Law of Property Act 1925, section 84(2) — Restrictive covenants — Application for declaration that land was no longer subject to covenants — 19th-century conveyance containing covenants by purchasers preventing the building of houses of less than £35 per annum rental value, the carrying on of any trade or business, use as hospital, and other restrictions — The question was whether the benefit of the covenants given by the purchasers in the 1894 conveyance was annexed to the land then retained by the vendor so as to pass with that land on subsequent dispositions thereof — The land retained in 1894 had been developed, but the land then conveyed had not — The conveyance did not contain an annexation to the retained land in express terms
be established was an intention that the covenants should enure for the benefit
of the retained land — The issues, as defined by the judge, were (1) from what
facts or by what documents may such an intention be inferred or expressed? (2) was the requisite intention from such
sources manifested? and (3) irrespective
of intention, was the benefit of the covenants annexed to the retained land
simply by virtue of section 58 of the Conveyancing and Law of Property Act
1881? — (The 1881 Act was in force at
the material time, having come into operation on December 31 1881; section 58
was replaced, but with significant differences, by section 78 of the Law of
Property Act 1925)
examining the authorities, Morritt J accepted the strict view put forward by
the plaintiffs (the registered proprietor and the potential purchasers of the
subject land) that the requisite intention must be manifested in the conveyance
when construed in the light of the surrounding circumstances — Viewed in this
light, the 1894 conveyance did not, on its true construction, annex the benefit
of the purchasers’ covenants to the retained land — There were no words in the
conveyance indicating any such intention and the surrounding circumstances did
not necessitate any implication
remained the last issue, whether the benefit of the covenants was annexed to
the retained land by the force of section 58 of the Conveyancing and Law of
Property Act 1881 without regard to any question of intention — The defendants
(representing the persons who were successors in title to the retained land)
sought to rely on the decision in Federated Homes Ltd v Mill Lodge Properties Ltd,
where the Court of Appeal in 1979 held that the absence of any express words of
annexation was made good by section 78 of the Law of Property Act 1925 — This
was a decision which broke new ground, but Brightman LJ in his judgment drew
attention to important differences between that section and section 58 of the
1881 Act — Morritt J concluded that the principle of the Federated Homes case
could not be applied to section 58 — All that section did was to deem words to
be included which, both before and after the enactment of section 58, had, with
the exception of the old case of Mann v Stephens, been consistently held to be insufficient
without more to effect annexation of the benefit of a covenant
was that there were now no persons entitled to the benefit of the purchasers’
covenants contained in the 1894 conveyance — Declaration accordingly
The following
cases are referred to in this report.
Federated Homes Ltd v Mill Lodge Properties Ltd
[1980] 1 WLR 594; [1980] 1 All ER 371; (1979) 39 P&CR 576; [1980] EGD
841; 254 EG 39, [1980] 1 EGLR 113, CA
Forster v Elvet Colliery Co Ltd [1908] 1
KB 629
Ives v Brown [1919] 2 Ch 314
Kumar v Dunning [1987] 3 WLR 1167;
[1987] 2 All ER 801; [1987] 2 EGLR 39; (1987) 283 EG 59, CA
Mann v Stephens (1846) 15 Sim 377
Marten v Flight Refuelling Ltd [1962] Ch
115; [1961] 2 WLR 1018; [1961] 2 All ER 696; (1961) 13 P&CR 389
Newton Abbot Co-operative Society Ltd v Williamson &
Treadgold Ltd [1952] Ch 286; [1952] 1 TLR 284; [1952] 1 All ER 279
Reid v Bickerstaff [1909] 2 Ch 305
Renals v Cowlishaw (1878) 9 ChD 125
Rogers v Hosegood [1900] 2 Ch 388
Shropshire County Council v Edwards (1983) 46 P
& CR 270
Union of London & Smith’s Bank Ltd’s
Conveyance, Re: Miles v
Easter [1933] Ch 611
Zetland (Marquess of) v Driver [1939] Ch 1;
[1938] 2 All ER 158; (1938) 54 TLR 594, CA
This was an
originating summons by which the plaintiffs, J Sainsbury plc and the London
Borough of Haringey, sought a declaration, pursuant to section 84(2) of the Law
of Property Act 1925, that certain freehold land at Winchmore Hill in the
London Borough of Enfield was no longer subject to restrictive covenants
contained in a conveyance of April 5 1894. The defendants were the London
Borough of Enfield, appointed by an order of the court to represent all persons
being successors in title to the retained land.
