Covenants enforcement table PDF

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Summary

Enforcement of Covenants Who is trying to enforce the covenant against who? Original covenantee v original covenantor Successor in title to original covenantee v original covenantor Original covenantee v successor in title to original covenantor Successor in title to original covenantee v successor ...

Description

Enforcement of Covenants Who is trying to enforce the covenant against who? Original covenantee v original covenantor

Successor in title to original covenantee v original covenantor

Original covenantee v successor in title to original covenantor

Successor in title to original covenantee v successor in title to original covenantor

enforceable? enforceable?

enforceable?

enforceable?

Are we trying to determine if the burden and/or benefit ran with the land? Is the benefit/burden enforceable in law or in equity? Original parties to covenant have a contract → covenant enforceable due to privity of contract

Enforcing the benefit of the covenant at law ie did the benefit run with the land at law? Note: this test applies provided covenantee and their successor in title both had a legal interest. If covenantee/ successor in title have an equitable interest and successor in title is trying to enforce → apply test for whether benefit ran with the land in equity (fourth column)

Enforcing the burden of the covenant in equity ie did the burden run with the land in equity?

1.

2.

Enforcement of the burden in equity against successor in title to original covenantor (see test in third column – only restrictive covenants enforceable) ie did the burden run with the land in equity? AND Enforcement of the benefit in equity by successor in title to original covenantee (see test below in this column) ie did the benefit run with the land in equity?

What test is applicable to determine if the burden and/or benefit is enforceable ie runs with the land?

Note: as a general rule the burden of a covenant cannot be enforced at law. This scenario is not covered in this flow chart. The limited exception/ways to circumvent the rule are discussed in the lecture/text.

Prepared by: Sarah Wright School of Law, UOW Version: May 2019 Reference: Janice Gray et al, Property Law in New South Wales (LexisNexis, 4th ed, 2018)

At law – benefit of the covenant (positive or restrictive) will run with the land if it is ‘annexed’ to the land. This requires: 1. Intention to benefit land of covenantee (note: intention implied by CA s 70(1), unless contrary intention in instrument); 2. The covenant must ‘touch and concern’ the benefitted land ie benefits the land of covenantee ▪ ‘The covenant must affect the use or mode of occupation of the land, or must of itself affect the value of the land’ (Gray, 650, citing Rogers v Hosegood [1900] 2 Ch 388); and 3. Benefitted land identified/capable of being identified

Burden of a covenant is enforceable in equity against successor in title to original covenantor if (see Tulk v Moxhay ): 1. The covenant is restrictive (negative); 2. Successor in title of covenantor had notice of the covenant; 3. The covenant must ‘touch and concern’ the benefitted land ie benefits the land of covenantee; and 4. The parties intended the burden of the covenant to run with the land (note: intention implied by CA s 70(1), unless contrary intention in instrument) Note also that per CA s 88(1) instrument must clearly indicate: land burdened and benefitted by the covenant; and ‘persons (if any) having the right to release, vary or modify’ the restrictive covenant, or whose consent is required to do so.

Benefit will be enforceable in equity if annexed to the land, which requires: 1. Intention that the benefit of the covenant run with the land (CA s 70 – intention implied unless contrary intention indicated in covenant) 2. The covenant must ‘touch and concern’ the benefitted land ie benefits the land of covenantee 3. Land benefitted by the covenant is identified (per CA s88(1)); and 4. At the time of creation of the covenant, the covenantee owned the benefited land.

Note: consider also whether the formalities for creating a covenant were met. See further detail in lecture/text re tests above...