Covenants Flashcards
Covenants analysis (Benefit of a Positive Covenant)
(FIRST, can the covenantee’s successor enforce the positive covenant?)
While positive covenants are not registrable under the LTA, s 63 LTA states that ‘rights and powers appertaining [to the land]’ would vest in the transferee, and this should be interpreted to include the benefits of positive covenants annexed to the land at common law. Thus, (covenantee’s successor) can enforce the positive covenant if he/she can prove that the positive covenant is annexed to the land at common law.
(At Common Law)
(a. Express assignment under s 4(8) CLA)
The benefits of both positive and restrictive covenant can be expressly assigned as a chose in action under s 4(8) CLA. There must be an express notice of writing from the original covenantee to the successor.
(b. Common law annnexation)
The benefits of both positive and restrictive covenants may also be annexed to the land at common law.
First, the benefit must “touch and concern land. The benefit must affect the land per se and not merely from collateral circumstances, and it must be clear that the covenant benefits whoever may be the owner of the land and is not merely a personal benefit for the specific covenantee (Swift Investments). On the facts, …
Further, Smith and Snipes suggested that it must also be shown that it was the parties’ intention that the benefit should run with the land. This raises the question of whether in addition to an objective analysis of whether the benefit ‘touches and concerns land’, there must also be an express intention for the covenant to run with the land. On one view, this simply means that the covenant must not be expressed to be personal to the covenantee (TSY). On another view, there is no subjective requirement for an express intention (Gray & Gray). On the facts, … Since the subjective requirement is met / not met …
Second, there covenantee’s successor must have legal title to the land as no benefit can pass when the covenantee’s successor only has an equitable interest in the land.
Third, the covenantee successor must have the same legal estate as the original covenantee. In the UK, s 78(1) of the UK Property Law Act states that ‘persons deriving title under [the covenantee]’ would also be entitled to the benefit of the covenant, thus allowing a lessee under a freehold proprietor to also claim the benefit of a covenant made by the freehold proprietor (Smith and Snipes). However, since there is no equivalent provision in Singapore, it is still necessary for the covenantee successor to have the same legal estate as the original covenantee (TSY)
Finally, it appears that as far as positive covenants are concerned, the covenantor need not belong to a specific dominant tenement (Smith and Snipes).
(c. CRTPA)
Alternatively, the covenantee’s successor can enforce the covenant as a third-party under the CRTPA.
First, the covenantee’s successor must be a beneficiary of the covenant, and must be expressly identifiable by name, a member of a class, or description in the agreement. On the facts, …
Second, on a proper construction of the contract, it must appear that the original convenator and covenantee, as parties to the contract, had intended the term to be enforceable by the third party (the covenantee successor). On the facts, …
Alternatively, if the contract expressly provides that the third party (covenantee successor) may enforce the term (covenant), then he/she can certainly enforce it.
(In Equity)
???
(SECOND, has the covenant been discharged?)
a. If both the servient and dominant tenements come under the same ownership, then there is unity of ownership, and any covenants may be discharged.
(THIRD, what remedies are available?)
a. Damages
b. Injunction
c. Wrotham Park damages
d. Declaratory relief
Covenants analysis (Burden of a Positive Covenant)
(FIRST, is the covenantor’s successor bound by the positive covenant?)
Since positive covenants are not registrable under the LTA and only registrable covenants (i.e restrictive covenants) can burden a covenantor’s successors according to s 62 LTA, (covenantor’s successor on the facts) will not be bound by any positive covenant unless (1) there is a covenant made directly by (the covenantor’s successor) to (the covenantor) or (2) the covenant is an implied positive covenant under s 98 or s 102 LTA.
(At Common Law)
The general position is that a covenantor successor cannot be bound by any covenant in a contract which he did not enter into (Austerberry). A covenantor successor will only be bound by such a covenant if (1) there was a separate covenant made directly with the covenantor, (2) it is one of the implied positive covenants under the LTA, and (3) the covenant falls under the doctrine of mutual benefits and burden.
(a. Chain of covenants)
The covenantor can directly covenant and obtain an indemnity its successor-in-title. The successor will be directly bound to the original covenantor this way.
(b. Implied positive covenants in LTA)
Per s 98(4) LTA, when there is an implied easement under s 98(1) for the passage of water, electricity, drainage, gas and sewerage through the servient tenement and an implied easement to enter into the servient tenement to repair such pipes, there will also be an implied positive covenant to contribute to the costs of construction, maintenance or repair involved in these easements.
Per s 102 LTA, when there is a registered easement that contains a covenant to contribute to the cost of construction, maintenance or repair of any way, wall, drain, or any subject matter of the easement, then that easement will bind the covenantor’s successors. However, the covenantor and the successors will only be liable to contribute for expenditure incurred at the time they were proprietor of the tenement.
(c. Doctrine of mutual benefit and burden)
The doctrine of mutual benefit and burden allows for some burdens to bind the covenantor’s successors. However, this doctrine cannot apply for registered land because positive covenants are not registrable in the LTA.
