Land Law Coursework PDF

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Land Law Coursework
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Land Law

The case Rhone v Stephens [1994] 2 AC 310 highlighted the issue of whether the burden of positive covenant runs with freehold land. A comprehensive analysis of the case revealed a few key factors relating to the burden of a covenant. The question of whether the executrix of the house owner who was the first successor of the covenant could be sued by the claimant. According to the decision of the House of Lords this was not possible due to the fact that the burden of positive covenants could not be enforced directly at law on the successors. This study provided comprehensive analyses the facts of the case, the reasoning behind the decision made as well as the limitations and deficiencies that make the doctrine of benefit and burden seemingly unjust. To have a better understanding of the two primary covenants an in depth analysis is necessary. Examination of the court response and another case with the same details as Rhone v Srephens will assist in revealing the frailty of the doctrine. This will occur while illustrating a few reform proposals recently underlined by the Law Commission that highlight the need for reforms in the doctrine.

A property owner with an the adjoining cottage located within the same compound and roof decide to sell the cottage. Within the conveyance, the purveyor covenanted for himself and his successors indicated on the title of the deed as the owners of the house, to maintain the part of the house directly on top of the cottage in perfect condition, to the reasonable satisfaction to the purchasers along with their respective successors indicated on the deed. The house as well as the cottage was subsequently sold. The current proprietor of the said cottage was the plaintiff and

those that stood for the estate that held ownership of the house played the defendants. A lawsuit against the defendant was brought forth by the plaintiff on claims that the roof located right on top of the cottage had a leaking problem. The plaintiff claimed that the defendant breached the terms of their agreement when they failed to fix the issue. During the first lawsuit the court found the defendant who was the estate owner to be in breach of the terms of the conveyance. On appeal, this decision was promptly upturned. Consequently, the current proprietor appealed before the House of Lords whereby they vied against the ruling. They claimed that the positive covenant could not run with the freehold land as it had been reversed by the Property Act s. 79 of 1925.

The court held that after the case of Austerberry v Corporation of Oldham held in 1885 29 Ch.D. 750, the enforceable of a positive covenant in common law was not possible due to the fact that the successor highlighted in the title deed was not part of the contract covering the covenant1. The second reason for the dismissal was that the burden could not in a direct be enforced in common law. Granting, breach of the negative covenant that limited the land utilization or their exercise of any other rights relating to land use could indeed be punished or prevented in equity. Lastly, the law that stated positive covenants could not concide with the freehold was not influenced by the Property Act law of 1925 s. 79. It basically made it redundant to bring up the successors mentioned in the deed of the title in covenants outlined in the conveyance.

1 All Answers ltd, 'Rhone v Stephens 1994' (Lawteacher.net, April 2019) accessed 29 April 2019

However, despite the ruling, the court expressed that the doctrine of benefits and burden may indeed be unjust in certain situations. This was expecillay in the indirect method that the burden of positive freehold covenants was applied. The stringent Austerberry law, that made the enforcement of the doctrine revealed a few shortcoming as well as drawbacks. They expressed that the law commisson should introduce reforms that allowed situations whereby the positive covenants should be adept to bind the successors of the covenants initial owner named in the title of the deed. Furthermore, they court expressed that the doctrine was only there to divert the stringent rule of the Austerberry law. Nevertheless, they felt that administration should be through direct methods rather than indirect methods. Largely due to the fact that, indirect methods were limited and regularly volatile as seen in Rhone v Stephens which is potentially unreasonable.

A covenant is considered as a promise or provision in a deed to a piece of land. In a few cases land may be subject to a covenant that limits or affects its full use and this is referred to as the burden of a covenant of the law2. On the other hand a covenant can give the landowner some form of say over what is allowable on the neighboring property; this refers to the benefit of a covenant3. A covenant is quite important as it has the probability of upsetting the value of the land or its envisioned use. There are two variant types of covenants; there are the restrictive covenants and the positive covenants. Additionally, this distinction is quite significant as restrictive and positive covenants affect land in varying ways. A restrictive covenant prevents or

2 Ison Harrison. “Covenants On A Property Explained” (2016). < https://www.isonharrison.co.uk/blog/covenantson-a-property-explained> accessed 29th April 2019 3 Ison Harrison. “Covenants On A Property Explained” (2016). < https://www.isonharrison.co.uk/blog/covenantson-a-property-explained> accessed 29th April 2019

confines the land use in a specified manner to the benefit of other land. Covenants that are restrictive are said to run with the land4. Therefore, what this means is that the burden as well as benefit of the covenant relates only to the land itself and not to the landowners. This means that in case one of the original parties to the restrictive covenant decides to sell the property, the restrictive covenant would still remain enforceable. On the other hand, a positive freehold covenant requires some type of action to be committed for example, to erect a fence along the property boundary5. They are generally a contract made between the original parties or successors to the deed imposing the covenant. However, these types of covenants unfortunately do not bind any future land owners as re-affirmed continuously in Rhone v Stephens and famously in Austerberry v Corporation and in Keppell v Bailey6. Nevertheless, it’s important to note that the future successor of the land which has the benefit of a positive covenant has the ability to impose the covenant against the original landowner who has the burden of the covenant.

