Land Law Essay Help: Covenants

Land Law Cases referred to in this section:
 Mayor of Congleton v Pattison (1808) 10 East 130
Webb v Russell (1789) 3 Term Rep 393
Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500, [1949] 2 All ER 179, CA
The Prior's Case (1368) Co Litt 385a
Rogers v Hosegood [1900] 2 Ch 388
Shayler v Woolf [1946] 1 All ER 464
Austerberry v Oldham Corpn (1885) 29 ChD 750, CA
Halsall v Brizell [1957] Ch 169, [1957] 1 All ER 371
Rhone v Stephens [1994] 2 AC 310, [1994] 2 All ER 65, HL
Luker v Dennis (1877) 7 Ch D 227
Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd [1952] Ch 286, [1952] 1 All ER 279

The Benefit of the Covenant
Other than covenants found in leases, the benefit of a covenant, positive or negative, may run with the land at law if it "touches and concerns the land". This means that 'the covenant must either affect the land as regards mode of occupation, or it must be such as per se, and not merely from collateral circumstances, affects the value of the land' (Mayor of Congleton v Pattison (1808) 10 East 130),

The covenantee, at the time of making the covenant, must have had a legal estate in the land which is to be benefited (Webb v Russell (1789) 3 Term Rep 393 at 402), and the assignee claiming the benefit must be able to show that he is a successor in title of the covenantee, or a person deriving title under the covenantee or under his successors in title (Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500, [1949] 2 All ER 179, CA); and it may so run where the covenantor has never even had any interest in the land and there is no servient tenement (The Prior's Case (1368) Co Litt 385a). There must be an intention that the benefit should run with the land owned by the covenantee at the date of the covenant (Rogers v Hosegood [1900] 2 Ch 388 at 396 per Farwell J, affd [1900] 2 Ch 388 at 403, CA). The benefit of a covenant relating to land may be assignable under the Law of Property Act 1925 s 136 (as amended) which provides that the assignment must be in writing and express notice in writing must be given to the covenantor (Section 136(1)); either where it is expressed that an intention that it should be assignable is shown, or where from its nature the attribute of assignability should be imputed to it (such as in Shayler v Woolf [1946] 1 All ER 464 at 467).

A successor in title of the covenantee may be able to bring a claim in contract in his own right under the Contracts (Rights of Third Parties) Act 19999. In order to be able to bring such a claim, the third party must be expressly identified in the contract by name, as a member of a class or as answering a particular description but need not be in existence when the contract is entered into (Contracts (Rights of Third Parties) Act 1999 Section 1(3)); and a successor in title, whether express or implied (see Law of Property Act 1925 s 78), may fall within this definition of a third party.

The Burden of the Covenant
The burden of the covenant never runs at law (Austerberry v Oldham Corpn (1885) 29 ChD 750, CA) and there is nothing in the Contracts (Rights of Third Parties) Act 1999 which changes or affects this rule. A positive covenant contained in a deed may, however, be enforced against successors in title where the benefit is conditional on the undertaking of the burden (see Halsall v Brizell [1957] Ch 169, [1957] 1 All ER 371). The comments of Lord Templeman in Rhone v Stephens [1994] 2 AC 310, [1994] 2 All ER 65, HL, suggests there are two requirements for the enforceability of a positive covenant against a successor in title to the covenantor. The first is that the condition of discharging the burden must be relevant to the exercise of the rights that enable the benefit to be obtained. The second is that the successors in title must have the opportunity to choose whether to take the benefit or, having taken it, to renounce it, even if only in theory, and thereby to escape the burden and that the successors in title can be deprived of the benefit if they fail to assume the burden (Halsbury's Laws of England: 614. Covenants, other than those between landlord and tenant, running with the land at law).

The Burden May Run in Equity
For restrictive covenants which are negative, at least in substance even if not in form; or a covenant is partly positive and partly negative but severable, equity will assist - for the latter, such a covenant may be enforced so far as it is negative (Clegg v Hands (1890) 44 ChD 503, CA).

A wider range of persons may sue and be sued in equity on restrictive covenants, provided that certain conditions are present, than was possible at law. There is, for example, no need for there to be privity of estate between the claimant and the defendant (Luker v Dennis (1877) 7 ChD 227 at 236); the burden of a restrictive covenant entered into between a vendor and a purchaser may pass in equity; and an undertenant or other occupier may be bound by such a covenant. A beneficiary under a trust whose trustees are bare trustees of the benefit of a restrictive covenant may sue on the covenant without making the bare trustees parties to the claim (Newton Abbot Co-operative Society Ltd v Williamson and Treadgold Ltd [1952] Ch 286, [1952] 1 All ER 279).

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