduction, 27.1–27.2 modification of rules by equity and statute, 27.27–27.38 performance must have distinct connection with land, 27.4–27.6 person seeking to enforce must have legal estate, 27.14–27.19 relation to clearly identifiable land, 27.7–27.11 right of re-entry, 29.12–29.14 ‘touch and concern’ test, 27.4–27.6 Successors See Subsequent owners and occupiers Suffer meaning, 11.240 Tavern meaning, 11.249 Temporary building meaning, 11.150–11.154 Tenants at will capacity to enter into covenant, 1.51 ‘Thin end of the wedge’ argument discharge under LPA 1925, s 84(1), 16.102–16.108 Third parties right of re-entry, 29.35 Third party rights under statute positive covenants, 27.39 restrictive covenants generally, 3.9–3.11 remedies, 3.12 Title Absolute See Absolute Title ‘Touching and concerning’ positive covenants, 27.4–27.6 restrictive covenants generally, 1.24–1.34, 6.45 public bodies, 10.5 Trade meaning, 11.250 Transmissibility (positive covenants) See also Benefit of positive covenants; Subsequent owners and occupiers subsequent owners and occupiers common law rules, 27.3–27.24 effect of satisfying rules, 27.25–27.26

961

Index Transmissibility (positive covenants) – contd subsequent owners and occupiers – contd entry into covenant with owner of legal estate, 27.12–27.13 intention that benefit shall run with the land, 27.20–27.24 introduction, 27.1–27.2 modification of rules by equity and statute, 27.27–27.38 performance must have distinct connection with land, 27.4–27.6 person seeking to enforce must have legal estate, 27.14–27.19 relation to clearly identifiable land, 27.7–27.11 ‘touch and concern’ test, 27.4–27.6 rights of successors and third parties, 27.3 Transmissibility (restrictive covenants) See also Benefit of restrictive covenants; Subsequent owners and occupiers adverse possession, 1.51 ‘affects the value’, 1.26 beneficial owners, 1.63 benefit land belonging to covenantee ‘affects the value’, 1.26 amenity value, 1.27 burden of proof, 1.35–1.50 control value, 1.27–1.28 introduction, 1.20–1.23 monetary value, 1.27 moral obligation to enforce covenants for benefit of others, 1.31–1.34 ‘touching and concerning’ test, 1.24–1.30 ‘benefit land in which claimant has a sufficient interest at time of enforcement’, 1.52–1.55 ‘competent covenantors’ beneficial owners, 1.63 companies, 1.65 fiduciary owners, 1.64 introduction, 1.62 local authorities, 1.66 statutory corporations, 1.66–1.67 conscience theory, 1.6 contracting purchaser, 1.69–1.71 contracting vendor, 1.51 current rules, 1.9–1.72 ‘entered into by competent covenantor’ beneficial owners, 1.63 companies, 1.65 ‘competent covenantors’, 1.63–1.67 contracting purchaser, 1.69–1.71 fiduciary owners, 1.64

962

Transmissibility (restrictive covenants) – contd ‘entered into by competent covenantor’ – contd introduction, 1.62 local authorities, 1.66 no interest in or occupation of part of the intended subjective land, 1.72 statutory corporations, 1.66–1.67 sufficient interest in the subjected land, 1.68 ‘entered into for benefit of land belonging to covenantee’ adverse possession, 1.51 ‘affects the value’, 1.26 amenity value, 1.27 benefit land belonging to covenantee, 1.20–1.50 burden of proof, 1.35–1.50 contracting vendor, 1.51 control value, 1.27–1.28 estate or interest in benefited land which covenantee must own, 1.51 fee simple estate, 1.51 introduction, 1.19 licensees, 1.51 monetary value, 1.27 moral obligation to enforce covenants for benefit of others, 1.31–1.34 mortgagees, 1.51 non-proprietary occupiers, 1.51 rentcharge owners, 1.51 reversioner, 1.51 squatters, 1.51 tenants at will, 1.51 ‘touching and concerning’ test, 1.24–1.30 estate or interest in benefited land which covenantee must own adverse possession, 1.51 contracting vendor, 1.51 fee simple estate, 1.51 licensees, 1.51 mortgagees, 1.51 non-proprietary occupiers, 1.51 rentcharge owners, 1.51 reversioner, 1.51 squatters, 1.51 tenants at will, 1.51 fee simple estate, 1.51 fiduciary owners, 1.64 historical development conscience theory, 1.6 generally, 1.3–1.4 negative easements theory, 1.7–1.8 Spencer’s Case theory, 1.5

