Sale of land – Restrictive covenant – Covenant given by vendor for benefit of property conveyed or part for time being remaining unsold – Whether covenant ceasing to be enforceable on onward sale of entire property to appellants – Whether appellants entitled to benefit of covenant and to rectification of charges register to show its existence – Appeal allowed
The appellants purchased a property that was conveyed to them by three transfers from the various vendors between 1980 and 1987. Each of the conveyances also assigned the benefit of a restrictive covenant that had been given to the vendors in 1957 on their own purchase of the land from F. That covenant, which was expressed to be made with the “Purchasers and their successors in title” and was “for the benefit of the property hereby conveyed, or the part thereof for the time being remaining unsold and every part thereof”, prevented the use of the meadow for any other purpose than as grassland or grazing, or the erection of any building or moveable structure, without the written consent of the purchasers.
In 1990, the respondent purchased from F’s personal representatives a property that included the meadow. The transfer stated that the property was sold subject to the covenants contained in the 1957 conveyance. The respondent was registered with title absolute to the property and, although a right of way over it was noted on the charges register, that register made no reference to the covenant in the 1957 conveyance.
In 2009, the appellants brought proceedings for a declaration that the restrictive in the 1957 conveyance was valid and binding on the respondents and an order to rectify the charges register accordingly. That claim was dismissed on the ground that the covenant, properly construed, had applied only until the land conveyed by the 1957 conveyance was sold, and had therefore ceased to apply to the land that the appellants had acquired by reason of that acquisition. The judge held that the words “the part thereof for the time being remaining unsold” in the covenant limited its scope so as to benefit only so much of the property as was not subsequently sold, thereby limiting the purpose of the covenant so that it would cease to be enforceable when the land was sold to a stranger. The appellants appealed.
Held: The appeal was allowed.
The restrictive covenant should be construed in the context of the 1957 conveyance and in the light of then surrounding circumstances. The relevant clause was, in its face, a covenant with “the purchasers and their successors in title”, which would include successors in title to the entire property. The express reference to successors in title in the opening part of the clause was not cut down by the subsequent words “for the benefit of the property hereby conveyed, or the part thereof for the time being remaining unsold and every part thereof”. To ensure that the benefit of a restrictive covenant ran with the land without the need for a chain of assignments, it was necessary for it to be “annexed” to the land. That was what those words sought to do. Although words of annexation could also limit the identity of the covenantee or the duration of the covenant, that was not their primary purpose. Thus, in accordance with the intention disclosed by those words, the benefit of the covenant was annexed to “the property hereby conveyed, or the part thereof for the time being remaining unsold and every part thereof”. The word “or” pointed to a clear contrast between the whole and a part and the words “remaining unsold” qualified the part not the whole. Accordingly, successors in title to the entire property, such as the appellants, were entitled to the benefit of the covenant. If a part of the property was sold, then the benefit of the covenant was not annexed to the part sold, but it remained annexed to the part retained.
That construction accorded with the words used and also produced a more sensible result than the alternative favoured by the judge below. The covenant would continue to protect the property so long as it was sold as a whole. The judge’s construction, which had limited the benefit of the restrictive covenant to the original purchasers and persons claiming under them otherwise than by purchase, gave little effect to the opening words of the clause; it was hard to see why successors in title generally should be included if only donees were intended.
The benefit of the restrictive covenant remained annexed to the property and could be enforced by the appellants against the respondent. The charges register should contain a reference to the covenant and the omission of any such reference was an omission that should be corrected by rectification of the register under para 1(a) of Schedule 4 to the Land Registration Act 2002. Although the appellants would be entitled to an award of compensation for the mistake, it was of little value when compared with specific enforcement of the covenant. The respondent had at all times had actual notice of the covenant. It would be unjust not to order the alteration necessary to add the burden of the covenant to the charges register of the title to the respondents’ property.
Thomas Leech QC (instructed by Thomas Eggar LLP) appeared for the appellants; Jonathan Small QC and Nathaniel Duckworth (instructed by Charles Hill Hubbard, of Chichester) appeared for the respondent.
Sally Dobson, barrister
