Week 7- Covenants: Flashcards
What is the rule in Tulk v Moxhay regarding the burden of freehold covenants?
What were the facts?
When a purchaser is given notice of a covenant, the covenant will bind them as a third party- note that the doctrine of notice has been replaced by a statutory scheme of registration, and thus registration of a covenant on the register will count as notice capable of binding successors.
T sold land and the buyer promised that he and successors in title will keep the garden in its present form
M then bought the land and sought to build a garden despite knowing about the covenant before buying the land and had paid less for it
T sought to enforce the covenant
Held: T’s claim allowed, M is bound by the covenant. The burden of the covenant that the purchaser would upkeep the garden ran with the land, despite not being expressed in the latest conveyance.
What four requirements are to be satisfied if the burden is to run with the land?
After the case, instead of the first narrow privity of estate, any restrictive covenant chiefly needed satisfy four lesser requirements to bind the successors in title:
1) The covenant must be restrictive
2) At the date of the covenant, the covenantee owned land that was benefited by the covenant
3) The original parties intended the burden to run with the land to bind successors 8Note that s79 of LOPA makes this a rebuttable presumption that the covenant be perpetual*
4) The covenantor must take with notice of the covenant (registration regime makes it a registerable interest and thus qualifies as an overriding interest anyway)
What is the key distinction between Tulk v Moxhay and Haywood v Brunswick?
Tulk only refers to restrictive covenants, requiring a purchaser in land not to do something, whereas Haywood shows that this cannot apply to positive covenants which would otherwise compel purchasers of land to do something.
Facts
Land was granted by A to B, B in return covenanted that he and his successors will keep the land in repair and pay rent to A and A’s successors
The benefit was assigned to H
The land was subject to mortgage and later seized by bank BBS
Issue: was BBS liable under the covenants?
Held: BBS was not liable; the covenant to repair is not restrictive and thus the burden did not pass
Cotton LJ
The covenant to repair can only be enforced by making the owner put his hand into his pocket, and there is nothing which would justify us in going that length
Facts and significance of Rhone v Stephens regarding burden of positive covenant?
Facts- Appeal against the decision that the executrix of an estate of a property, that she was not bound by a covenant entered into by her predecessor that she to repair part of the roof which overhung the defendants property. “Clause 2 of the 1960 conveyance had the effect, inter alia, of conferring and confirming on Walford House the right to be supported by the contiguous Walford Cottage. The 1960 conveyance also had the effect of conferring and confirming on Walford Cottage the right to be supported by Walford House. Clause 3 of the 1960 conveyance did not confer any rights on Walford Cottage but by its express terms it appears to confer on the owners for the time being of Walford Cottage the right to sue the owner for the time being of Walford House for damages if the roof is not kept wind and watertight.”
Significance- Appeal dismissed- No scope to overrule the previous decision that, in the absence of a restrictive covenant, an owner of land could not be compelled to comply with positive covenants entered into by predecessors (may be different now that the land registration act dictates registerable and overriding interests).
What might be the theoretical justification for restrictive covenants binding third parties but positive covenants not?
What might be the policy reasons?
Theoretical justification
Equity does not contradict the common law by allowing burden to pass as the successor in title of the covenantor is prevented from exercising a right which he never acquired
The burden of a restrictive covenant is an absence of right that is passed down, in contrast, enforcement of a positive covenant lies in contract since a positive covenant compels an owner to exercise his rights
Enforcement of a positive covenant would violate the common law rule that a third party cannot be made liable for a contract.
Policy reasons- Judicial legislation’ would create difficulties and uncertainties
In leaseholds, the enforceability of positive covenants has led to tenants losing their homes and being faced with costs of restoring buildings
How does Rhone v Stephens explain the benefit and burden principle, especially in the positive covenant context?
I am not prepared to recognise the ‘pure principle’ that any party deriving any benefit from a conveyance must accept any burden in the same conveyance
Under the principle of benefit and burden the condition has to be relevant to the right, not all conditions can be rendered enforceable by attaching it to a right
The successor in title claiming the benefit must be able to at least in theory choose to between obtaining the right and paying the cost or not obtaining the right and saving the cost
Why was the covenant in London & South western railway co v gomm 1882 not enforceable?
