Restrictive covenant–Whether enforceable on ‘building scheme’ basis–Scheme held not to have been established–Discussion of issues such as purchasers’ knowledge of plotting–Observations on supposedly more liberal approach to such questions in Baxter v Four Oaks Properties Ltd and Re Dolphin’s Conveyance
This was an
appeal by A J A Taylor & Co Ltd, developers and R P Taylor Ltd, builders,
of Ruislip, from a judgment of Foster J in the Chancery Division granting Mr
Bryan Lund and his wife, Mrs Diana Lund, an injunction restraining the
appellants from constructing a block of flats and garages on a site at
Rickmansworth Road, Northwood, Middlesex.
Mr G B H
Dillon QC and Mr D G Rice (instructed by Muriss, Saywell & Co, of
Northwood) appeared for the appellants, and Mr J Mummery (instructed by
Stephenson & Burke, of Ruislip) represented the respondents.
Giving the
judgment of the court, STAMP LJ said: This is an appeal from an order of Foster
J granting the plaintiffs an injunction restraining the defendant companies
from erecting a block of flats and garages on land at Rickmansworth Road,
Northwood, Middlesex, which is owned by the first defendants. It is clear that
the erection of a block of flats is in terms prohibited by covenants entered
into by the first defendants’ predecessor in title in respect of the land on
which the first defendants wish to erect the block and in respect of which they
are now the registered proprietors. The second defendants come into the picture
because they are the builders. For the sake of simplicity we shall refer to the
first defendants as ‘the defendants.’
The plaintiffs own land nearby. The defendants and the plaintiffs derive
title from a common vendor, W A Telling Ltd, who purchased what was called the
Northwood Grange Estate. This at the time of Tellings’ purchase, which was
completed by a conveyance dated June 24 1932, consisted of a dwelling-house
known as The Grange with its outbuildings and ground of an area of a little
over six acres at Northwood in Middlesex. Tellings sold off the estate to
purchasers, and on the respective sales to the plaintiffs’ and to the
defendants’ predecessors in title exacted from them covenants in a similar
form. The question is whether these covenants are reciprocally enforceable
between the plaintiffs and the defendants. It is the submission of the
plaintiffs, and it was accepted by the learned judge, that Tellings established
a building scheme or ‘local law’ by the effect of which restrictive covenants
entered into by the several purchasers became enforceable by each of them
against the others.
Tellings’
title was derived from a conveyance made in 1904 whereby the property conveyed
to Tellings by the conveyance of June 24 1932 had been conveyed to Tellings’
predecessors in title under the description ‘All the messuage or dwelling-house
known as The Grange with the domestic offices stables and other buildings
cottage kitchen garden pleasure grounds and shrubberies at Northwood in the
Parish of Ruislip in the County of Middlesex.’
So purchasers from Tellings, or their solicitors, must have become aware
of what was meant by ‘the Northwood Grange Estate.’ The total area was between six and seven
acres, and it was delineated on a plan drawn on the 1904 conveyance. The estate
was bounded to the south by Green Lane, to the south-west by Rickmansworth
Road, and to the north-west by Dene Road. The boundary to the east ran along a
line running from Green Lane to Dene Road. The Grange itself lay near the
eastern boundary of the estate. An architect, a Mr Boddy, was retained by
Tellings in relation to the development. He prepared a plan of the estate,
which on the estate plan was described as ‘The Grange Estate, Northwood.’ This plan (which we will call ‘the estate plan’)
is in evidence. It shows an intended continuous building line on the estate
running from the southeast corner of the estate along the whole length of Green
Lane to the corner of Green Lane and Rickmansworth Road, then along
Rickmansworth Road to the corner of Rickmansworth Road and Dene Road, and then
along Dene Road to the north-east corner of the estate. Delineated on the plan
are 23 more-or-less rectangular plots of land numbered 1 to 23. Except that
there was a gap between plot 1, at the south-east corner of Green Lane, and
plot 2, the plots are numbered consecutively 1 to 23. The picture is one of an
almost continuous line of building plots along Green Lane, Rickmansworth Road
and Dene Road. Each plot was of a depth greatly exceeding its width. The
numbered plots do not extend in depth from the roads so as to embrace the whole
of the estate, there being left a considerable area–perhaps a quarter of the
whole estate–surrounding The Grange itself which is not plotted in numbered
plots. There is, however, an additional unnumbered plot shown immediately
behind plot 1 and behind or to the east of The Grange. This latter plot was
destined for a Mr Telling, and we will call it ‘Mr Telling’s plot.’ On six of the numbered plots the site of a
house to be built or already built is shown.
