Sale of land – Conveyance – Restrictive covenant – Claimant college acquiring land for campus – Earlier conveyance containing covenants restricting use of land – Claimant obtaining planning permission to redevelop land — Defendants seeking to rely on restrictive covenants to restrain development – Claimant seeking declaration that covenants no longer applicable – Whether covenants still attaching to land – Application granted
The claimant college wanted to redevelop its campus. The proposed development involved the phased demolition of the existing properties and the construction of new buildings at a cost of approximately £173m.. A resolution to grant planning permission was passed, but it provoked opposition from local residents.
The campus comprised four parcels of land that had been acquired at different times but had originally formed part of an estate owned by the Trafford family that had been sold off in plots. The main redevelopment was confined to land that was the subject of a 1936 conveyance which contained restrictions on the use of the land so as not to cause nuisance or annoyance to neighbours. The objectors argued that the restrictive covenants precluded the claimant from proceeding with the development. The first and second defendants originally asserted that their properties enjoyed the benefit of the covenants and that they were entitled to enforce them.
The claimant applied to the court for a declaration, under section 84(2) of the Law of Property Act 1925, that the land in question was no longer affected by the restrictive covenants and that they were no longer enforceable. The covenants in question were stated to be “for the benefit of the Trafford estate… or parts thereof for the time being remaining unsold”. The claimant contended that, on the true interpretation of the conveyance and for the purposes of section 78(1) of the 1925 Act, the effect of the wording was to limit the annexation of the benefit of the covenants to the land belonging to the vendor at the date of the conveyance and thereafter to his successor in title to the estate.
The first defendant defended the action; the second defendant did not take part.
Held: The application was granted.
The procedure under section 84(2) might usefully be invoked where a claimant believed that a covenant was, on its proper construction, no longer enforceable and wanted to obtain a clean title, clear of any restrictions. Its value was that it was binding in rem on all persons entitled to the benefit of the restriction, whether or not they were parties to the proceedings. Accordingly, it was well established that when an order of this type was sought, the court ought to make every effort to see that all persons who might wish to oppose the making of the order had the opportunity of being heard, stating their objections in argument before the court, and inviting the court to refuse to exercise its powers: Re Sunnyfield [1932] 1 Ch 79 considered.
The claimant’s interpretation was correct. The covenants contained an express reference both to the vendor and his successors in title, so necessarily looking to the future. Moreover, the benefit of the covenants was annexed only to the part or parts of the Trafford estate for the time being remaining unsold. Those words again looked to the future and were necessary only if the interpretation for which the claimant contended was correct. The wording of the positive covenant imposed by para 1 of the first schedule suggested that it was imposed for the benefit of the vendor and not all persons to whom any part of the estate might be sold. Specifically, it imposed on the purchaser an obligation to build and thereafter maintain a fence to the satisfaction of the vendor’s agent.
Where development land was sold off in plots without imposing a building scheme, it was likely that the developer would seek to retain exclusive power to give or withhold consent to a modification or relaxation of a restriction on building that had been imposed on each purchaser and to do so unfettered by the need to obtain the consent of every subsequent purchaser to whom (after imposing the covenant) it had sold other plots on the development land. If it were otherwise, a situation would arise in which the ability of a purchaser of one plot to enforce covenants against the owner of another depended on the order in which the plots had been sold. In the light of the history of the disintegration of the Trafford eEstate, the court was satisfied that no one was entitled to the benefit of the covenants and that the claimant was entitled to the declaration sought: Crest Nicholson Residential (South) Ltd v McAllister [2004] EWCA Civ 410; [2004] 2 EGLR 79; [2004] 24 EG 150 considered.
Janet Bignell (instructed by Mills & Reeve LLP, of Norwich) appeared for the claimant; the first defendant appeared in person; the second defendant did not appear and was not represented.
Eileen O’Grady, barrister
