Restrictive covenants — Benefit of covenants not passed by chain of express assignments — No privity of contract or estate — Whether enforceable under a scheme of development — Whether acquiescence in past breaches prevents injunction
The conveyances of plots in the Wilderness Estate near Sevenoaks, Kent, contain covenants not to build more than one house per plot or per acre. The plaintiffs are some of the owners of houses built on these plots over the years and sought an injunction to restrain the defendant builder from building on a plot on the estate in breach of these covenants. The plaintiffs could not enforce the covenants in law as they had neither a privity of contract not a privity of estate relationship with the defendant. They could not show a chain of express assignments of the benefit of the covenants from the original covenantee purchasers of their respective plots.
The plaintiffs sought to show that the requirements of a “scheme of development” were present and that accordingly they were entitled to enforce the covenants in equity under the authority of Elliston v Reacher [1908] 2 Ch 665 (affirming [1908] 2 Ch 374). It was part of the defendant’s case that because past breaches of the covenants had not been enforced, the plaintiffs had acquiesced in those breaches and that barred any right to an injunction.
Held The authority on the enforcement of restrictive covenants in equity under what is variously called a “scheme”, “building scheme” or “scheme of development” is Elliston v Reacher. But the essentials of a “scheme” were spelt out in Reid v Bickerstaff[1909] 2 Ch 305. There must be a defined area within which the scheme is operative; reciprocity of burdens and benefits must be present; although the obligations imposed within the area must be defined, they need not be identical; and the various purchasers must have notice of what has been called a “local law” imposed by the vendors upon a definite area. In the present case these essentials were present: there was a defined area, and although the covenants as worded were capable of benefiting land outside the defined area, that was immaterial. The fact that under the wording of the covenants each purchaser had covenanted for the benefit of the vendor and the unsold plots was not decisive as to the covenants not benefiting the plots already sold. The fact that the vendor could exempt some plots did not mean that there was no “local law”. It followed that the scheme was intended to be mutually enforceable and the plaintiffs were entitled to the benefit of the covenants.
In the alternative, Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594 was binding, and a covenant for the benefit of the whole estate was annexed to benefit each part by virtue of section 78 of the Law of Property Act 1925. On the question of a possible acquiescence in past breaches of the covenants, the test in Chatsworth Estates Co v Fewell [1931] 1 Ch 224 was whether the plaintiffs had represented that the covenants were no longer to be enforced; the evidence in the present case was that apart from two instances the covenants had been enforced for 20 years; that was not acquiescence and the plaintiffs were entitled to an injunction.
W A Blackburne QC and John Nicholls (instructed by Knocker & Foskett, of Sevenoaks) appeared for the plaintiffs; and Geoffrey Jaques (instructed by The Buss Murton Partnership, of Tunbridge Wells) appeared for the defendant.