Gavin Lightman
QC and Miss Elizabeth Jones (instructed by Denton Hall Burgin & Warrens)
appeared on behalf of the plaintiffs; Anthony Scrivener QC and Geoffrey
Stephenson (instructed by the solicitor to the London Borough of Enfield)
represented the defendants.
Giving
judgment, MORRITT J said: By this originating summons the plaintiffs seek a
declaration pursuant to section 84(2) of the Law of Property Act 1925 that
certain freehold land at Winchmore Hill in the London Borough of Enfield is no
longer subject to restrictive covenants contained in a conveyance of April 5
1894.
The land in
question was formerly part of the Highfield House Estate and is now registered
in Her Majesty’s Land Registry under title no MX 70079. The second plaintiff,
the London Borough of Haringey, is the registered proprietor and has contracted
to sell the land to the first plaintiff, J Sainsbury plc, subject (inter
alia) to the condition that a declaration, as sought by this originating
summons, is made.
By the
conveyance of April 5 1894 the purchasers of the land entered into certain
covenants with the vendor, Alfred Walker, jun. The question for determination
is whether the benefit of those covenants was annexed to certain land retained
by the vendor so as to
on July 29 1988 the defendant, the London Borough of Enfield, was appointed to
represent all persons being successors in title of Alfred Walker, jun to that
retained land.
The Highfield
House Estate was bought by Alfred Walker, sen on May 30 1881. The boundaries of
the estate were Hoppers Road to the west, Compton Road to the north and Green
Lanes to the east. Apart from Highfield House itself, the estate was
undeveloped. By his will dated November 10 1881 Alfred Walker, sen appointed
his son, Alfred Walker, jun, and Henry Brown to be his executors, and after
bequeathing certain legacies left all his real and personal estate to his son
Alfred Walker, jun. Alfred Walker, sen died on July 19 1882 and probate of his
will was granted to Alfred Walker, jun and Henry Brown on September 4 1882.
Alfred Walker,
sen never lived at Highfield House nor did his son.
On October 20
1882 Alfred Walker, jun contracted to sell the whole estate to G & N
Hempsted for a price payable by instalments. G & N Hempsted assigned their
interest in the contract to North London Freehold Land & House Co Ltd.
For some
reason not apparent from the evidence, on January 28 1883 Alfred Walker, jun
and G & N Hempsted conveyed Highfield House, but not the rest of the
estate, to Peregrine Purvis as nominee subject to the terms of the contract.
In November
1883 the Hempsteds went bankrupt and North London Freehold Land & House Co
Ltd went into liquidation. On October 27 1889 Alfred Walker, jun duly
determined the contract for sale. On March 9 1894 Alfred Walker, jun sold a
small plot of land adjacent to the Congregational Chapel, and on April 4 1894
Peregrine Purvis reconveyed Highfield House to Alfred Walker, jun.
The conveyance
in question was executed on April 5 1894. It was made between Alfred Walker,
jun of the first part, Alfred Walker, jun and Henry Brown, described as a
builder, of the second part, and S West, A M Bowlby and T W Shore, called the
purchasers of the third part. In the margin of the conveyance is a plan which
shows, coloured green, the part of the Highfield Estate being thereby conveyed.
That part is a square on the south-east corner of the estate. The eastern
boundary is Green Lanes. The western boundary is described as ‘proposed road’
and the surrounding land to the west and the north is described as ‘other land
belonging to Alfred Walker Esq’.
The conveyance
recites the purchase of the estate by Alfred Walker, sen, his will, death, the
grant of probate and the progress with the administration of his estate. It
then recites:
And whereas the said Alfred Walker Junior
had agreed with the purchasers for the sale to them of the hereditaments
hereinafter described and the inheritance thereof in fee simple free from
encumbrances but subject to the conditions and stipulations as to user thereof
hereinafter contained at the price of £4,200.
The operative part provides:
The said Alfred Walker and Henry Brown as
trustees do hereby release and the said Alfred Walker as beneficial owner
hereby conveys unto the purchasers all that piece of ground part of the
Highfield House Estate situate on the west side of Green Lanes at Winchmore
Hill in the parish of Edmonton in the County of Middlesex containing 10 acres
and with the measurements and boundaries thereof more particularly described in
the plan drawn in the margin of these presents and thereon coloured green to
hold the same subject to the conditions and stipulations as to user thereof
hereinafter contained unto and to the use of the purchasers in fee simple.
