Freehold Covenants

Question 1

How may the benefit of a freehold covenant pass in common law to a new owner?

Answer 1

1. Express assignment (s136 LPA 1925)

2. Implied passing (P&A Swift Investments v Combined English Stores Group plc)

Question 2

What are the four steps to ascertaining whether the benefit of a freehold covenant has passed to a new owner impliedly in common law?

Answer 2

1. The covenant touches and concerns the land;
2. The original parties intended the benefit to run;
3. The covenantee must have held a legal estate in the land at the time the covenant was made;
4. Successors in title must hold a legal estate in the land.

Question 3

According to Lord Oliver of Aylmerton what is meant by touching and concerning the land in P&A Swift Investments v Combined English Stores plc?

Answer 3

1. The covenant only benefits the covenantee while in possession of the land;
2. The covenant affects the nature, quality, mode of user or value of the land;
3. The covenant is not expressed to be personal;
4. The fact that the covenant is to pay a sum of money is not a bar against it touching and concerning the land.

Question 4

In which case was it held that a covenant not to compete with the business of the convenantee does touch and concern the land?

Answer 4

Newton Abbot Co-operative Society Ltd v Williamson & Treadgold Ltd

Question 5

How must a legal freehold covenant be created?

Answer 5

By deed

Question 6

What is the effect if the covenant deed does not expressly state that the benefit should run with the land?

Answer 6

s78 LPA 1925 will imply that the current owners/occupiers are successors in title benefiting from the covenant.

Question 7

Historically it was necessary for a successor in title to have the same type of legal estate ie f/h or l/h as the original covenantee in order to enforce the covenant. Which case overruled and instated s78 LPA 1925 as allowing successors of title of any estate the ability to sue?

Answer 7

Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board

Question 8

Who is able to sue for a breach of covenant according to s56 LPA 1925?

Answer 8

A person who was not party to the covenant

Question 9

Which case limited the effect of s56 LPA 1925 to mean only parties who were identifiable from the wording of the covenant could sue?

Answer 9

Beswick v Beswick

Question 10

Which statutory provision may have usurped s56 LPA 1925 in allowing third parties to sue for breach of covenant?

Answer 10

s1 Contracts (Rights of Third Parties) Act 1999

Question 11

In the odd situation where the original covenantee has parted with the land and wants to sue for breach of covenant is it possible for them to do so?

Answer 11

Yes, but only if they have not expressly assigned the covenant under s136 LPA 1925 and the covenant was drafted in a way so as to benefit the covenantee beyond their ownership of the land ie it was a personal covenant.

Question 12

Under the common law can the burden of a covenant pass to a successor in title?

Answer 12

No (Austerberry v Oldham Corpn)

Question 13

What theoretical ways around are there to the limitation on passing of burdens of covenant?

Answer 13

1. Pursue the original covenantor and indemnities
2. The exception in Halsall v Brizell
3. Covenantee grants a long lease rather than selling off part of their land as f/h
4. Create a commonhold
5. Place a s40 restriction so as to force every new purchaser to create a covenant.

Question 14

Which statutory provision implies, where it is not expressed, that the burden in common law will remain with the original covenantor even when land has been passed on to successors in title? Which case confirms this?

Answer 14

s79 LPA 1925 is confirmed by Tophams Ltd v Earl of Sefton

Question 15

What is the problem with pursuing the original covenantor and not being able to pursue the successor in title?

Answer 15

Pursuing the original covenantor does not remove the possibility of the current owner/occupier continuing to breach the covenant. It does not allow the claimant to obtain specific performance or an injunction against the person in breach, only damages against the covenantor.

Question 16

If the original covenantor is sued for the successor in title’s breach of a covenant how may they recoup their losses and how might this dissuade breaches of covenant?

Answer 16

If the original covenantor took out an indemnity when passing the land to their successor they could recoup from them and dissuade them from committing a breach of covenant.

