Restrictive covenant – Discharge or modification – Building scheme – Small estate of nine detached dwellings constructed and sold by same builder around same time – Restrictive covenants imposed in each conveyance for benefit of remainder of estate – Applicant seeking discharge or modification of covenant to build additional building – Other residents objecting – Whether all objectors entitled to enforce covenant or only those whose properties sold by builder subsequent to applicant’s property – Preliminary issue determined in favour of objectors
The applicant was the freeholder of a detached residential property that formed part of a development of nine such properties. The properties had been built between 1957 and 1958 in a similar architectural style and fronted an access road, known as One Tree Lane. The applicant obtained outline planning permission to demolish her property and to erect three dwellings on the land. However, such a scheme was prohibited by a restrictive covenant contained in a 1957 conveyance from the builder of the development to the applicant’s predecessor in title and expressed to benefit “the remainder of the Vendor’s One Tree Meadow Estate… or any part or parts thereof”. A similar covenant had been included in the conveyances of all the properties in the development.
The applicant applied to the Lands Tribunal, under section 84 of the Law of Property Act 1925, to discharge or modify the covenant. Some of her neighbours objected to the application. A preliminary issue was determined as to which objectors were entitled to enforce the restrictive covenant. It was accepted that those whose properties had been sold by the builder subsequent to the 1957 conveyance had the right to do so, since those properties had, at the time of that conveyance, formed part of the builder’s retained land. In respect of the properties that had been sold earlier, the objectors contended that they were none the less entitled to the benefit of the covenant because a building scheme existed under which the restrictive covenants in each conveyance were mutually enforceable by each of the owners against any of the others.
No evidence was available from the builder, the original purchasers or the original solicitors or estate agents that had dealt with the sales of the properties in 1957 and 1958. In support of their contention that a building scheme had been intended, the objectors instead relied, inter alia, on the fact that the development was small and that each property had been sold at around the same time.
Decision: The preliminary issue was determined in favour of the objectors.
The requirements for finding that a building scheme existed were met in the instant case. First, there was a common vendor from which the owners of the relevant properties derived title. Second, that common vendor had, prior to selling any of the plots, laid out the estate to show the access road and nine separate plots, each containing a single dwelling. The conveyances to the purchasers had referred to earlier documents that contained those plans and the vendor had prepared a standard form of conveyance for selling each plot and had clearly intended to impose the same restrictive covenants on every plot. Third, those restrictions had been intended by the common vendor to benefit all the plots that were to be sold. Such a finding did not flow from the mere fact that a common vendor had sold pieces of land subject to common covenants, but was justified in the light of additional matters, including: (i) the fact that the estate was small and had been constructed by the building company within a short time-frame with sales following soon thereafter, such that it must have been obvious to any prospective purchaser who visited the site that a development of nine plots was intended in accordance with a lotted plan; (ii) the absence of any intention on the part of the builder to retain any property on the estate; (iii) the nature of the restrictive covenants, which were in identical terms and were plainly intended to benefit the other plots on the estate rather than the builder or any land retained by it; and (iv) the identical terms of the conveyances of the plots. The fourth requirement, that the purchasers of the plots had purchased from the common vendor on the footing that the restrictions were to enure for the benefit of the other lots included in the general scheme, could readily be inferred where the first three requirements were met. Moreover, evidence showed that the original purchasers of the nine plots had been aware of the reciprocal nature of the obligations contained in the covenants: Elliston v Reacher [1908] 2 Ch 374 applied; Re Dolphin’s Conveyance [1970] Ch 654 considered. Consequently, a building scheme had been created and the objectors were entitled to the benefit of the restrictive covenants given by the applicant’s predecessor in title in respect of that property.
Stephanie Tozer (instructed by Burges Salmon, of Bristol) appeared for the applicant; Thomas Grant (instructed by Eversheds LLP, of Manchester) appeared for the objectors.
Sally Dobson, barrister