The purchaser took the estate subject to the equitable burden, with the qualification that if he acquired the legal estate for value without notice he was freed from the burden.’
A negative covenant validly created, entered into by an owner of land with an adjoining owner, such as a covenant restricting the user of the land, binds the land in equity, as being in the nature of a negative easement: London and South Western Ry. Co. v. Gomm, (1882) 20 Ch. D. 562 , 583; and it can, therefore, be enforced against any subsequent owner of the land not being a bona fide purchaser for value of the legal estate without notice.
What does Re Nesbit and Potts contract show about covenants relating to squatters with notice? (note the new legislative scheme)
That restrictive covenants run with the land as against anyone including someone in adverse possession. he had constructive notice in this case. This would be so where a covenant is registered under s32 of the LRA 2002 and this would serve a squatter with notice.
Facts and significance of LCC v Allen?
Facts
Allen promised the C (council) that he will not build on a strip of land needed for the continuation of a road
The burdened land was conveyed to his wife D who proceeded to build on it
Held (Court of Appeal)
C could not enforce the covenant because it had sold the benefiting land.
A claimant must have title to the dominant land to a restrictive covenant if they are to enforce the land over which the covenant runs. The covenant was no longer enforceable by the council once they had sold the land, and so only the new owners could enforce it.
What does s79 of the 1925 act say?
Burden of covenants relating to land.
(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. (liability including owners and occupiers, so leasing the land to someone else wouldn’t remove the landowner from his obligation under the covenant).
(3)This section applies only to covenants made after the commencement of this Act.
What is the importance of s32 of the 2002 act?
Nature and effect
(1) A notice is an entry in the register in respect of the burden of an interest affecting a registered estate or charge.
(2) The entry of a notice is to be made in relation to the registered estate or charge affected by the interest concerned.
(3) 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.
Where a positive covenant has been entered in to, and the positive obligation is imposed upon someone, what is required before the covenant can be enforced against them so that they are expected to spend money to carry it out, following Thamesmead town v Allotey?
-In Thamesmead, a conveyance included a positive covenant to the purchaser to maintain and repair communal areas, and a further obligation to covenant this to successors. However, not only were the defendants not entitled to use the communal areas that they had covenanted to repair, the original estate company never were obliged to carry out the covenant in question themselves.
Thus, one cannot be expected to carry out a covenant for something for which they are not entitled to the benefit of.
What do the two cases of Thamesmead town and Wilkinson say about the apportionment of fees where a defendant pays to discharge his obligation under a positive covenant/ when are/ aren’t they obliged to pay the full fee?
Where at least part of the fees payable relate to the right/ benefit obtained under a covenant, and the apportionment of fees is impossible, the covenantee is liable for the full fee (Wilkinson v Kerdene)
Where the apportionment of fees for discharging covenant is possible, covenantee is not liable for fees for property which he has no access to (Thamesmead Town Ltd v Allotey)
Can a positive covenant be enforced against a successor in title?
Yes- but mere registration of the covenant alone will not suffice to enforce the covenant against them. As shown in Rhone v Stephens, the purchaser must have the option to reject the covenant and thus forfeit its benefits, and the conditions of the covenant must be relevant to the right obtained by the covenantee for discharging their obligation under the covenant.
what does s79 of the LOPA dictate and how is it different to s78?
S78 dictates that any benefit of a covenant runs with the land, so long as the covenant touches and concerns the land of the covenantee. This is so whether the covenant is positive or restrictive. It is effectively statutory annexation of the benefit of any covenant to the covenantee’s land and thus benefits any owner, person deriving title or other party interested in land.
S79- has the effect of incorporating the Tulk v Moxhay rule by professing that only the benefit of restrictive covenants will pass with the land, more being necessary for a positive covenant to be enforceable against a subsequent landowner, especially under the new registration regime under 2002 act.