The estate
plan, or a copy of it, was on October 14 1932 sent by Mr Boddy to the engineer
and surveyor to the Ruislip Northwood Urban District Council under cover of a
letter in these terms:
‘Re The
Grange Estate, Northwood. I now enclose plan of the proposed layout for the
above estate and shall be glad if the area may be treated as one self-contained
unit. The area of the estate as existing is 6.376 acres, to which is added an
additional piece at the north end of Dene Road, and this including half the
width of the roads adjoining the estate adds another half acre, making in all
over 6 3/4 acres. As you will see, the estate is planned for 23 plots, and
including the house itself makes a total of 24. This is within the schedule of
four houses to the acre. I enclose plans of houses for plots nos 16, 18 and 19
for approval.’
The learned
judge in the court below gave a careful description of the dealings by Tellings
with the several plots. For the purposes of this judgment it is sufficient to
say that there were departures from the plan. Of the 23 plots, the site of
plots 10 and 11 were used for a drive giving access to The Grange from
Rickmansworth Road. Plots 14 and 15 were amalgamated. Only one house was built
on plots 22 and 23, and the judge had no evidence regarding the title to these
two plots. It also appears from the Land Registry general map by reference to
which parcels of the estate were subsequently registered that there were
modifications in the size and shape of some of the plots. Although we have
referred to the estate plan at some length it is important to emphasise that
there was no evidence before the judge that any of the purchasers from Tellings
of any of the numbered lots ever had a sight of it.
Plots were
conveyed to purchasers by Tellings as follows: August 19 1932, plot 4;
September 5 1933, plot 20; August 27 1934, plot 3; October 15 1934, plot 1;
June 13 1935, plot 2; November 6 1935, plot 7; November 25 1935, plot 19; May
26 1936, plot 5; May 28 1936, plot 6; November 27 1936, plot 8; December 18
1936, plot 18; February 16 1937, plot 13; September 1 1937, plot 17; September
10 1937, plot 16; October 26 1937, plot 14; January 31 1938, plot 9; October 12
1938, plot 12. Each of these conveyances contained covenants by the purchaser,
the terms of which we will refer to later in this judgment, in substance first
to maintain a suitable live hedge or fence along the sides of the plot conveyed
to him, second not to erect any building upon the land conveyed to him except
in conformity with plans pre-
otherwise than as a private dwelling-house or professional residence and should
not be converted into flats, and fourth that the property conveyed should not
be used so as to become a nuisance or annoyance ‘to the owners or occupiers of
other premises forming part of the vendors’ said Grange Estate.’ The development attracted some attention in
the neighbourhood, for there appeared in an issue of a local newspaper on
September 16 1932 an article containing reference to it and to a modern house
being erected facing Green Lane, with an expression of hope that the trees
would not have to be sacrificed. In the course of a reassuring letter from Mr
Boddy appearing in the same paper three weeks later, Mr Boddy said that his
instructions were ‘to preserve the trees’ in his suggested layout. This is
reflected in a fifth covenant appearing in most but not all of the conveyances
not to cut or lop trees upon the land conveyed without the permission of the
vendors, such permission not to be unreasonably withheld. It is convenient to
record in this connection that there was on the unplotted part of the estate an
area known as ‘the spinney.’ We must
also refer to an article appearing in the issue of May 25 1934 of that same
newspaper. In that article the writer rejoiced that The Grange itself was not
to be pulled down, stating that Mrs Garrett, the purchaser, intended to allow
the use of the rooms on the ground floor for parochial meetings and that there
would be two flats on the first floor.
