Where's the benefit?

Where's the benefit?

Published:

Author: Charlotte Walker and Judy Fawcett

Applies to: England and Wales

A recent case is a reminder to landowners that in order to enforce restrictive covenants over a neighbour's land, they have to show that their properties enjoy the benefit.

Facts

In Sutton and East Surrey Water PLC v Kilby, the water company owned Woodcote Reservoir in Purley, Surrey. This land was subject to a number of restrictive obligations imposed by a conveyance in July 1910. Among other restrictions, the covenants provided that the land should not be used for any trade or business (other than construction of the reservoir); that no building or structure should be built on it apart from a recorder house 'in accordance with elevations previously approved by William Webb of Upper Woodcote House, Purley' and that nothing should be done on the land 'which shall become a nuisance or annoyance to the said William Webb or the adjoining owners'.

The water company were planning a development of the site involving the construction of two blocks of flats. It made an application to the Upper Tribunal (Lands Chamber) to modify or discharge the covenants in connection with that development. A number of local residents objected, on the basis of the adverse effect that the modification or discharge of the covenants would have on their properties.

However, in order to be entitled to object, the residents had to establish that they were entitled to the benefit of the restrictive covenants imposed by the 1910 conveyance. The Tribunal had to decide whether they were able to do this.

The law

The devolution or sharing of the benefit of a restrictive covenant for the protection of land is legally possible, but a successor to the original beneficiary can only enforce a covenant against a successor to the covenantor if the benefit of the covenant has passed to him. This can happen in one of three ways: 

  • by assignment of the benefit of the covenant from the original beneficiary through to the present objector 
  • by a local law of mutually enforceable restrictive covenants (generally termed a 'building scheme'), or 
  • by annexation of the benefit of the covenant to the land held by the objector

The tribunal was satisfied that the first two possibilities did not apply: there was no evidence of either. This meant that the objectors could only be entitled to the benefit of the restrictive covenants if that benefit had become annexed to the land vested in them

To effect annexation appropriate words have to be used. For example, a covenant with X 'for the benefit of the retained land tinted blue'. There are many variations of appropriate phraseology but, critically, a clear indication of the intention to benefit land rather than just the original covenantee is essential.

For covenants imposed on or after 1 January 1926, section 78 of the Law of Property Act 1925 confers a statutory annexation of the benefit of a restrictive covenant on land but that section does not apply retrospectively and so was of no help in this case, where the covenants had been imposed in 1910.

The decision

The chief difficulty for the objectors - and the tribunal - was one of evidence. The original deed imposing the covenants was not available to the parties or available at the Land Registry. And although the burden of the covenants was noted on the water company's title, the benefit did not appear on the registered titles of the land belonging to the objectors. This is because this information is not recorded at the Land Registry as part of the registration process.

The only information available to the tribunal on which it had to make its decision was the extract of the covenants set out in the registered title to the reservoir land. This did not disclose the identity of the parties to the 1910 conveyance and it did not include the words from the 1910 conveyance which introduced the restrictive covenants.

From the extract available, the tribunal inferred that it was William Webb who conveyed the reservoir land in 1910 and at the time he did own other land in the vicinity. However there was no evidence as to the extent of that land. Even if that evidence were available, for the benefit of a restrictive covenant to be annexed to land, the land to be benefitted has to be 'easily ascertainable'. In this case it was not.

Moreover, at least part of the extract suggested that the benefit of the restrictive covenants lay with William Webb, personally. The restriction in relation to the construction of the recorder house required his personal approval.

The restriction in relation to nuisance and annoyance might be thought to be worded more broadly because it stipulates that no nuisance or annoyance should be caused to William Webb or the adjoining owners. However the tribunal held that the reference to adjoining owners weighed against rather than towards any intention to annex the benefit of the covenant to any identifiable area of land. Quite simply, Mr Webb could have imposed this restriction to protect himself from any complaints by adjoining owners to the activities that he had authorised on the reservoir land. The reference to adjoining owners could not be taken as giving any indication of or intention that adjoining owners should have the benefit of the restrictive covenants in their own right.

Accordingly, the tribunal held that the neighbours were not able to show that they enjoyed the benefit of the covenants, and therefore had no standing to object to their discharge or modification.

Conclusions

This case does not make new law but it does illustrate some of the practical difficulties in establishing where the benefit of a restrictive covenant lies. From the point of view of the landowner whose land is subject to the covenants, this is good news, of course, but it is not helpful to the neighbours trying to enforce those covenants.

The position may change. In its report 'Making Land Work: Easements, Covenants and Profits à Prendre' in 2011, the Law Commission proposed the creation of a new legal interest in land - a 'land obligation' - which will enable both positive and restrictions to be imposed upon land. The proposal is for such obligations to run with land and both the benefit and burden of them will require registration. Such clarity is to be welcomed. The government has stated that it intends to implement this (and other) changes, although no timetable has yet been set.

Sutton and East Surrey Water PLC v Kilby [2017] UKUT 248 (LC)

Disclaimer

This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.