Index Transmissibility (restrictive covenants) – contd introduction, 1.1–1.2 licensees, 1.51 local authorities, 1.66 mortgagees, 1.51 negative easements theory, 1.7–1.8 ‘negative in substance’, 1.10 no interest in or occupation of part of the intended subjective land, 1.72 non-proprietary occupiers, 1.51 ‘not intended to be personal to original covenantee’ covenants entered into after 1881 and before 1926, 1.58 introduction, 1.56 post-1925 covenants, 1.59–1.61 pre-1882 covenants, 1.57 rentcharge owners, 1.51 ‘restrictive of user of land’, 1.11–1.18 reversioner, 1.51 Spencer’s Case theory, 1.5 squatters, 1.51 statutory corporations, 1.66–1.67 sufficient interest in the subjected land, 1.68 tenants at will, 1.5 ‘touching and concerning’ test, 1.24–1.30 Tulk v Moxhay rule, 1.3 Trusts covenant beneficiaries, 4.1–4.7 determining identity of party to action to enforce covenant, 4.7 benefit of covenants, of, 4.1 land held by trustees, 1.51 relationship between trusts of covenants and building schemes, 4.2–4.6 Tulk v Moxhay development of rules of transmissibility, 1.3 facts, 1.10 Unconscionable conduct acts of claimant causing change in character of area, 13.165–13.167 breach by claimant or someone through whom he claims, 13.159–13.162 claimant’s disregard of breaches by others, 13.163–13.164 generally, 13.157–13.158 Unenforceable restrictive covenants clearing the title, 15.6–15.8 declaration proceedings, 14.1–14.33 insurance against enforcement, 14.3 Unity of seisin extinguishment of covenants, and, 15.18–15.25, 15.25A

Unregistered land burden of covenants introduction, 9.4 post-1925 covenants, 9.25–9.39 pre-1926 covenants, 9.5–9.24 squatters, 9.69 post-1925 covenants effect of registration, 9.27–9.39 introduction, 9.25 lessees, and, 9.28–9.30 notice, 9.26–9.39 right in rem, 9.31–9.34 pre-1926 covenants bona fide purchaser, 9.12 burden entirely ceases to run, 9.7 burden partially ceases to run, 9.8–9.9 consideration, 9.13 introduction, 9.5–9.6 legal estate, 9.14 lessees, and, 9.22–9.24 requirements, 9.10–9.24 underlessees, and, 9.22–9.24 valuable consideration, 9.13 without notice, 9.15–9.24 squatters, 9.69 Upper Tribunal proceedings for discharge or modification under LPA 1925, s 84(1) See also Discharge or modification under LPA 1925, s 84(1) adjournment of hearing, 24.93 admissible evidence, 16.134 admission of objectors, 24.33–24.37 ancillary discretion, 16.135–16.139 appeals Court of Appeal, to, 24.118 decisions, 24.115–24.116 general right, 24.107–24.109 ‘leapfrog’, 24.117 permission, 24.110–24.113 Supreme Court, to, 24.117 applications accompanying documents, 24.10 admission of objectors, 24.33–24.37 determination without hearing, 24.26–24.32 form and contents, 24.9 no response, 24.26–24.32 notice of, 24.11–24.16 objections, 24.19–24.25 applicant is the original covenantor, 16.92–16.100 attending hearing, failure to, 24.94–24.97 case management introduction, 24.49 powers, 24.56–24.57

963

Index Upper Tribunal proceedings for discharge or modification under LPA 1925, s 84(1) – contd case management – contd simplified procedure, 24.52–24.53 special procedure, 24.54 standard procedure, 24.50–24.51 written representation procedure, 24.55 competent applicants, 24.6–24.7 computer-based valuations, 24.75 concurrent court powers, 16.51–16.55 conduct of hearings, 24.98–24.99 consent orders, 24.88–24.89 constitution of Tribunal, 24.90 costs basis of assessment, 24.125–24.126 Calderbank offers, 24.139 challenge to objector’s entitlement to object, 24.128 conduct of parties, 24.123–24.124 criteria, 24.123–24.124 detailed assessment, 24.127 exercise of discretion, 24.122–24.127 general principles, 24.123–24.127 guidance, 24.128–24.145 offers to settle, 24.139–24.144 powers of Tribunal, 24.119–24.121 preliminary hearings, 24.130–24.132 sealed offers, 24.139–24.144 simplified procedure, 24.122 submissions, 24.145 success of applicant in substantive proceedings, 24.133–24.135 summary assessment, 24.127 unreasonable behaviour, 24.136–24.138 withdrawal of applicant, 24.129 written procedure, 24.122 court powers, concurrent, 16.51–16.55 decisions generally, 24.100–24.104 setting aside, 24.105–24.106 delivery of documents, 24.4–24.5 determination of preliminary issue, 24.46–24.48 directions failure to comply, 24.62–24.69 generally, 24.58–24.61 discretion of Tribunal generally, 16.56–16.139 not to be exercised unmindful of a factor, 16.133 discussions between experts, 24.77–24.78 discretionary nature, 16.56–16.58 evidence experts, 24.70–24.83