Question 17

When does the exception in Halsall v Brizell operate?

Answer 17

Where the covenantee grants a benefit to the covenantor which is necessarily accompanied by a burden eg the right to use a driveway or drain comes with the burden of having to maintain it.

Question 18

Which case confirmed that the exception in Halsall v Brizell is only available where the burden and benefit are mutual and there is no general principle to take any burden that arises out of a benefit?

Answer 18

Rhone v Stevens

Question 19

According to the case of Thamesmead Town Ltd v Allotey what two requirements have to be satisfied in order to use the exception in Halsall v Brizell?

Answer 19

1. The discharge of the burden should be related to the benefit;
2. The successor should have the option to deny the benefit and the burden

Question 20

What four requirements are there for the burden to have passed at equity? What case is this said to have come from?

Answer 20

1. The covenant must be negative
2. The covenant must accommodate the dominant tenement, meaning
   a) the covenantee and successors in title must have had interest in the dominant tenement at the time of creation and enforcement respectively
   b) the covenant must touch and concern the land
   c) there must be sufficient proximity between the dominant and servient tenements
3. The original parties must have intended the burden to run
4. A purchaser of the servient land must have had notice

Question 21

How do we tell whether a covenant is positive or negative?

Answer 21

By looking at its substance/effect not its form/expression. According to the case of Haywood v Brunswick Permanent Benefit Building Society if the covenant requires a person to spend money in order to see that the covenant is upheld then it is positive.

Question 22

Some covenants may be both positive and negative. How are these treated?

Answer 22

1. Either the positive and negative parts are split (Shepherd Homes Ltd v Sandham (No 2))
2. Or the covenant is taken as a whole to be positive or negative (Powell v Hemsley)

Question 23

In which case did Lord Templeman confirm that the burden of positive covenants will not pass in equity? What two ways then are left for a covenantee to enforce a positive covenant?

Answer 23

Rhone v Stevens

The covenantee will either have to pursue the original covenantor or argue for the exception in Halsall v Brizell.

Question 24

Which case may we use as an authority for the rule that there must be sufficient proximity between the dominant and servient tenements for the burden of a covenant to run in equity?

Answer 24

Bailey v Stephens

Question 25

What principle on the running of the burden in equity does LCC v Allen confirm?

Answer 25

The covenantee and successor in title must have an interest in the dominant tenement at the time of creation and enforcement of the covenant respectively.

Question 26

Section 78 LPA 1925 implies an intention for the benefit of an intention to run. Which statutory provision implies an intention for the burden to run in equity (not at common law due to Austerberry v Oldham Corpn)? Which case applied this rule?

Answer 26

Section 79 LPA 1925 applied in Morrells of Oxford Ltd v Oxford United FC Ltd and Others.

Question 27

What will stop the implication that the burden was intended to pass in equity?

Answer 27

An express provision stating there was no intention for the burden to pass in equity.

Question 28

What constitutes notice in relation to the passing of the burden of a covenant in registered land?

Answer 28

Section 32 LRA 2002 notice on the charges register.

Question 29

Who can take free from the burden of a covenant in registered land if there is no s32 notice in the charges register?

Answer 29

A purchaser for valuable consideration (s29 LRA 2002)

Question 30

What constitutes notice in relation to the passing of the burden of a covenant in unregistered land?

Answer 30

For a covenant imposed after 1925 the covenantee must register a D(ii) land charge to give notice (s198 LPA 1925).

Question 31

Who can take free from the burden of a covenant in unregistered land if there is no D(ii) land charge?

Answer 31

A purchaser for money or money’s worth of a legal estate (s4(6) Land Charges Act 1972).

Question 32

What rules apply to pre-1926 restrictive covenants?

Answer 32

The doctrine of notice

Question 33

What is meant by the doctrine of notice?

Answer 33

Notice (actual, constructive, or imputed) may be enforced against anyone except a bona fide purchaser for value of a legal estate without notice.