The sales by
Tellings to the plaintiffs’ predecessor in title and to the defendants’
predecessor in title were completed by conveyances which, though they contained
no reference to an estate plan–and there is no evidence that the purchasers
ever saw an estate plan–indicate a sale of the estate, or part of it, in plots.
The land of which the defendants are now the registered proprietors consisted
of plots 13, 14 and 15. Plot 13, conveyed by a conveyance of February 16 1937,
was the first of the plots to be acquired by a predecessor in title of the
defendants. By that conveyance plot 13 was conveyed to one Chivers by the
following description: ‘All that piece or parcel of land situate at Northwood
in the County of Middlesex on the east side of Rickmansworth Road and having a
frontage to such road of 45 ft or thereabouts all of which said piece or parcel
of land is with its boundaries abuttals and dimensions for the purpose of
identification only shown on the plan drawn hereon and thereon coloured green
and being plot 13 of the vendors’ Grange Estate.’ And when one looks at the plan, the land
coloured green has ‘plot 13’ written on it. On the right is written ‘plot 12’
and on the left ‘plot 14.’ The
conveyance contains a covenant by the purchaser in the following terms:
The purchaser
to the intent and so as to bind (so far as practicable) the land and premises
hereby conveyed into whosoever hands the same may come and so as to benefit and
protect the said lands and premises of the vendors’ Grange Estate but not so as
to render the purchaser personally liable in damages for any breach of covenant
committed after he shall have parted with all interest in that part of the said
property hereby conveyed . . . hereby covenants with the vendors that he the
purchaser and his successors in title will at all times hereafter observe and
perform the restrictions and stipulations set out in the first schedule hereto.
In the first
schedule there are set out five stipulations, as follows:
1. To
maintain a suitable live hedge or fence along the sides of his plot marked ‘T’
within the boundary.
2. Not to
erect any building upon the land agreed to be sold except in conformity with
plans previously approved by the vendors or their surveyors such approval not
to be unreasonably withheld.
3. That no
building erected on the said land shall be used otherwise than as or
appurtenant to a private dwelling-house or professional residence of a doctor
solicitor architect or dentist and the same shall not be converted into flats
or be adapted for the use of more than one family.
4. That the
said premises shall not be used in any way so as to become a nuisance,
annoyance or disturbance to the owners or occupiers of other premises forming
part of the vendors’ said Grange Estate.
5. Not to cut
down or lop any of the trees upon the land without the permission of the
vendors such permission not to be unreasonably withheld.
The conveyance
contained a covenant by the vendors that ‘the vendors or their successors in
title will not build on the adjoining plot numbered 12 of the said Grange
Estate any house garage or shed to extend more than 10 ft in a north-easterly
direction beyond the back wall of any house’ built on the plot conveyed. The
plot adjoining plot 13, namely plot 14, conveyed by a conveyance of October 26
1937, was the second of the plots to be acquired by a predecessor in title of
the defendants. By that conveyance plot 14 was conveyed to one Makin by a
description similar to that contained in the conveyance of plot 13, the words
‘plot 14’ being substituted for ‘plot 13.’
On the plan on that conveyance the words ‘plot 14’ do not occur, but on
the right of the land conveyed is written ‘plot 13’ and on the left ‘plot
15.’ There is in the conveyance of plot
14 a covenant by the purchaser in the following terms:
The purchaser
for himself and his successors in title covenants with the vendors and their
successors in title to the intent and so as to bind (so far as practicable) the
land and premises hereby conveyed into whosoever hands the same may come and so
as to benefit and protect the said vendors’ Grange Estate that he the purchaser
and his successors in title will at all times observe and perform the
restrictions and stipulations set out in the first schedule hereto.
