Covenants

Who is a covenantee

S56, LPA

covenant as a property right

S 1(3), LPA

substantive req for benefit of freehold covenants to be enforceable in equity against successors in title

duality principle must be satisfied (both burden has passed to the defendant and the benefit has passed to the claimant)

annexation

implication of intent unless parties opt out:  LPA 1925, s 78 (1)

1. Federated Homes v Mill Lodge Properties [1980] 1 WLR 594 (CA): covenant enforced through s78 to annex the benefit of the covenant to the land

benfitted land must be identifiable

Bath Rugby Ltd v Greenwood [2021]

The covenant relates to land as it regulates how the burdened land is to be used.

Neighbouring land is sufficiently proximate.

It benefits the land rather than the owner personally, applying P&A Swift.

The covenantee owned the benefited land when covenant was made (London CC v Allen).

Substantive req for burden of freehold covenants to be enforceable in equity against successors in title

must be a legal or equitable estate: miles v easter

covenant must be restrictive:

1. Tulk v Moxhay: covenant to ‘keep and maintain’ was negative because the owner could not build

2. Austerberry v Oldham Corporation (1885) 29 Ch D 750

   1. principle: positive covenants do not exist because they’re inequitable

3. rhone v stephens: equity could not compel an owner to comply with positive covenants entered into by his predecessors in title.

covenant must touch and concern the land: Equity will only enforce the covenant if it is to protect the value and amenity of the covenantee’s neighbouring land

test: P & A Swift Investments v Combined English Stores Group plc [1989] AC 632 (HL):

1. The covenant benefits only the landowner for the time being, and 

2. if separated from the land ceases to be of benefit to the covenantee, and​

3. The covenant affects the nature, quality, mode of user or value of the land, and​.

4. The covenant is not expressed to be personal​.

At the time of the covenant, the covenantee must have owned the benefitting land:

London County Council v Allen: owner covenanted with CC to not build on land which was needed to build a road → sold land to B → held that the covenant could not be enforced on B because CC did not own the benefitting land at the time of contracting.

The original parties must have intended the covenant to run with the land.

1. implied by LPA 1925, s 79 (1)

   1. covenantors’ successors, if in breach can be liable unless a contrary intention is expressed. It is presumed that the og parties intended to have the covenant run w the land.

      1. contrary intent can be when the house is sold and the og owner indemnifies the new owner

      2. The covenant must be entered as a Notice (s 32 LRA 2002) on the title of the burdened land in order to be protected

      3. Morrells of Oxford Ltd v Oxford United Football Club Ltd [2001] Ch 459 (CA)—application of a rebuttal of presumption due to express wording and context

acquistion req

LPA 1925, S 53(1)(a)

• signed writing + lawfully authorised in writing, by will, or by operation of law.

• In practice: always done in a deed.

Note: s1 LPA: a covenant is not capable of being a legal property right — it can only be equitable.

priority rules

For a covenant to bind a SIT covenantor, the person with the benefit must have priority over the SIT covenantor. Normal priority rules apply.

• s29(2)(a)(i) LRA: notice on the register — the most common method of protection.

• s29(2)(1)(ii) + Sch 3 LRA: overriding interest provisions (possible but unlikely).

• If the covenantee still owns the land, they automatically have the benefit (it is just a contract).

Note: Because covenants are equitable only (s1 LPA), they must be protected on the register to bind a purchaser for value taking a registered disposition (s29(1) LRA).

Enforceability of Positive Freehold Covenants against Successors in title to the Covenantor:

benefit & burden principle

Halsall v Brizell [1957] Ch 169

1. If a successor in title accepted the benefit of a right it must also take the burden

davies v jones: lays down three pre-requisite conditions which need to be in existence before the burden of a positive covenant will be enforceable against a covenantor’s successor(s) in title.

1. both benefit and burden must be within the same transaction

2. must have correlation—enjoyment must be relevant to the imposition of the burden

3. person on whom burden is imposed must have the opportunity to reject or disclaim the benefit

Rhone v Stephens [1994] 2 AC 310 (HL): benefit and burden principle not accepted because conditions attached to the exercise of a power could only be enforceable if relevant to the exercise of the right to which they were attached.

remedies

• Common law damages — only available against the original covenantor (burden never runs at CL).

• Injunction (or damages in lieu) — discretionary; can be sought against the covenantor or SIT covenantor where the infringement is ongoing.

• Specific performance — to enforce a positive covenant where the covenantor still owns the land

Discharge and Modification

Jurisdiction: LPA 1925, s 84 – focus on ground (1)(aa) only.

1. For s84(1)(aa) to be engaged, two conditions must be satisfied:

   • (i) Must fall within s84(1A); AND

   • (ii) Continued existence of the covenant in its current form would impede some reasonable use of the land (public or private).

case law:

1. Great Jackson St Estates Ltd v The Council of the City of Manchester: demolish the warehouses and replace them with two 56-storey tower blocks containing just over 1,000 flats.—refued

2. Shephard v Turner:

3. Morris v Brookmans Park Roads Ltd: Knocking down a house in an expensive suburban development to build 5 flats—application refused.

4. University of Chester, Re Land at Sandy Lane: Building a rowing and fitness facility for students would be impeded by a covenant to not use the land for business purposes, i.e., anything that is not residential—reasonable user

5. holden: setting up a dog grooming business can be prevented by a covenant that prevents business purposes on the property—modification granted.

not in public interest: Alexander Devine Children’s Cancer Trust v Housing Solutions Ltd

Practical benefits of substantial value (s84(1A)(a))

• Practical benefits: wide concept (Great Jackson Street Estates) — need not benefit the land specifically; can be personal, but must be a real benefit, not an opportunity to extract money.

• Must be causally linked to the covenant ('secures') — compliance with the covenant must produce the benefit, not its discharge.

• morris v brooksman: parking spaces for residents were not a practical benefit of substantial value—thin end of the wedge argument—eroding the character of the area; money also not adequate compensation

Stage 2 — Discretion

• The tribunal usually allows modification, but it is not guaranteed.

• 'Cynical breach' before applying — where a developer breaches the covenant first to force the tribunal's hand — can be a reason to REFUSE relief (Alexander Devine CCT v Housing Solutions, Lord Burrows in UKSC).

• Courts are generally reluctant to order demolition as too oppressive, which is why cynical breach is a recognised tactic — but one the courts will penalise.