Suggested Answer to Exercise 9.3 (Part 3)
A Detailed Answer Plan
Highlighted text indicates that further details are available by selecting it.
Covenants bind the original parties. In this case neither Rita nor Yehudi were the original parties to the covenant. However, Barry, if still alive, may have been a party: Section 56 of the LPA 1925 provides that a person may take the benefit of a covenant even though he is not named in the conveyance provided that he was identifiable and alive at the date of the conveyance. The words in the conveyance to Phil are sufficient: see, for example, Re Ecclesiastical Commissioners for England’s Conveyance  Ch 430.
The benefit of a covenant may run at law, but not burden: Austerberry v Corporation of Oldham (1885) 29 Ch D 750 and Rhone v Stephens  2 AC 310. However, since the case of Tulk v Moxhay (1848) 2 Ph 774 it has been possible for the benefit and burden of a restrictive covenant to pass in equity. It is necessary, therefore, to establish whether the benefit and burden of the two covenants have passed to the present owners of the land.
Not to Build More than One House
- The burden
- This covenant does not compel Phil to build a house, but merely limits the number of houses he can build on the land. It is, therefore, restrictive.
- The covenant must benefit the claimant’s land: London CC v Allen  3KB 642.
- Karen’s estate in the retained part of the ‘Chequers estate’ has been transferred to Yehudi. A common way of establishing whether a covenant benefits land is to determine whether the land is more valuable if it has the benefit of the covenant. This is likely to be the case here.
- It is not stated whether Karen and Phil intended the covenant to run with the land. However, provided that they did not state any intention to the contrary in the conveyance, intention will be implied by virtue of section 79 of the LPA 1925.
- It is not clear whether the burdened land was registered or unregistered in 1965 (although it will certainly now be registered if Rita acquired it after 1990). If the title to Phil’s land was unregistered after he acquired it, the burden of the covenant will only be enforceable if it was protected by registration of a class D(ii) land charge against Phil. If, however, Phil’s title was subject to registration in 1965 the covenant needed to be protected by an entry on the Title Register.
- The Benefit
- The benefit of the covenant will pass to Yehudi if it is annexed to his land, assigned to him, or if the covenant was made as part of a building scheme.
- Following Federated Homes Ltd v Mill Lodge Properties Ltd  1 WLR 594 a covenant made after 1925 is deemed to be annexed to the land by virtue of section 78 of the LPA 1925, unless the parties express an intention to the contrary in the conveyance (Roake v Chadha  3 WLR 40).
- The covenant will only be annexed if the benefiting land is sufficiently identifiable: Crest Nicholson Residential (South) Ltd v McAllister  1 WLR 2409. The question in this case does not make it clear whether the conveyance to Phil expressly identified the land that benefited from the covenant. However, the covenants were made ‘also with the owners for the time being of adjoining land, formerly part of the Chequers Estate’. This may be sufficient to identify the benefiting land as the retained land and that already transferred to Barry, provided that there is sufficient extrinsic evidence of the extent of the ‘Chequers Estate’.
- If the benefit and burden have passed, both Rita and Barry (or his successor in title) will be entitled to injunctive relief against Rita.
To erect and maintain the fence…
- If Barry is still alive, he will be able to seek damages from Phil.
- This is a positive covenant. The burden cannot pass to Rita either at common law, or in equity: Rhone v Stephens.
- However, the benefit may pass at common law by express assignment or by annexation. The scope of implied annexation is discussed above. Yehudi and Barry’s successor in title may, therefore, be able to recover damages from Phil.
- Phil will only be able to take action against Rita if the conveyance to Rita included a covenant to observe the earlier covenants and/or to indemnify Phil.
Discharging or Modifying the Restrictive Covenant
Rita could make an application to the Lands Tribunal to have the covenant discharged or modified: section 84 of the LPA 1925. The grounds are set out in the section. The most relevant ground in this case is that the covenant is obsolete due to the building of the council estate (LPA 1925, s 84(1)(a)). Alternatively Rita may argue that under section 84(1)(aa) of the LPA 1925 that the covenant impedes her reasonable use of the land, that a money payment will provide sufficient compensation and that the covenant is either of no substantial benefit or contrary to the public interest. Each application turns on its own facts. It is not possible to advise on Rita’s chances of success without much more information about the three pieces of land and their relationship to the housing estate.