The
stipulations set out in the first schedule are the same as those in the
conveyance of plot 13. There is, however, added a stipulation requiring the
purchaser to bear his proper proportion of the expense of maintaining and
keeping Dene Road in repair until the same should be taken over by the local
authority, the due proportion in case of dispute to be determined by the
vendors’ surveyor. The conveyance contained a covenant by the vendors, ‘so as
to bind the property into whosoever hands the same may come and for the benefit
of the property hereby conveyed,’ directed to preserving the trees on land at
the back of plot 14 delineated on the plan and called ‘spinney.’ Also conveyed to the defendants’ predecessor
in title was plot 15. Neither the original nor a copy of the conveyance of this
plot was available. From the charges register at the Land Registry it appears
that it was dated October 12 1938 and that it contained a covenant in these
terms:
The purchaser
with the intent and so as to bind (so far as practicable) the property hereby
conveyed into whosoever hands the same may come and to benefit and protect the
vendors’ said Grange Estate but not so as to render the purchaser personally
liable in damages for any breach of covenant committed after he shall have
parted with all interest in the said property hereby covenants with the vendors
and their successors in title that he the purchaser and his successors in title
will at all times hereafter observe and perform the stipulations and conditions
contained in the first schedule hereto.
The
stipulations in the first schedule to the conveyance were to all intents and
purposes identical with those in the conveyance of February 16 1937. The land
now owned by the plaintiffs, plot 9, was by a conveyance dated January 31 1938
conveyed by Tellings to a purchaser by the following description: ‘All that
piece or parcel of land situate at Northwood in the County of Middlesex on the
east side of Rickmansworth Road and having a frontage to such road of 49 ft 6
in or thereabouts together with the dwelling-house erected thereon and known or
intended to be known as Elsworth, Rickmansworth Road, aforesaid, which said piece
of land is with its boundaries abuttals and dimensions for the purpose of
identification only delineated on the plan
The plan on the conveyance is headed ‘Grange Estate, Northwood,
Middlesex.’ It is not a plan of the
estate, merely showing the land conveyed with measurements. It has no plot
number actually marked on it, but on the right is marked plot 8 and on the left
plot 10, these plots not being marked out. The conveyance contained a covenant
by the purchaser in the following terms:
The purchaser
to the intent that this covenant shall be binding so far as may be on the owner
for the time being of the property hereby assured, but upon the purchaser only
so long as she is the owner of the same, hereby covenants with the vendors and
their successors in title for the benefit and protection of the vendors’ Grange
Estate that the purchaser and her successors in title will at all times
hereafter observe and perform the restrictions and stipulations set forth in
the first schedule hereto.
The first
schedule sets out in similar, but not identical, terms the first five of the
stipulations set out in the conveyance of October 26 1937.
At this point
it is, we think, convenient that we should endeavour to state the law which
falls to be applied. We will begin by quoting a passage in the judgment of
Willis J in Nottingham Patent Brick & Tile Co v Butler (1885)
15 QBD 261 at 268 which was approved in the Court of Appeal (1886) 16 QBD 778:
The principle
which appears to me to be deducible from the cases is that where the same
vendor selling to several persons plots of land, parts of a larger property,
exacts from each of them covenants imposing restrictions on the use of the
plots sold without putting himself under any corresponding obligation, it is a
question of fact whether the restrictions are merely matters of agreement
between the vendor himself and his vendees, imposed for his own benefit and
protection, or are meant by him and understood by the buyers to be for the
common advantage of the several purchasers. If the restrictive covenants are
simply for the benefit of the vendor, purchasers of other plots of land from
the vendor cannot claim to take advantage of them. If they are meant for the
common advantage of a set of purchasers, such purchasers and their assigns may
enforce them inter se for their own benefit. Where, for instance, the
purchasers from the common vendor have not known of the existence of the
covenants, that is a strong, if not a conclusive, circumstance to show that
there was no intention that they should enure to their benefit. Such was the
case in Keates v Lyon (1869) LR4 Ch App 218; Master v Hansard
(1876) 4 Ch D 718; and Renals v Cowlishaw (1879) 11 Ch D 866. But
it is in all cases a question of intention at the time when the partition of
the land took place, to be gathered, as every other question of fact, from any
circumstances which can throw light upon what the intention was: Renals
v Cowlishaw (1879) 11 Ch D 866. One circumstance which has always been
held to be cogent evidence of an intention that the covenant shall be for the
common benefit of the purchasers is that the several lots have been laid out
for sale as building lots, as in Mann v Stephens (1846) 15 Sim
377; Western v MacDermott (1866) LR 2 Ch 72; Coles v Sims
(1853-4) Kay 56; 5 De GM & G 1; or, as it has been sometimes said, that
there has been ‘a building scheme’: Renals v Cowlishaw 11 Ch D
866 at 867.