Positive freehold covenants have been a central place in the property law since the early nineteenth century and it continues to be part of it today. The most significant aspect of positive freehold covenants is how and in what conditions owners of the land as well as those acquiring the land are bound by the covenant. This is important due to the fact that whether the piece of land is burdened by a freehold covenant can have some momentous ramifications. The ramifications are not just for how the land will be put to use, but also for its economic value, its

4 Land Registry Documents. “All you Need to Know about Covenants” < https://www.land-registrydocuments.co.uk/news-blog/covenantswhat-you-need-to-know-about/> accessed 29th April 2019 5 Cash, Andrew. "Freehold Covenants and the Potential Flaws in the Law Commission's 2011 Reform Proposals." The Conveyancer and Property Lawyer 2017, no. 3 (2017): 212-222. 6 Keppell v Bailey (1834) 2 My. & K. 517, 39 E.R. 1042.

amenity and saleability. Perhaps predictably then, strict rules may have cropped up as to when the freehold covenant will or will not be binding under Welsh and English Law. In this law, there is one fascinating and rather unusual workaround to these frequently punitive rules called the doctrine of benefit and burden. The enforceability question as well as the doctrine of benefit of burden in particular forms the focus of this analysis. This is due to the fact that revisiting the origins and development of the doctrine, while scrutinizing its contemporary application will uncover a new viewpoint on the Law Commission’s current proposals for reforms to the law of covenants7. This would reveal the introduction of a completely new proprietary right referred to as the “Land Obligation8. In turn, this would then uncover the theoretical as well as historical insubstantiality of the doctrine of benefit and burden thus strengthening the case for reform as highlighted by the House of Lords. The doctrine of benefit and burden has dramatically evolved systematically through case law after case law and it has unquestionably been molded incrementally through development carried out throughout history. For a comprehensive understanding cannot be reached without analysing its origin, adoption as well as an initial application by the courts, an appreciation of the attribution and initial exposition of the doctrine is essential. In Austerberry v Corporation of Oldham the House of Lords affirmed that the burden of the positive freehold covenant could in no way run with the fee simple at common law9. Therefore, the owner of the land who has favoured a positive covenant of law will not be in a position to enforce the burden the covenant

7 Burns, Fiona R. "The Court of Chancery in the 19th Century: A Paradox of Decline and Expansion." U. Queensland LJ 21 (2000): 198. 8 Bevan, Chris. “THE DOCTRINE OF BENEFIT AND BURDEN: REFORMING THE LAW OF COVENANTS AND THE NUMERUS CLAUSUS “PROBLEM” (2018) < https://www.cambridge.org/core/journals/cambridge-lawjournal/article/doctrine-of-benefit-and-burden-reforming-the-law-of-covenants-and-the-numerus-claususproblem/A6A3D91A2D8879BEF11AD2F35B579FF4/core-reader> accessed 29th April 2019 9 Austerberry v Corporation of Oldham (1885) 29 Ch. D. 750; see also Haywood v The Brunswick Permanent Benefit Building Society (1885) 8 Q.B.D. 403.

directly against the successor of the initial covenantor. Since freehold contracts are contractual rights this means that unlike the restrictive covenant the privy of estate between the original covenant and successor of the original covenant does not exist. Therefore, the burden of the covenant can in no way be passed with the land. The stringent rule has been re-affirmed for more than a century and as seen in the case of Rhone v Stephens. The doctrine was first applied in Halsall v Brizell whereby land was sub dived and sold as small plots for development. Ownership of the roads, sea wall, sewers and the promenade was retained by the vendors, but the rights to use the facilities was granted to the purchasers. The buyers covenanted so as to make a contribution to the cost that would be necessary to maintain the facilities. Typically, the burden of these positive covenants would not pass to the buyer directly by law under the Austerberry rule. Nonetheless, the House of Lords held that the buyers were required to make a contribution to the maintenance cost of the facilities. By doing this the court, applied the ancient law of give-and-take benefits and burden whereby an individual could not reap the benefits under a deed without accepting the burdens and obligations as well. This doctrine was also applied in the case of Ives v High where the doctrine of burden was explicitly explained by Lord Denning M.R. That whoever takes the benefits must also be ready to receive the burdens. In essence the doctrine was also revisited in Rhone v Stephens whereby the line between the concept of pure principle of benefit and burden and the conditional benefit were discussed. Nevertheless, the court casts significant doubt over this argument as they were not willing to confirm pure principle that the party deriving benefits from a conveyance had to accept the burden from the conveyance as well. Furthermore, the court held that the doctrine was constrained by the strict law of the Austerberry rule10. This was due to the reasoning that any 10Phua, Casandra. "Is the Law Governing the Benefit and Burden of Freehold Covenants in Need of Reform." Exeter Student L. Rev. 2 (2016): 27.