To fall within this doctrine, there must be a benefit enjoyed that is reciprocal with the burden. The condition must be relevant to the exercise of the right enjoyed by the covenantor’s successor-in-title. The person must be able to elect giving up the benefit. If there is no corresponding benefit that can be given up, then there is no mutual benefit to the burden that can run with the land (Rhone v Stephens).
On the facts, …
(In Rhone v Stephens, the court rejected the claim because the obligation to repair the roof was a separate and independent clause from any benefit enjoyed by the covenantor’s successor in title)
(In Equity)
There is no doctrine in equity that allows the burden of a positive covenant to run with the land.
(SECOND, has the covenant been discharged?)
a. If both the servient and dominant tenements come under the same ownership, then there is unity of ownership, and any covenants may be discharged.
(THIRD, what remedies are available?)
a. Damages
b. Injunction
c. Wrotham Park damages
d. Declaratory relief
Covenants analysis (Benefit of a Restrictive Covenant)
(FIRST, can the covenantee’s successor enforce the restrictive covenant?)
Restrictive covenants are registrable per s 139 LTA by an instrument in the approved form, and s 62(1) LTA tells us that these registered covenants will be deemed to be made with the covenantee and its successors. However, s 139(6) indicates that registration is not wholly determinative, and a restrictive covenant must also be effective to bind the covenantee’s successors at common law. (s 63(1) may be the relevant provision instead)
Thus, the (covenantee’s successor on the facts) must prove that (1) the requirements under s 139(3) LTA are met and the covenant can be registered and (2) the covenant is also annexed or assigned at common law.
Firstly, to meet the requirements under s 139(3) LTA, the covenant must be (1) restrictive in substance and (2) accommodate a dominant tenement. On the facts, …
Secondly, the covenant must be annexed or assigned at common law. (Refer to one of the methods below)
(At Common Law)
(a. Express assignment under s 4(8) CLA)
The benefits of both positive and restrictive covenant can be expressly assigned as a chose in action under s 4(8) CLA. There must be an express notice of writing from the original covenantee to the successor.
(b. Common law annexation)
The benefits of both positive and restrictive covenants may also be annexed to the land at common law.
First, the benefit must “touch and concern land. The benefit must affect the land per se and not merely from collateral circumstances, and it must be clear that the covenant benefits whoever may be the owner of the land and is not merely a personal benefit for the specific covenantee (Swift Investments). On the facts, …
Further, Smith and Snipes suggested that it must also be shown that it was the parties’ intention that the benefit should run with the land. However, this requirement is abrogated in light of s 62(1) LTA, which tells us that these registered covenants are deemed to be made by the covenantor and its successors with the covenantee and its successors.
Second, there covenantee’s successor must have legal title to the land as no benefit can pass when the covenantee’s successor only has an equitable interest in the land.
Third, the covenantee successor must have the same legal estate as the original covenantee. In the UK, s 78(1) of the UK Property Law Act states that ‘persons deriving title under [the covenantee]’ would also be entitled to the benefit of the covenant, thus allowing a lessee under a freehold proprietor to also claim the benefit of a covenant made by the freehold proprietor (Smith and Snipes). However, since there is no equivalent provision in Singapore, it is still necessary for the covenantee successor to have the same legal estate as the original covenantee (TSY)
Finally, it appears that as far as positive covenants are concerned, the covenantor need not belong to a specific dominant tenement (Smith and Snipes).
(c. CRTPA)
Alternatively, the covenantee’s successor can enforce the positive or restrictive covenant as a third-party under the CRTPA.
First, the covenantee’s successor must be a beneficiary of the covenant, and must be expressly identifiable by name, a member of a class, or description in the agreement. On the facts, …
Second, on a proper construction of the contract, it must appear that the original convenator and covenantee, as parties to the contract, had intended the term to be enforceable by the third party (the covenantee successor). On the facts, …
Alternatively, if the contract expressly provides that the third party (covenantee successor) may enforce the term (covenant), then he/she can certainly enforce it.
(In Equity)
(a. Express annexation)
For the benefit to be expressly annexed with the land, (1) there must be express words to show that parties intended this effect, and (2) the land must be sufficiently defined. However, since s 62(1) LTA states that the registered covenants will be deemed to be made with the covenantee and its successors, the requirement for parties’ intentions is abrogated.
Thus, (the covenantee’s successor) only needs to prove that the land (dominant tenement) itself must be sufficiently defined. On the facts, …
(In Bath Rugby, the land was not sufficiently defined because the covenant was expressed to be for the benefit of “the neighbourhood”. The court held that “neighbourhood” was not a sufficiently defined area of land)
(b. Implied annexation) - Not relevant for registered land
Even if express words of annexation are not found, it may be possible to imply annexation (Marten v Flight Refuelling). The test is whether statements, taken with the surrounding circumstances, would show that the benefit is clearly intended to be annexed (TSY).