It is, we
think, clear from the cases that it is essential to a finding that the covenants
are enforceable between the several purchasers and their respective successors
in title that there should at the time of the setting up of the scheme have
been reciprocity. Cozens-Hardy MR put the matter as follows in Reid v Bickerstaff
[1909] 2 Ch 305 at 319:
There must be
a defined area within which the scheme is operative. Reciprocity is the
foundation of the idea of a scheme. A purchaser of one parcel cannot be subject
to an implied obligation to purchasers of an undefined and unknown area. He
must know the extent of his burden and the extent of his benefit. Not only must
the area be defined but the obligations to be imposed within that area must be
defined. Those obligations need not be identical. For example, there may be
houses of a certain value in one part and houses of a different value in
another part. A building scheme is not created by the mere fact that the owner
of an estate sells it in lots and takes varying covenants from various
purchasers. There must be notice to the various purchasers of what I may
venture to call the local law imposed by the vendor upon a definite area.
In the instant
case there is no evidence that the estate plan was brought to the attention of
any of the purchasers. It is not the case of a sale of an estate by auction
where the covenants to be entered into by the purchaser of each lot are set out
in the auction particulars. There is no evidence that any proposing purchaser
of a plot was told that the vendor was proposing to exact similar covenants, or
indeed any covenants, from the purchasers of other plots (of Spicer v Martin
(1888) 14 App Cas 12). There is no evidence that Mr Boddy’s letter to the
newspaper regarding trees–a letter which appeared after the completion of the
purchase of the first three plots to be sold–was ever brought to the attention
of an intending purchaser. Accordingly, unless the terms of the conveyances
themselves sufficiently indicate an intention to create reciprocal rights and
obligations as between the several purchasers there is wanting any evidence of
that intention. And so we turn to consider the contents of the deeds
themselves.
Upon none of
the conveyances was there any plan showing a defined area over which any
reciprocal obligations might be enforceable. Because the plan on his conveyance
showed his own and the adjoining numbered plots, each purchaser no doubt became
aware that the vendors were in the process of selling land by reference to
numbered plots, and it would be a fair inference from that plan that the
vendors had in their possession something in the nature of a master plan by
reference to which the estate was being developed. The purchaser would know if
he was the purchaser of plot 15 that the vendors had disposed of at least 15
plots or intended to do so. If however he was the purchaser of plot 1, he would
not know the situation, size or number of the plots into which the vendors were
dividing the land which they were developing. Unless it be found in the body of
the conveyance to a purchaser, as distinct from the plan thereon, there is
nothing to show the area over which what the Master of the Rolls in Reid
v Bickerstaff called ‘the local law’ was to operate. Nor do the earlier
conveyances go far to assist the conclusion that in laying out the estate or
part of it in plots and imposing restrictive covenants on the purchaser of each
plot the vendors intended to create a scheme under which as regards these
covenants there was to be reciprocity. Foster J pointed out that in the first
four, in point of time, of those conveyances the covenant by the purchaser does
not contain the words, much relied upon by counsel on behalf of the plaintiffs,
‘and so as to benefit and protect the vendors’ Grange Estate,’ or words to that
effect. In the first and fourth of those conveyances, one finds a provision
that ‘the vendors reserve the right to build upon and develop the remainder of
their estate in such way as they think fit.’
Such a lack of uniformity in the terms of the covenants, as
distinguished from a lack of uniformity in the stipulation themselves, makes it
more difficult to infer an intention on the part of the vendors to impose a
local law over an estate. Furthermore, although after the date of the fourth
conveyance the covenants were similar in form there are two exceptions. In the case
of the conveyance of September 10 1937 there is a reverter to the earlier form,
in that the words ‘and so as to benefit and protect the vendors’ Grange Estate’
are not there. In the case of the conveyance of May 26 1936 one finds the
covenant expressed in language not to be found in the others, ‘for the benefit
of the Grange Estate at North-wood belonging to the vendors or the part
thereof for the time being unsold.’
