Sale of land – Restrictive covenant – Annexation – Claimant lessee seeking declaration that restrictive covenant in conveyance to predecessors unenforceable – Defendants claiming benefit of restrictive covenant by annexation – Whether requirements for annexation satisfied – Claim dismissed
The claimant held a long lease of open land in the centre of Bath on the eastern side of the River Avon, in an area known as Bathwick. It had long been used for the playing of sports, especially rugby football, and was known as “the Rec”. The westernmost part of the land, adjacent to the river, was occupied by a stadium, and leased to the claimant, which used it for the playing of rugby matches.
The claimant had formulated a project to redevelop the stadium so as to provide better facilities, and some commercial outlets. Some people, including the defendants, opposed the project. The 1922 conveyance to the claimant’s predecessors in title contained a restrictive covenant expressed to bind the land conveyed which, if enforceable by anyone, had the potential to interfere with that redevelopment project.
The covenant forbade the erection of “workshops warehouses factories or other buildings for the purpose of any trade or business which may be or grow to be a nuisance and annoyance or disturbance or otherwise prejudicially affect the adjoining premises or the neighbourhood”. It also provided that nothing was to be built or done on the land conveyed “which may be or grow to be a nuisance and annoyance or disturbance or otherwise prejudicially affect the adjoining premises or the neighbourhood”.
The claimant brought a claim under CPR Part 8, for declaratory relief pursuant to section 84(2) of the Law of Property Act 1925 that the restrictive covenant was unenforceable and not binding.
Held: The claim was dismissed.
(1) In a case where the question of enforcement arose between successors in title of the original covenantor and the original covenantee, the benefit of a restrictive covenant might be passed to a person who wished to enforce it by: (i) annexation to the enforcer’s land; (ii) express assignment to the enforcer; or (iii) through a “building scheme” of which the enforcer was entitled to take advantage. The seventh and eighth defendants said that they were entitled to enforce the covenant by annexation. Because the covenant was entered into before 1926, section 78 of the Law of Property Act 1925 did not apply and there could therefore be no automatic annexation by virtue of that section.
(2) Covenants which ran with the land had to be made with a covenantee who had an interest in the land to which they referred and concerned or touched the land. It was a question of intention in each case, to be determined on construction. The land for the benefit of which it was taken had to be clearly identified in the conveyance creating the covenant. Both the intention and the identification of the land had to be gathered from the conveyancing documents themselves, construed in the light of surrounding circumstances. On the other hand, the intention to be found in the documents could be implied rather than express. In covenants made before 1926 it was necessary to show, by construing the instrument in the light of surrounding circumstances, that annexation to the covenantee’s retained land (or some part of it) was intended. Express words of annexation were not required: Rogers v Hosegood [1900] 2 Ch 338, Newton Abbot Co-operative Society Ltd v Williamson & Treadgold Ltd [1952] Ch 286 and Crest Nicholson (South) Ltd v McAlister [2004] 1 WLR 2409 considered.
It was sufficient for the conveyance to describe the land intended to be benefited in terms which enabled it to be identified from other evidence and it was not necessary to show further that the land to be benefited was easily ascertainable. It was therefore necessary to look at the 1922 conveyance itself, judged in the light of the surrounding circumstances, and decide whether it sufficiently identified the land to be benefited by the covenant in such terms. The covenant here was one not to do certain things to the prejudice of the adjoining land or the neighbourhood. In substance that meant that the covenant was for the benefit of the land so described. In this case, the land for the benefit of which the covenant was imposed was sufficiently described in the deed itself: Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 EGLR 113 followed.
If a person came forward claiming that the benefit of the covenant had been annexed to his or her property, the burden would lie on that person to show that that was so. The court was satisfied that the seventh and eighth defendants fell into that category. Given that those defendants had been shown to have sufficient interests in land which in 1922 formed part of the “land of the vendor and his tenants adjoining or near” the Rec, it followed that they, at least, had the benefit of the covenant by annexation.
(3) On the available evidence, there was no reasonable possibility of the benefit of the covenant having passed by assignment. There was no evidence that the covenant had been taken for the benefit of ascertainable land of the covenantee, that any assignment had been made in writing at the time of the transfer of the whole or part of the benefited land, and there was no unbroken chain of assignments linking the first assignee and the present owner: Re Union of London and Smith’s Bank Ltd’s Conveyance [1933] Ch 611 followed.
(4) In the present case, there was no evidence of any intention to create a reciprocal scheme of covenants mutually enforceable between the various owners or purchasers of properties on the estate. The characteristics of a building scheme were not present and any suggestion of a building scheme was quite hopeless: Birdlip v Hunter [2016] EWCA Civ 603; [2016] EGLR 42 considered.
(5) On the materials before the court the covenant was enforceable, by virtue of annexation of the benefit of the covenant, by the seventh and eighth defendants; and it would be enforceable by the same doctrine by others with properties forming part of the Bathwick Estate at the time of the 1922 conveyance and which were adjoining or near to the Rec.
Martin Dray (instructed by Royds Withy King LLP, of Oxford) appeared for the claimant; William Moffett (instructed by Stone King LLP, of Bath) appeared for the seventh and eighth defendants; The first to sixth defendants did not appear and were not represented.
Eileen O’Grady, barrister
Click here to read a transcript of Bath Rugby Ltd v Greenwood and others