burden could not be enforced by simply attaching a right; it had to be relevant to the particular exercise of right for it to be applicable11. And secondly, the doctrine would only operate in the case whereby the opportunity to renounce the benefit and thus escape the connecting burden was presented. In essence the judgement may appear as unjust in the case of Rhone v Stephens as the doctrine that is supposed to help circumvent the thoroughness of the common law was rejected. It simply reveals that there is a need for reforms because although the doctrine does help circumvent these stringent rules. They do not offer a permanent solution to solving the unfairness and unjustness of positive covenants that can sometimes reveal in such cases12. They simply treat the symptoms, but fail to diagnose the cause. The document is constrained and subjected to narrow pre-requisites like the requirement of a single transaction and the opportunity to reject the benefit also present a major flaw13. Since the doctrine can only be enacted in cases whereby the party has a choice to refuse to accept the benefits and thereby is exempt from the burden. This does not necessarily guarantee that it will amount to any tangible or real practical choice to accept or refuse the benefit14. It can only be guaranteed through conjectural, theoretical or mythical conceptions on if the party did indeed choose to receive the benefit or not in the subjective perception of the court. Therefore, making it necessary for the enforcement of such a covenant is reformed to apply through direct means rather than through indirect means. This will potentially ensure that the process is just and fair and applicable in the contemporary world.

11 Lobel, Orly. "Intellectual property and restrictive covenants." ENCYCLOPEDIA OF LABOR AND EMPLOYMENT LAW AND ECONOMICS, Dau-Schmidt, Harris & Lobel, eds., Edward Elgar Publishing (2009): 08-059. 12 Bevan, Chris. "The doctrine of benefit and burden: reforming the law of covenants and the numerus clausus “problem”." The Cambridge Law Journal 77, no. 1 (2018): 72-96. 13 Corkindale, J. "Land development in the United Kingdom: private property rights and public policy objectives." Environment and Planning A 31, no. 11 (1999): 2053-2070. 14 Young, James F. "Evidence Rules and Burden of Proof in Collision Cases." Tul. L. Rev. 51 (1976): 988.

This case has actively sort to place the problem at the forefront so as to highlight the necessary reforms that the law need to address in this area. As the commission recommend new property rights, that will be coherent, clear and convincing it is important that this issue is taken into consideration.

Bibliography

Austerberry v Corporation of Oldham (1885) 29 Ch. D. 750; see also Haywood v The Brunswick Permanent Benefit Building Society (1885) 8 Q.B.D. 403. Bevan, Chris. “THE DOCTRINE OF BENEFIT AND BURDEN: REFORMING THE LAW OF COVENANTS AND THE NUMERUS CLAUSUS “PROBLEM” (2018) < https://www.cambridge.org/core/journals/cambridge-law-journal/article/doctrine-ofbenefit-and-burden-reforming-the-law-of-covenants-and-the-numerus-claususproblem/A6A3D91A2D8879BEF11AD2F35B579FF4/core-reader> accessed 29th April 2019 Burns, Fiona R. "The Court of Chancery in the 19th Century: A Paradox of Decline and Expansion." U. Queensland LJ 21 (2000): 198. Corkindale, J. "Land development in the United Kingdom: private property rights and public policy objectives." Environment and Planning A 31, no. 11 (1999): 2053-2070. Cash, Andrew. "Freehold Covenants and the Potential Flaws in the Law Commission's 2011 Reform Proposals." The Conveyancer and Property Lawyer 2017, no. 3 (2017): 212-222. Gravells, N. "Enforcement of Positive Covenants Affecting Freehold Land”(1994)." LQR 110: 346-at. Keppell v Bailey (1834) 2 My. & K. 517, 39 E.R. 1042. Ison Harrison. “Covenants On A Property Explained” (2016). < https://www.isonharrison.co.uk/blog/covenants-on-a-property-explained> accessed 29th April 2019

Land Registry Documents. “All you Need to Know about Covenants” < https://www.landregistry-documents.co.uk/news-blog/covenantswhat-you-need-to-know-about/> accessed 29th April 2019 Lobel, Orly. "Intellectual property and restrictive covenants." ENCYCLOPEDIA OF LABOR AND EMPLOYMENT LAW AND ECONOMICS, Dau-Schmidt, Harris & Lobel, eds., Edward Elgar Publishing (2009): 08-059. Megarry, Robert, Charles Harpum, William Wade, Stuart Bridge, and Martin J. Dixon. The law of real property. Sweet & Maxwell, 2012. Phua, Casandra. "Is the Law Governing the Benefit and Burden of Freehold Covenants in Need of Reform." Exeter Student L. Rev. 2 (2016): 27. Rabiu, Abdul-Rasheed, and Kapil Sugand. "Has the sanctity of life law ‘gone too far’?: analysis of the sanctity of life doctrine and English case law shows that the sanctity of life law has not ‘gone too far’." Philosophy, Ethics, and Humanities in Medicine 9, no. 1 (2014): 5. Snape, John. "The benefit and burden of covenants-now where are we." Nottingham LJ 3 (1994): 68. Young, James F. "Evidence Rules and Burden of Proof in Collision Cases." Tul. L. Rev. 51 (1976): 988....