Had it been intended to create reciprocal obligations as between the
several purchasers, one would expect those obligations to be expressed in each
conveyance in the same terms. Instead one finds here that of the 17 conveyances
to which we have referred, the covenants by the purchasers in four of them omit
words relied upon in
obligations enforceable by the other purchasers.
Counsel in
argument fixed upon the terms of the conveyances by Tellings to the
predecessors in title of the plaintiffs and the defendants upon which to found
his submissions. He relied particularly on the form of the covenants in those
conveyances and the nature of the restrictions thereby imposed. The area over
which it was intended that the scheme or local law was to extend was, it was
urged, ‘the vendors’ Grange Estate,’ for the benefit of which the covenant was
expressed to be. In developing this submission to satisfy the requirement
insisted upon by Cozens-Hardy MR in Reid v Bickerstaff that a
purchaser must know the extent of his burden and the extent of his benefit and
cannot be subject to an implied obligation to purchasers of an undefined and
unknown area, counsel on behalf of the plaintiffs was faced with a difficulty.
Although each purchaser may from his knowledge of the earlier title deeds have
known the situation and area of what was the Grange Estate, there is no
evidence that he knew what parts of it were included in the vendors’ plan of
development and no evidence that Tellings did in fact intend to sell the
unplotted part either in plots or at all. Nor is there evidence that Tellings
intended to, or did in fact, exact covenants from the purchaser of either the
unplotted parts, Mr Telling’s house or plots 21, 22 or 23. As to the latter
plots the present owners have not been willing to disclose their title.
Tellings did not, so it would appear, exact from the purchaser of The Grange
itself covenants such as are found in the conveyances to the respective
predecessors in title of the plaintiffs and the defendants. Faced with the
difficulty of showing that there was a scheme or local law established by
Tellings affecting the whole of the Grange Estate, counsel on behalf of the
plaintiffs was at one point in the course of the debate disposed to advance the
alternative submission that there was a scheme affecting the plotted part of
the estate. But there was no evidence to show that any of the several
purchasers was aware of the area over which the plotted parts extended. Because
there was no extrinsic evidence, nor anything in his own conveyance, to show
him that there was a scheme relating to a defined area, or that Tellings, if
they did, intended that stipulations should be imposed in respect of each part
of that area, a purchaser could not (on the authority of Reid v Bickerstaff)
be subject to an implied obligation to the other purchasers. On this ground
alone the action must in our opinion fail. Whatever scheme involving reciprocal
rights and obligations Tellings may have sought to establish, the necessary
evidence that the several purchasers intended to be bound by a scheme or local
law under which they were to have reciprocal rights and obligations is lacking.
The difficulties of the plaintiffs in this regard are perhaps emphasised when
one observes that whatever inference you may draw from the conveyances, there
is nothing in them from which a purchaser could draw the inference that
Tellings intended to confer on a purchaser a right to prevent Tellings from
dealing as they thought fit–eg by the erection of a block of flats–with the
unplotted part of the estate.
There are, we
think, other difficulties in finding that the stipulations were intended by
Tellings to be reciprocally enforceable. The learned judge in the court below
took the view that the stipulations were of the sort designed to benefit other
purchasers of plots and not the vendors or any land retained by them. But of
the negative stipulations which are to be found in the known conveyances, that
directed against the erection of a building ‘except in conformity with plans
approved by the vendors or their surveyors such approval not to be
unnecessarily withheld,’would, once the estate had all been sold off in
parcels, become quite inappropriate. A similar difficulty arises in relation to
the stipulation against cutting down or lopping trees ‘without the permission
of the vendors such permission not to be unreasonably withheld.’ Both these stipulations appear to us to be
designed to apply during the development of the estate to enable the vendors to
sell off the several plots to their better advantage. As Foster J indicated,
had the vendors intended to impose reciprocal obligations one would have
expected them to have done so by convenants taken from each purchaser in very
similar terms, yet you find in the earlier conveyances nothing to indicate even
an intention to ‘benefit’ or ‘protect’ the ‘vendors’ Grange Estate.’ We have mentioned in passing the change in
the form of covenant found in the conveyance of September 10 1937 and that of
May 26 1936.
