Sale of land – Restrictive covenant – Annexation – Appellant lessee seeking declaration that restrictive covenant in conveyance to predecessors unenforceable – Respondents claiming benefit of restrictive covenant by annexation – High Court dismissing claim – Appellant appealing – Whether conveyance identifying land intended to be benefited clearly or at all – Appeal allowed
The appellant held a long lease of open land in the centre of Bath, in an area known as Bathwick. It had long been used for the playing of sports, and was known as “the Rec”. The western part of the land was occupied by a stadium, and leased to the appellant, which used it for rugby matches.
The appellant had formulated a project to redevelop the stadium to provide better facilities and some commercial outlets. Some people, including the respondents, opposed the project. The 1922 conveyance to the appellant’s predecessors in title contained a restrictive covenant in clause 2 expressed to bind the land conveyed which, if enforceable by anyone, had the potential to interfere with that redevelopment project.
The covenant 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 appellant 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. The High Court dismissed the claim: [2020] EWHC 2662 (Ch); [2020] PLSCS 185.
The appellant appealed. An issue arose, amongst other things, whether the 1922 conveyance sufficiently identified the land intended to be benefited.
Held: The appeal was allowed.
(1) A purchaser from the original covenantee of land retained by him when he executed the conveyance containing the covenant would be entitled to the benefit of the covenant if the conveyance showed that it was intended to enure for the benefit of that particular land. It was not enough to demonstrate an intention to benefit land; in order to annex the benefit of a restrictive covenant to land, so that it ran with the land without express assignment on a subsequent assignment of the land, the land for the benefit of which it was taken had to be clearly identified in the conveyance creating the covenant: Newton Abbott Co-operative Society Ltd v Williamson & Treadgold Ltd [1952] Ch 286 considered.
The relevant conveyance could be construed in the light of surrounding circumstances and, like any other instrument, its interpretation could depend not only on its express terms but on any necessary implication; but the exercise remained one of interpreting the document, not of inferring intentions from surrounding circumstances alone. It was necessary to find conceptual certainty in the conveyance rather than a complete identification of the precise parcels of land benefited: Shropshire County Council v Edwards [1982] 46 P&CR 270, J Sainsbury plc v Enfield London Borough Council [1989] 2 EGLR 173 and Crest Nicholson Residential (South) Ltd v McAllister [2004] 2 EGLR 79 considered.
(2) The question was whether the 1922 conveyance, either expressly or by necessary implication, contained a sufficient indication of the lands intended to be benefited by the covenant in clause 2 as to meet this requirement for conceptual certainty. The judge below found that the covenant was in substance for the benefit of the adjoining land or neighbourhood. He interpreted that as meaning the same thing as the phrase in clause 1 where the dominant tenements of the easements reserved under the Rec were “the other buildings and land of the vendor and his tenants adjoining or near to” the Rec.
The judge erred in those conclusions. In a general sense, the covenant was taken for the benefit of the land described. But it was not enough to see that the vendor owned adjoining property and that the covenant was plainly inserted with a view to benefiting the vendor accordingly; what was needed was an intention that the covenant was taken for the protection of defined lands of the vendor so that it went with the land to successive owners, rather than being kept in the hands of the vendor for him to exploit.
(3) Here, the covenant was against causing a nuisance or annoyance to the neighbourhood. “Neighbourhood” was an inherently imprecise term, but that did not matter where it was being used to refer to a breach, as the very nature of nuisance meant that the impact of a nuisance would vary from case to case. Some nuisances only affected the immediately adjoining property, such as nuisance by encroachment of tree roots, but others, such as nuisance by noise or smells, affected a wider but necessarily imprecise area. The concept of a neighbourhood was therefore a perfectly adequate and understandable concept to use for the purpose of describing a breach of covenant by causing a nuisance or annoyance. But it was not a conveyancing expression. “Neighbourhood” did not refer to any particular properties but to the local area. It was a singularly inapt expression to use to identify properties to which the benefit of a covenant was intended to be annexed.
(4) Confining the benefit of the covenant in clause 2 to the same properties as were referred to in clause 1 would have an odd consequence: one would expect properties that enjoyed, or that might in the future enjoy, easements of drainage under the Rec to be those in the fairly immediate vicinity, but one might have thought that a covenant against building a factory or committing a nuisance to the neighbourhood would be intended to be for the protection (in the general sense) of a much wider area.
It was asking too much of the words in clause 2 to make them do the work of not only identifying the scope of the covenant but also of identifying, at the level of conceptual certainty, the lands of the vendor to which the benefit of the covenant was intended to be annexed. But unless they could do that, there was no other basis for finding that the 1922 conveyance sufficiently identified such land as to enable a conclusion to be reached that there had been an annexation. In the absence of anyone able to enforce the covenant, it was not binding on the appellant.
Tom Weekes QC (instructed by Royds Withy King LLP of Oxford) appeared for the first appellant; Martin Hutchings QC and Harriet Holmes (instructed by Clarke Willmott LLP) appeared for the second appellant intervener; William Moffett (instructed by Stone King LLP) appeared for the respondents.
Eileen O’Grady, barrister
Click here to read a transcript of Bath Rugby Ltd v Greenwood and others