Thereafter,
Alfred Walker, jun acknowledged the right of the purchasers to production of
the documents specified in the schedule and covenanted with the purchasers to
redeem the tithe rentcharge and in the meantime to indemnify the purchasers.
There was then a covenant in the following terms:
And the said Alfred Walker, so as to bind
the owners for the time being of that portion of the said Highfield House
Estate not hereby conveyed and shown on the said plan and thereon marked ‘other
land belonging to Alfred Walker Esq.’, does hereby covenant with the purchasers
that he the said Alfred Walker or his successors in title shall not, so long as
the land hereby conveyed is used as a recreation ground and not for building
purposes make or permit to be made on or over any portion of the strip of land
coloured yellow on the said plan (being a strip of land 1 foot wide along the
western boundary of the land hereby conveyed) any road or footway whatsoever
and shall not at any time make any road or footway within one
— and then a word appears which is
illegible —
the land hereby conveyed.
This is the
only reference in the conveyance, apart from the operative part itself, to the
‘other land belonging to Alfred Walker Esq’ shown on the plan. There followed
two provisos enabling the purchasers to acquire the strip of land referred to,
the only relevance of which is that they contain two references to Alfred
Walker or his successors in title.
The covenants
with which I am directly concerned are in the following terms:
And the purchasers so as to bind
themselves and their successors in title whilst the land hereby conveyed shall
remained vested in them and to the intent to bind all future owners thereof but
not so as to incur any personal liability after they shall have parted with the
land hereby conveyed do hereby covenant with the said Alfred Walker that in the
event of the land hereby conveyed being at any time used for building purposes
no building shall be erected hereon other than houses each of a net rental
value of not less than £35 per annum and to be used as private dwelling houses
only and that no trade business or manufacture of any kind shall at any time be
carried on upon any part of the land hereby conveyed and particularly that no
part of the land hereby conveyed shall at any time be used as a hospital
infirmary sanitorium or place for the care or treatment of persons inflicted
with infectious or non-infectious diseases or of unsound mind but the fact that
charges may be made for admission to the land hereby conveyed for the purpose
of witnessing or taking part in cricket matches athletics sports or other
entertainments of a like character shall not be deemed to be the carrying on of
a business within the meaning of this covenant And that the purchaser shall not
dig clay for or make or burn bricks on the land hereby conveyed or do or permit
to be done anything thereon which may be or become a nuisance annoyance or
disturbance to the occupiers of neighbouring or adjacent premises but the use of
burnt clay in the construction of tennis courts running paths or a recreation
ground shall not be deemed to be a breach of this covenant And also that the
purchasers shall erect and maintain suitable fences on the boundaries of the
land shown by red lines and marked (T) on the said plan for enclosing the land
hereby conveyed such fences not to exceed 6 ft 6 in in height And further that
no buildings or erection shall be placed nearer than 15 feet to the line of the
proposed road A-B shown on the said plan.
Thereafter,
Alfred Walker, jun sold six further parts of the Highfield House Estate prior
to his death on March 23 1898. The remainder of the estate was sold by his
executors after his death.
The land
retained in 1894 has now been developed, but the land then conveyed has not
been. It is not alleged that there was a building scheme or that there was any
assignment of the benefit of the covenants. The only question is whether the
benefit of the covenants given by the purchasers in the conveyance dated April
5 1894 was annexed to the land then retained by Alfred Walker, jun so as to
pass with that land on the subsequent disposition thereof. The defendant did
not contend before me that the benefit of the covenants passed on subsequent
sales under section 6 of the Conveyancing and Law of Property Act 1881 because
of the decision in Kumar v Dunning [1987] 3 WLR 1167. The
plaintiffs did not contend before me that if the benefit of the purchasers’
covenants was annexed to the retained land of Alfred Walker, jun it was annexed
only to the whole of it and not to each and every part thereof because of the
decision in Federated Homes Ltd v Mill Lodge Properties Ltd [1980]
1 WLR 594. However, both points were reserved for argument on any appeal.
The
purchasers’ covenants related to land of inheritance and consequently, pursuant
to section 58(1) of the Conveyancing and Law of Property Act 1881, are ‘deemed
to be made with the covenantee, his heirs and assigns and shall have effect as
if heirs and assigns were expressed’.