Because it was
submitted that in recent times the courts, in determining whether the necessary
ingredients of a building scheme or local law are shown to have existed, have
adopted what was called a more liberal approach than was formerly the case, it
is right that we should refer to the two cases relied upon in support of that
submission. They are Baxter v Four Oaks Properties Ltd [1956] Ch
816 and Re Dolphin’s Conveyance [1970] 1 Ch 654. In both those cases it
had been submitted that in order to establish a building scheme the
requirements laid down by Parker J in Elliston v Reacher [1908] 2
Ch 374 must be satisfied. One of those requirements was, and we quote Parker
J’s judgment, that ‘in order to bring the principles of Renals v Cowlishaw
and Spicer v Martin into operation it must be proved . . . (2)
that previously to selling the lands to which the plaintiffs and defendants are
respectively entitled the vendor laid out his estate or a defined portion
thereof (including the land purchased by the plaintiffs and defendants
respectively) for sale in lots subject to restrictions intended to be imposed
on all the lots. . . .’ In his judgment
in Baxter v Four Oaks Properties Ltd Cross J rejected the
condition that the defined estate should have been laid out for sale in lots.
He pointed out that Elliston v Reacher was not a case in which
there was direct evidence afforded by the execution of a deed of mutual
covenant that the parties intended a building scheme but whether one could
properly infer that intention in all the circumstances. Cross J took the
view, also adopted in Re Dolphin’s Conveyance, that Parker J was not
intending to lay down that the fact that the common vendor did not bind himself
to sell off the defined area to which the local law was to apply in lots of any
particular size but proposed to sell off parcels of various sizes according to
the requirements of the various purchasers must, as a matter of law, preclude
the court from giving effect to a clearly proved intention that the purchasers
were to have rights inter se to enforce the provisions of the local law over
the area.
In Re
Dolphin’s Conveyance, in which the Baxter v Four Oaks case
was followed, the area over which the scheme or local law was to extend was
specified and the intention that the purchasers were to have rights inter se
to enforce the stipulations of the local law was, so the judge thought,
expressed clearly in every conveyance. The stipulations which each purchaser
covenanted to observe in the several conveyances were identical, and the first
and every subsequent conveyance by the vendor contained a covenant by him, in
effect, to obtain a covenant from every other purchaser to observe them; a
useless series of covenants except upon the basis that all could enforce them.
It would, no doubt, have been better if the draftsman of the conveyances in
that case had added the words ‘to the intent that the covenants by the
purchasers shall be mutually enforceable,’ and if a plan had been attached
showing the area affected by the scheme; but the judge found a sufficient indication
of that intention and a sufficient identification of that area. No doubt the
last-mentioned two cases are authorities for the proposition that Parker J, in
the well-known passage of his judgment in Elliston v Reacher, did
not intend to lay down that the fact
which the local law was to apply in lots of any particular size was fatal to
the creation of a local law over that area, but rather that if the vendor has
done so you have one of the necessary ingredients from which the creation of
the local law may be inferred. And where you find that all those concerned–the
vendor and the several purchasers–have by the effect of the documents they have
executed evidenced the intention to create such a local law over a defined
area, those cases are authority for saying that the court may give effect to
that intention. But we find nothing in those cases indicating that the
conditions from which a building scheme may be inferred from the facts are any
different than was formerly the case. In the instant case, the creation of a
building scheme cannot for the reasons we have given be inferred; and there is
absent from the deeds themselves that clear evidence of intention to create
reciprocal rights and obligations over a defined area which was found in Baxter
v Four Oaks Properties Ltd and in the Dolphin’s Conveyance cases.
We allow the appeal.
The
appellants were awarded costs.