964

Upper Tribunal proceedings for discharge or modification under LPA 1925, s 84(1) – contd evidence – contd generally, 24.84–24.85 requirement, 16.134 exercise of discretion, 16.59–16.139 expert evidence computer-based valuations, 24.75 content of reports, 24.73–24.74 discussions between experts, 24.77–24.78 duties of expert, 24.71–24.72 generally, 24.70–24.83 introduction, 24.70 questions to experts, 24.76 reliance by another party, 24.79 reports, 24.73–24.74 single joint expert, 24.80–24.83 failure to attend, 24.94–24.97 failure to comply with directions all parties, 24.62–24.63 applicants, 24.64–24.67 objectors, 24.68–24.69 ‘grounds’ giving rising to application, 18.1–18.5 hearings adjournments, 24.93 conduct, 24.98–24.99 constitution of Tribunal, 24.90 evidence, 24.70–24.85 failure to attend, 24.94–24.97 location, 24.91 procedure at, 24.98–24.99 public, in, 24.92 irrelevant factors in exercise of discretion, 16.118 jurisdiction, 16.1–16.2 lack of definite plans of proposed development in evidence’, 16.110–16.111 ‘leapfrog’ appeals, 24.117 notice of application, 24.11–24.16 objectors, admission of, 24.33–24.37 compensation claim, 24.24 entitlement to benefit of restriction, 24.20–24.21 grounds, 24.22–24.23 notice, 24.19 other interested parties, 24.24 timing, 24.17–24.18 permission to appeal, 24.110–24.113 place of hearing, 24.91 post-hearing action registered land, 24.147–24.150 unregistered land, 24.146

Index Upper Tribunal proceedings for discharge or modification under LPA 1925, s 84(1) – contd powers of Tribunal See ‘Discharge or modification under LPA 1925, s 84(1)’ generally, 16.56–16.139 practice directions, 24.1–24.2 procedural applications, 24.58–24.61 procedure adjournments, 24.93 admission of objectors, 24.33–24.37 appeals, 24.107–24.118 application, 24.9–24.10 case management, 24.49–24.57 competent applicants, 24.6–24.7 computer-based valuations, 24.75 conduct of hearings, 24.98–24.99 consent orders, 24.88–24.89 constitution of Tribunal, 24.90 costs, 24.119–24.145 decisions, 24.100–24.104 delivery of documents, 24.4–24.5 determination of preliminary issue, 24.46–24.48 directions, 24.58–24.61 discussions between experts, 24.77–24.78 evidence, 24.84–24.85 expert evidence, 24.70–24.83 failure to attend, 24.94–24.97 failure to comply with directions, 24.62–24.69 hearings, 24.90–24.99 ‘leapfrog’ appeals, 24.117 notice of application, 24.11–24.16 objection, 24.17–24.32 overriding objective, 24.3 permission to appeal, 24.110–24.113 place of hearing, 24.91 post-hearing action, 24.146–24.150 practice directions, 24.1–24.2 procedural applications, 24.58–24.61 public hearing, 24.92 publicity, 16.7, 24.11–24.16 questions to experts, 24.76 registrar’s powers, 24.5, 24.13, 24.50, 24.57, 24.61, 24.76, 24.121, 24.127 representatives, 24.38–24.39 reviews, 24.114–24.116 Rules, 24.1–24.2

Upper Tribunal proceedings for discharge or modification under LPA 1925, s 84(1) – contd procedure – contd service, 24.4–24.5 setting aside decisions, 24.105–24.106 simplified procedure, 24.52–24.53 single joint expert, 24.80–24.83 special procedure, 24.54 standard procedure, 24.50–24.51 statements of case, 24.40–24.43 stay of proceedings for ADR, 24.44–24.45 summons to give evidence, 24.85 withdrawal of case, 24.86–24.87 witness statements, 24.84 written representation procedure, 24.55 public hearing, 24.92 publicity, 16.7, 24.11–24.16 registrar’s powers, 24.5, 24.13, 24.50, 24.57, 24.61, 24.76, 24.121, 24.127 relevant factors in exercise of discretion, 16.71–16.117 reviews, 24.114–24.116 Rules, 24.1–24.2 Scope of powers, 17.1–17.31 setting aside decisions, 24.105–24.106 variation under Housing Act 1985, s 610, compared with, 15.37–15.42 Variation under Housing Act 1985, s 610 compensation, 15.36 differences in use from Upper Tribunal’s power, 15.37–15.42 general power, 15.31–15.32 matters to be taken into account, 15.33–15.35 Victualler meaning, 11.251–11.252 Vintner meaning, 11.253 ‘Walkway’ agreements burden of positive covenants, 28.16 enforcement without use of deeming provisions, 10.17 Wildlife management agreements burden of positive covenants, 28.18

965

966