Thus the
material part of the conveyance reads as follows:
The purchasers, so as to bind themselves
and their successors in title, whilst the land hereby conveyed shall remain
vested in them and to the intent to bind all future owners thereof but not so
as to incur any personal liability after they shall have parted with the land
hereby conveyed, do hereby covenant with the said Alfred Walker, his heirs and
assigns, that . . .
As I have
already recorded, it is not contended that in this case there was a building
scheme or that the benefit of the purchasers’ covenants was expressly assigned
on the subsequent sales of the retained land. It is common ground that the
retained land was capable of being benefited by the covenants and was
sufficiently identified so as to enable annexation of the benefit of the
covenants if annexation was intended. The requisite intention is that the
covenants should enure for the benefit of the retained land: compare Miles v
Easter [1933] Ch 611 at p 628.
The issues
between the parties are:
1 From what facts or by what documents may such
intention be inferred or expressed?
2 Is the requisite intention manifested by such
facts or documents as may be considered?
3 Irrespective of intention, was the benefit of
the covenants annexed to the retained land by virtue of section 58 of the
Conveyancing and Law of Property Act 1881?
I will deal with the issues in that
order.
On the first
issue the plaintiffs contend that the intention must be manifested in the
conveyance in which the covenant was contained when construed in the light of
the surrounding circumstances, including any necessary implication in the
conveyance from those surrounding circumstances. The defendants claim that such
intention may be inferred from surrounding circumstances which fall short of
those which would necessitate an implication in the conveyance itself.
The defendants
rely on the points that the land intended to be benefited may be ascertained
from surrounding circumstances alone (see Marten v Flight Refuelling
Ltd [1962] Ch 115) and that in some reported cases the possibility of
inferring the relevant intention wholly from the surrounding circumstances is
envisaged.
Thus, in Renals
v Cowlishaw (1878) 9 Ch D 125 at p 129, Hall V-C stated:
A purchaser may also be entitled to the
benefit of a restrictive covenant entered into with his vendor by another or
others where his vendor has contracted with him that he shall be the assign of
it, that is, have the benefit of the covenant. And such covenant need not be
express, but may be collected from the transaction of sale and purchase. In
considering this, the expressed or otherwise apparent purpose or object of the
covenant, in reference to its being intended to be annexed to other property,
or to its being only obtained to enable the covenantee more advantageously to
deal with his property, is important to be attended to.
However, the reference to the ‘otherwise
apparent purpose or object of the covenant’ is equally consistent with the
plaintiffs’ submissions.
Similarly, in Rogers
v Hosegood [1900] 2 Ch 388 at p 407, the Court of Appeal stated:
When, as in Renals v Cowlishaw,
there is no indication in the original conveyance, or in the circumstances
attending it, that the burden of the restrictive covenant is imposed for the
benefit of the land reserved, or any particular part of it, then it becomes
necessary to examine the circumstances under which any part of the land
reserved is sold, in order to see whether a benefit, not originally annexed to
it, has become annexed to it on the sale, so that the purchaser is deemed to
have bought it with the land, and this can hardly be the case when the purchaser
did not know of the existence of the restrictive covenant.
Again, this statement appears to me to be
equally consistent with the plaintiffs’ approach.
However, the
other authorities to which I have been referred show, in my judgment, that the
plaintiffs’ submission is correct.
Thus, in Reid
v Bickerstaff [1909] 2 Ch 305 the Master of the Rolls stated, at p
320:
It is irrelevant to urge that the
performance of the covenants would be greatly for the benefit of the adjoining
land. The benefit of a covenant capable of being annexed to land, but not
expressed to be so annexed, either by the deed containing the covenant or by
some subsequent instrument executed by the covenantee, does not pass as an
incident of land on a subsequent conveyance. Renals v Cowlishaw
and Rogers v Hosegood seem to me to bear out what I have said.
In Miles v
Easter [1933] Ch D 611 at p 628, in the passage to which I have already
referred, the Court of Appeal stated that the intention must be shown in the
conveyance itself. There is a similar statement by the Court of Appeal in Zetland
v Driver [1939] Ch 1 at p 8.