(c. Statutory annexation per s 57 CLPA) - Not relevant for registered land
s 57 CPA states that a covenant would be deemed to be made with the covenantee’s “heirs and assigns”. On one view, this would not be sufficient to annex the benefit of the covenant to the land because s 58 of the CA, which is UK’s pari materia legislation, has been construed by the EWCA in Sainsbury not to automatically annex the benefit of covenants to the covenantee’s land. Sainsbury has also been implicitly endorsed in the recent UK case of Bath Rugby. On the other view, Barry Crown suggests that this should be suficient to annex the benefit of the covenant to the land because Sainsbury’s interpretation of the UK pari materia s 58 CA should not be followed in Singapore. In my view…
(d. Equitable assignment)
To assign the benefit of a restrictive covenant in equity, the 3 requirements in Miles v Easter must be met.
Firstly, the covenant must be taken for benefit of ascertainable land of covenantee at the date of the covenant.
Secondly, the claimant must be the present owner of the land (i.e. a covenantee cannot enforce a covenant relating to land after he has sold it).
Thirdly, the claimant must have been expressly assigned the benefit either in the conveyance of land, or a deed executed sufficiently contemporaneously with it, but not after.
(Conclusion)
Since the restrictive covenant is unenforceable, per s 139(8) LTA, the allegedly servient owner may apply for the registered covenant to be cancelled.
(SECOND, has the covenant been discharged?)
a. If both the servient and dominant tenements come under the same ownership, then there is unity of ownership, and any covenants may be discharged.
(THIRD, what remedies are available?)
a. Damages
b. Injunction
c. Wrotham Park damages
d. Declaratory relief
Covenants analysis (Burden of a Restrictive Covenant)
(FIRST, will the covenantor’s successor be bound by the restrictive covenant?)
Restrictive covenants are registrable per s 139 LTA by an instrument in the approved form, and s 62(1) LTA tells us that these registered covenants will be deemed to be made by the covenantor and its successors. However, s 139(6) indicates that registration is not wholly determinative, and a restrictive covenant must also be effective to bind the covenantor’s successors at common law.
Thus, the (covenantee’s successor on the facts) must prove that (1) the requirements under s 139(3) LTA are met and the covenant can be registered and (2) the covenant is also annexed or assigned at common law.
Firstly, to meet the requirements under s 139(3) LTA, the covenant must be (1) restrictive in substance and (2) accommodate a dominant tenement. On the facts, …
Secondly, the covenant must be annexed or assigned at common law. (Refer to one of the methods below)
(At Common Law)
The general position at common law is that a covenantor successor cannot be bound by a covenant in a contract which he did not enter into (Austerberry). A covenantor successor will only be bound by a restrictive covenant if (1) there was a separate covenant made directly with the covenantor and (2) the covenant falls under the doctrine of mutual benefits and burden.
(a. Chain of covenants)
The covenantor can directly covenant and obtain an indemnity its successor-in-title. The successor will be directly bound to the original covenantor this way.
(b. Doctrine of mutual benefit and burden)
The doctrine of mutual benefit and burden allows for some burdens to bind the covenantor’s successors. Unlike for positive covenants, this doctrine may apply for restrictive covenants in registered land since restrictive covenants can be registered under the LTA.
To fall within this doctrine, there must be a benefit enjoyed that is reciprocal with the burden. The condition must be relevant to the exercise of the right enjoyed by the covenantor’s successor-in-title. The person must be able to elect giving up the benefit. If there is no corresponding benefit that can be given up, then there is no mutual benefit to the burden that can run with the land (Rhone v Stephens).
On the facts, …
(In Rhone v Stephens, the court rejected the claim because the obligation to repair the roof was a separate and independent clause from any benefit enjoyed by the covenantor’s successor in title)
(In Equity)
The burden of a restrictive covenant may run with the land per the doctrine in Tulk v Moxhay
First, the covenant must be negative in substance. On the facts…
(A covenant that requires an expenditure of money is a positive covenant (Austerberry))
Second, the covenant must accommodate a dominant tenement. This means that the covenant must touch and concern land in relation to the dominant tenement (Rogers v Hosegood) On the facts, …
Third, there must be an intention for the covenant to run with the land. While s 79(1) LPA in UK provides that all covenants are deemed to be made with the covenantor and his successors, there is no equivalent provision in Singapore. Thus, in SG there must be express words stating the intention for the covenant to run with the covenantor’s land. TSY suggests that a reference to the covenantor’s successors in title will likely suffice. On the facts, ….
Since these 3 requirements are met, and the covenantor’s successor is not a bona fide purchaser without notice, the restrictive covenant will be binding on him.
Even though these 3 requirements are met, since the covenantor’s successor is a bona fide purchaser without notice, the restrictive covenant will not be binding on him.
(SECOND, has the covenant been discharged?)
a. If both the servient and dominant tenements come under the same ownership, then there is unity of ownership, and any covenants may be discharged.
(THIRD, what remedies are available?)
a. Damages
b. Injunction
c. Wrotham Park damages
d. Declaratory relief
