Restrictive covenant – Benefit – Building scheme – Successors in title – Conveyance of properties containing covenant restricting building to one private dwelling-house – Claimant owner wishing to develop land – Claimant applying for declaration that restrictive covenant not affecting their land — Whether defendant owners of adjoining properties entitled to benefit of covenant – Whether properties being part of building scheme – Application granted
The claimants were the freehold owners of a piece of land with a house on it to the south of Centurion Way in Heddon-on-the-Wall, Newcastle upon Tyne, Northumberland. The defendants owned properties on surrounding land. All the properties appeared previously to have been part of a single estate and plots had been sold off over a period of about 20 years. The claimants’ predecessor in title had owned the land subject to a restrictive covenant not to erect any buildings other than one private dwelling-house. In 1978 he had applied unsuccessfully to the Lands Tribunal for the discharge or modification of the covenant to permit development of the property.
The claimants wanted to undertake a development which would involve the construction of at least one further dwelling house on their land. Accordingly, they applied for a declaration pursuant to section 84(2) of the Law of Property Act 1925 that the restrictive covenant no longer affected their land. The defendants applied to strike out the proceedings relying on a concession by the claimants’ predecessor in the earlier proceedings that the restriction had to be treated as a covenant within a building scheme. That application was dismissed.
The claimant contended, amongst other things that, for the defendants to be able to enforce the covenant, its benefit must have been transmitted to them. In order for the covenant to be binding there had to be a building scheme, an annexation of the benefit of the covenant to the land or an assignment of the benefit of the covenant. There was no evidence to suggest that there had been any assignment in this case to transmit the benefit. By the time the application came before the court, the defendants no longer opposed the relief sought.
Held: The application was granted.
(1) The making of a declaration was a judicial act that should be done only if the court was satisfied by the evidence that it was appropriate. The two prerequisites of a building scheme were that the land to which the scheme related had to be identified and there had to be an acceptance by each purchaser of part of the land from the common vendor that the benefit of the covenants would enure to the vendor and those deriving title from him and that he correspondingly would enjoy the benefit of the covenants entered into by other purchasers of part of the land. Reciprocity was the foundation of the idea of a building scheme. A purchaser of one parcel could not be subject to an implied obligation to purchasers of an undefined and unknown area. He had to know the extent of his burden and his benefit. It was not a strict requirement that the necessary evidence should be in the conveyance; it could be found by extrinsic evidence but the court had to be satisfied that the two prerequisites had been satisfied in relation to each parcel of land which would be subject to the building scheme. In the present case, there was no plan which covered the whole scheme. The original conveyance had stated that the covenant was to benefit and protect the vendor’s building estate but there was nothing to indicate the extent of that estate such that it could be said to amount to a building scheme: Birdlip Ltd v Hunter [2016] EWCA Civ 603; [2017] PLSCS 187; [2017] 1 P & CR 1 applied.
(2) Where annexation was relied upon to establish the enforceability of a covenant, the person seeking to enforce the covenant had to show that he was entitled to land which, at the date of the creation of the covenant, belonged to the original covenantee. Annexation only applied in relation to plots of land which had been sold off after the subject plot. Where there had been an annexation, and a person was the first to buy land from a common vendor, then all subsequent purchasers would benefit. In the present case, the claimants’ predecessor had been the penultimate purchaser. It was a requirement of annexation that the land to which the benefit of covenant was annexed was defined so that it was readily ascertainable. In the present case, the land identified as the vendor’s building estate had not been clearly defined and there had been no annexation: Crest Nicholson Residential (South) Ltd v McAllister [2004] EWCA Civ 410; [2004] 2 EGLR 79 followed.
(3) There was no evidence that any express assignment had taken place.
James McCreath (instructed by IBB Solicitors, of Middlesex) appeared for the claimants; The defendants did not appear and were not represented.
Eileen O’Grady, barrister