In Newton
Abbot Co-operative Society Ltd v Williamson & Treadgold Ltd [1952]
Ch 286 at p 289, Upjohn J (as he then was) stated:
In this difficult branch of the law one
thing in my judgment is clear, namely, that in order to annex the benefit of a
restrictive covenant to land, so that it runs with the land without express
assignment on a subsequent assignment of the land, the land for the benefit of
which it is taken must be clearly identified in the conveyance creating the
covenant.
When contrasted with the passage in his
judgment at pp 294 to 297 it is plain that he considered that the intention to
benefit the retained land must be apparent from the conveyance.
Finally, in Shropshire
County Council v Edwards (1982) 46 P&CR 270, Judge Rubins,
sitting as a deputy High Court judge, concluded at p 277:
But it is not necessary, though highly
desirable, that express words should be used to annex the benefit of a covenant
to the land with which it is to run. If on the construction of the instrument
creating the restrictive covenant both the land that is intended to be
benefited and the intention to benefit that land, as distinct from benefiting
the covenantee personally, can be clearly established, then the benefit of the
covenant will be annexed to that land and run with it notwithstanding the
absence of express words of annexation.
In these
circumstances, in my judgment, I have to construe the conveyance of April 5
1894 in the light of the relevant circumstances to see whether the purchasers’
covenants were given for the benefit of the retained land. I turn therefore to
the second issue.
It seems plain
that Alfred Walker, jun never intended to retain the Highfield House Estate for
his own use and enjoyment. Within weeks of obtaining probate of his father’s
will he had entered into the contract to sell the entire estate to the
Hempsteds. He recovered possession on the determination of that contract in
October 1887. Two years after the conveyance of 1894 he was selling other parts
of the estate and parts unsold at his death were sold shortly thereafter by his
executors. It seems reasonable to infer that by 1894 Alfred Walker, jun
intended to sell off the estate as and when opportunity occurred. However, this
does not, in my judgment, necessarily give rise to an inference that the
benefit of the purchasers’ covenant was intended to be annexed to the retained
land. An estate owner might equally well intend the benefit of the covenants to
remain with him, so that he might exploit them in due course either by express
assignment to particular purchasers, or by exacting further payments from the
owners of the land bound by them as the price for their release wholly or
partially.
There is no
indication in the covenant itself that it was made with Alfred Walker, jun in
his capacity as owner of the retained land. Indeed, other parts of the
conveyance indicate the contrary. Thus in the covenant by Alfred Walker, jun
there is express reference to the other land belonging to him as shown on the
plan. In that covenant and the provisos which followed it express reference is
made to the successors in title of Alfred Walker, jun to that land.
If it had been
intended to annex the benefit of the purchasers’ covenants to the retained land
it is remarkable that there is no reference to the retained land or to Alfred
Walker, jun’s successors in title in that covenant.
Moreover, the
reference to Alfred Walker, jun’s heirs and assigns deemed to be incorporated
by section 58 of the Conveyancing and Law of Property Act 1881 is not, as such,
sufficient to give rise to any annexation. Thus in Renals v Cowlishaw
(1878) 9 Ch D 125 the covenant was with the covenantees ‘their heirs,
executors, administrators and assigns’. But the reference to ‘assigns’ was not
sufficient to effect annexation. Likewise in Reid v Bickerstaff [1909]
2 Ch 305 the covenant in favour of the covenantees ‘their heirs and assigns’
did not effect any annexation. Nor in Ives v Brown [1919] 2 Ch
314 was the benefit of a covenant with the covenantee ‘his heirs and assigns’
thereby annexed to the land. Miles v Easter [1933] Ch 611 is to
the same effect. The only authority to the contrary is Mann v Stephens
(1846) 15 Sim 377, where the covenant was with ‘B his heir and assigns’,
but in that case the only point argued was whether a successor in title of the
covenantor was liable on the covenant. It was not argued that the successor in
title to the land of the original covenantee was not entitled to the benefit.
Accordingly,
in my judgment, the conveyance of 1894 did not, on its true construction, annex
the benefit of the purchasers’ covenants to the retained land. There are no
words in the conveyance indicating any such intention, nor do the surrounding
circumstances necessitate any implication. Accordingly, I pass to the third
issue.
In Federated
Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594 the Court of
Appeal decided that in the case of a covenant relating to land of the
covenantee in the sense that it touched and concerned that land the effect of
section 78 of the Law of Property Act 1925 was to cause the benefit of the
covenant to run with that land and be annexed to it. Section 78 of the Law of
Property Act provides as follows:
(1) A covenant relating to any land of the
covenantee shall be deemed to be made with the covenantee and his successors in
title and the persons deriving title under him or them, and shall have effect
as if such successors and other persons were expressed.
