Restrictive Covenants

Question 1

Tulk v Moxhay

Answer 1

Facts: P sold land in Liecester Square to A, with convenant to maintain garden (not to develop into something else). A conveyed to D, which contained no such covenant.

Held: P wins, injunction remains. If an equity is attached to property by the owner, no one purchasing with notice of that equity can stand in a different situation from that of the party from whom he purchased.

Reasons:
- Basically would be profiting off of a loophole by buying land with covenant and then selling without

Question 2

Austerberry v Oldham

Answer 2

Facts: A conveyed land to B with covenant to maintain road (necessary for A to get from one part of his land to the other). A sold land to P, B sold land to D.

Held: D wins. It’s not a restrictive covenant as it binds D to expend own money to do something on their land, so CoE would reject. Also rejected in CoL, as covenant was for benefit of public at large, not A/P.

Reasons:
- It’s not a restrictive covenant (not restraining D form using land in a certain way).
o Courts of equity will hold restrictive covenants binding on new owners
o CoE will not hold such a convent as this one binding, which would cause them to undertake a burden on themselves by spending sums of money
- Is there a covenant by court of law?
o This requires two things
1. Burden of covenant
2. Benefit of covenant
o Unless P can show he’s entitled to the benefit, and that D is subject to the burden, can’t establish a covenant by law
o The benefit of the covenant was for the public at large, not directly running with the land, or the enjoyment/benefit of the land, of A
o This shows covenant not made in a way which relates to the land of A and therefore P
o Therefore, don’t have to touch the burden step, this is not a covenant at law

Question 3

Berry v Indian Park

Answer 3

Facts: Homeowners association D has Phase I II and III houses in Sugarbush community. Phase I and II (vendors Kitwee and Modco) have rustic cottages with lots of benefits like garbage removal, Phase III (vendor Monica) more modern subdivision which had municipal authorities handle it. P Phase III residents upset they have to pay into association for benefits they don’t need, and pissed they have to follow all sorts of restrictive covenants.

Principle: A restrictive covenant may be enforceable if the land is included within a building scheme.

Elliston v Reacher rule: to enforce restrictive covenants as part of a valid scheme it must be proved

1. Both P and D derive title under a common vendor (this has been relaxed in some courts)
2. Previous to selling lands to which P/D entitled, vendor laid out in estate for sale in the lots subject to restrictions intended to be imposed on the lots, which are consistent with a general scheme of development
3. Restrictions intended by vendor to be for benefit of all lots
4. Both P and D (or their predecessors) purchased lots upon footing that the restrictions were to take effect for benefit of other lots

Held: P wins, restrictive covenants not binding on Phase III residents.
Reasons:
- D accepts Tulk v Moxhay rule doesn’t apply as the restrictive covenants don’t run with the Phase III lands
- D instead claims another exception: building schemes
- ONCA says Elliston rules apply, but also Land Titles Act, which permits restrictive conveants to be registered and thus annexed to the land
o TJ looked at both and found vendor had no building scheme over Phase III land
- ONCA agrees, no building scheme
1. Vendor did not apply to register the land use restrictions (now sought by D as restrictive covenants) under s 118 Land Titles Act. Instead, vendor just registered notice of them. Registering notice does not have the legal effect of annexing land use restrictions to the Phase III lots. This differs from Phases I and II which were registered under s 118.
2. Requirements of Elliston have not been met. No common vendor, as D received land from three different vendors. Some courts have relaxed requirement 1, so even assuming 1 is met, 2 is not met. When Phase I and Phase II of community was developed by vendors Kitwee and Modco, Phase III of community was not laid out or defined as part of the community (it wasn’t even contemplated). Also, uncertain that Monica intended to establish a valid building scheme and to impose D’s bylaws on Phase III owners (contrast with earlier Phases’ vendors, which expressly did). Also, the Phase III development not consistent with the scheme established in P 1/2: benefits not shared, 1/2 are recreational cottage community, 3 is modern subdivision.