Covenants PDF

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COVENANTS...

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Covenants  Explain covenant [positive and restrictive], covenantor, convenantee and the original covenant and examples  What is the position under contract law? Words of the contract must be clear o Contract law? Words of the contract must be clear (Dano v Earl Cadogan [2003] words interrupted were ‘working class’ as this changed from time to time)  S56 (1) of LPA 1925 states that a party can gain advantage of a covenant even if they are not a party of the covenant. o Re Ecclesiastical Commissioner of England conveyance [1935] which said that a party which gets the benefits of the land should be regarded as the covenantee even though they may not be one of the parties. Emphasis here on the wording of the covenant o Re Foster [1938] the third party must show that the covenant purported him. o Amspop Trading Ltd v Harris Distribution Ltd [1997]- case confined to its own facts states that A could not enforce the covenants. Someone who was not a party to a contract could take advantage of it under s.56 only where it had been made for his benefit and a third party could not rely on the provision unless the covenant actually purported to be made with him. Therefore the person taking advantage of the covenant under s56 of the LPA must be clearly identifiable through the deed and must be present at the time of the covenant.  Benefit of the negative covenant at common law o touches and concerns:  under common law the covenantee must own the land which gains the benefits of the covenant  this rules distinguishes between a personal covenant and a land covenant  P and A swift investment v Combined English stores group – a covenant touches and concers if;  The benefits ceases if the covenantee is separated from the benefited land  If the covenant affects the nature, quality, mode of use or value of benefited land  If the covenant is not a personal covenant o original parties intended the covenant to run with the land  S 78 of LPA 1925 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.

o covenantee owned the legal (not equitable) estate in the benefitting land when the covenant was made  Webb v Russell (1789) o person enforcing the covenant has the same legal estate as the covenantee  Smith v River Douglas [1949]  Burden of the covenant at common law the burden will not run o The courts will not enforce the burden upon anyone who has not covenanted  Austerberry v Corporation of Oldham (1885)  Rhone v Stephens [1994]  In equity the benefit will run: o The covenant touches and concerns o The benefit has been transferred by either:  Annexation  Expressly annexed  assignment  Building scheme  In equity the burden becomes equitable interest if the rules of tulks v moxhay are satisfied: o the covenant must be negative in nature  Austerberry v Corporation of Oldham (1885)  Rhone v Stephens [1994] o the covenantee must have retained the land at the date of the covenant  London County Council v Allen- here the land was convenanted on by the builder, Covenantor, not to build on a particular piece of land. The covenantee was the council and Mrs Allen after buying the land with the knowledge of the covenant decided to build on it and when brought to court, the court allowed her not to be bound by the covenant as the land was only possessed by the council not owned.  Re Gadd’s Land Transfer (1966) – retention of a road was sufficient to enable enforcement.  exceptions:  building schemes  statutory exceptions favouring the authorities  lease held covenant o the covenant must touch and concern the dominant land  same to touch and concern under o Both of the original parties must intend that the covenant shall run with the covenantor’s land.  expressly stated  S79 of LPA

Morrells of Oxford Ltd v Oxford United Football Club [2001]unless the court can prove that the intention for the burden to run is expressly excluded. Where the burden runs in equity, the benefit must be made to run in equity o Expressed annexation  for the benefit land named” Roger v Hosegood o Implied annexation  Marten v Flight Refueling Ltd [1962] o Statutory annexed  Federated Homes v Mill Lodge Properties (1980 CA)  Accepted in Roake v Chadha (1984) o Assignment  Re Pinewood estates o Building Schemes  Building Scheme requirements: (Elliston v Reacher (1908))  Claimant and defendant must have derived title from common vendor  Common vendor laid out the estate in plots  Extent of the scheme is clearly defined  Common vendor intended the restrictions to be for the benefit of all plots sold  Plots were purchased on the basis that the restrictions were mutually enforceable  If there is a building scheme:  Each of the plot owners can enforce restrictive covenants against all / any of the other plot owners  If there is no building scheme:  Covenant enforcement will be dependent on the usual rules for transmission of the benefit and burden of the covenants if Tulks v Moxhay is satisfied then burdens equitable interest, will it bind the successor?: o Registered land: only if it is protected by entry of a Notice on the Title Register of the burdened land o Unregistered land post-1925: only if registered as a Class D(ii) Land Charge o Unregistered land pre-1925: doctrine of notice applies; BFPFVWN takes free Importance of equity o Claim in equity only gives equitable remedies (injunction, specific performance) o However, since 1858, the Court can award damages in lieu Positive covenants  Chain of indemnity 

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Halsall v Brizel [1957] - an agreement to contribute to the cost of maintaining repairs was binding on a subsequent owner, on the principle that you cannot take the benefit of these rights yet avoid the burdens of them.  S56 LPA v (Rights of Third Parties Act 1999) o To use S 56 LPA 1925(Extends the definition of “original covenantee”), the covenant must purport to be made with the person claiming the benefit o Contracts (RoTP) Act 1999 (Expands the group of people able to enforce the benefit of a contract) can be used if the covenant purports to confer a benefit on the person claiming the benefit ...