For the
purposes of this subsection in connection with covenants restrictive of the
user of land ‘successors in title’ shall be deemed to include the owners and
occupiers for the time being of the land of the covenantee intended to be
benefited.
(2) This section applies to covenants made after
the commencement of this Act, but the repeal of section fifty-eight of the
Conveyancing Act 1881 does not affect the operation of covenants to which that
section applied.
In his
judgment in Federated Homes Ltd v Mill Lodge Properties Ltd
[1980] 1 WLR 594 at p 604, Brightman LJ (as he then was) stated:
The first point to notice about section
78(1) is that the wording is significantly different from the wording of its
predecessor section 58(1) of the Conveyancing Act 1881. The distinction is
underlined by section 78(2), which applies section 78(1) only to covenants made
after commencement of the Act. Section 58(1) of the Act of 1881 did not include
the covenantee’s successors in title or persons deriving title under him or
them or the owners or occupiers for the time being of the land that the
covenantee intended to be benefited. The section was confined, in relation to
realty, to the covenantee, his heirs and assigns, words which suggest a more
limited scope of operation than is found in section 78. If, as the language of
section 78 implies, a covenant relating to land which is restrictive of the
user thereof is enforceable at the suit of (1) a successor in title of the
covenantee, (2) a person deriving title under the covenantee or under his
successors in title, and (3) the owner or occupier of the land intended to be
benefited by the covenant, it must, in my view, follow that the covenant runs
with the land, because ex hypothesi every successor in title to the land, every
derivative proprietor of the land and every other owner and occupier has a
right by statute to the covenant. In other words, if the condition precedent of
section 78 is satisfied — that is to say — there exists a covenant which
touches and concerns the land of the covenantee — that covenant runs with the
land for the benefit of his successors in title, persons deriving title under
him or them and other owners and occupiers.
The defendants
seek to argue from this decision, and notwithstanding the reasoning expressed
in it, that section 58 of the Conveyancing and Law of Property Act 1881 had the
same effect. The same point was taken in Shropshire County Council v Edwards
(1982) 46 P&CR 270 but was not decided.
In Renals
v Cowlishaw (1878) 9 Ch D 125 and Reid v Bickerstaff
[1909] 2 Ch 305, the covenants to which I have referred were entered into
before section 58 of the Conveyancing and Law of Property Act 1881 came into
force on December 31 1881. Thus, this point was not of relevance in those
cases. But in view of the date of the decision in Renals v Cowlishaw
it would be very surprising if by enacting that ‘a covenant . . . shall be
deemed to be made with the covenantee his heirs and assigns and shall have
effect as if heirs and assigns were expressed’ Parliament intended to effect
annexation when the Court of Appeal had already decided that such words if
expressed did not suffice.
Between the
1881 Act and the Law of Property Act 1925 the covenants in Ives v Brown
[1919] 2 Ch 314 and Miles v Easter [1933] Ch 611 were entered
into. But section 58 of the 1881 Act was not referred to in either case.
In Forster
v Elvet Colliery Co Ltd [1908] 1 KB 629 the Court of Appeal did refer to
section 58 of the 1881 Act. The case was not concerned with annexation of the
benefit of covenants relating to freehold land. The references are at p 635,
where the Master of the Rolls said:
The word ‘lessee’ is by the definition at
the beginning of the lease to include also ‘his executors, administrators and
assigns, unless such construction be excluded by the sense or the context’. And
by section 58 of the Conveyancing Act 1881, words of limitation are to be read
into the covenant, assuming it to be a covenant ‘relating to land’. Now, under
the old law, it is settled that the owner of the surface, not being mentioned
as a party to the deed, could not have sued on the covenant.
At p 637 Fletcher Moulton LJ said:
It is true that none of the plaintiffs in
these actions were either owners or occupiers of any portion of these superjacent
lands at the date of the lease. But the plaintiffs are successors in title of
the then owners of portions of such lands by reason of being their assignees,
and they urge that section 58 subsection (1) of the Conveyancing and Law of
Property Act 1881 applies to such a covenant as we have in this case, and that
it must accordingly be deemed to have been made with the covenantee, his heirs
and assigns. In other words, they say that, although the intention of the
parties may have been to make a separate and direct covenant with each future
owner, the fact that such a covenant would not be effectual does not prevent
the present plaintiffs from claiming under the covenant made with their
predecessors in title, who were owners of the lands at the date of the lease,
and with whom, therefore, the lessee could and did effectually covenant.
And at p 641 Farwell LJ said:
In the present case the lessors of the
minerals and the owners of the surface are different persons. In my opinion,
therefore, the owners for the time being mean, primarily at any rate, the
owners at the date of the deed; and by section 58 sub-section (1) of the
Conveyancing and Law of Property Act 1881, the covenant is made with them,
their heirs and assigns. If any other owner not claiming as owner at that date,
or as heir or assign of such owner, were to sue, the dictum of Sir George
Jessel would apply to him. Some difficulty is created by the addition of the
words ‘occupier or occupiers’; this is used in contradistinction to owner, and
the Conveyancing and Law of Property Act 1881 would therefore read into the
covenant ‘his or their executors, administrators or assigns’ instead of heirs
and assigns. Such a covenant could not run with the land, but I do not think
this can affect the right of the owners, as it has not been suggested that the
covenants are with owners and occupiers jointly.
On the subsequent appeal to the House of
Lords no reference was made to section 58 of the 1881 Act.
The Law of
Property Act 1922 was an amendment Act. By section 96 it was provided:
(2) Every covenant running with the land entered
into before the commencement of this Act shall take effect subject to the
provisions of this Act, and accordingly the benefit or burden of every such
covenant shall, subject as aforesaid, vest in or bind the persons who by virtue
of this Act succeed to the title of the covenantee or the covenantor, as the
case may be.
(3) The benefit of a covenant relating to land
entered into after the commencement of this Act may be made to run with the
land without the use of the word ‘heirs’ if the covenant is of such a nature
that the benefit could have been made to run with the land before the
commencement of this Act, and if an intention that the benefit shall pass to
the successors in title of the covenantee appears from the deed containing the
covenant.
(4) For the purposes of this section, a covenant
runs with the land when the benefit or burden of it, whether at law or in
equity, passes to the successors in title of the covenantee or the covenantor,
as the case may be.
The section
was, no doubt, passed to cater for the fact that succession rights had been
altered. But it did not otherwise affect the operation of section 58 of the
1881 Act in relation to covenants entered into prior to the commencement of the
1922 Act.
The Law of
Property (Amendment) Act 1924 was also, as its title indicates, an amending
Act. Section 3 provided:
The amendments and provisions for
facilitating the consolidation of the statute law relating to conveyancing and
property, contained in the Third Schedule to this Act, shall have effect.
In the Third Schedule, para 11, it is
stated:
The following provision shall be inserted
at the end of section 58 of the Conveyancing Act 1881: ‘For the purposes of
this section in connection with covenants restrictive of the user of land
‘successors in title’ shall be deemed to include the owners and occupiers for
the time being of the land of the covenantee intended to be benefited.’
That Act was to come into force on
January 1 1926 (see section 12(3)) but was in fact superseded by the Law of
Property Act 1925, which came into force on the same day and repealed section 3
of and Schedule 3 to the 1924 Act.
It may be
that, as submitted, one purpose of Schedule 3, para 11 to the 1924 Act was to
cater for the difficulty expressed by Farwell LJ in Forster v Elvet
Colliery, to which I have referred. But the overall effect of the
amendments made by the 1922 and 1924 Acts was much wider than that. Thus, section
78 of the Law of Property Act 1925, which applies only to covenants entered
into after January 1 1926, was in radically different terms from section 58 of
the 1881 Act, as Brightman LJ pointed out in Federated Homes Ltd v Mill
Lodge Properties Ltd. The principle of that case cannot be applied to
section 58 of the 1881 Act. There are no words in section 58 capable by
themselves of effecting annexation of the benefit of a covenant. All that
section did was to deem the inclusion of words which both before and after the
enactment of section 58 had, with the exception of Mann v Stephens,
been consistently held to be insufficient without more to effect annexation of
the benefit of a covenant.
Accordingly,
in my judgment, there are now no persons entitled to the benefit of the
purchasers’ covenants contained in the 1894 conveyance. I will therefore make a
declaration in the terms of para 1 of the originating summons, subject to any
point of detail on the precise wording which counsel may wish to raise.
The plaintiffs were awarded costs.
