Summary

A covenant contained in a conveyance which was registered at the Land Registry was enforceable against the vendor's successors in title where it touched and concerned the land, notwithstanding that, by a separate unregistered agreement, the vendor had entered into a personal obligation to release the covenant in certain circumstances.

Facts

The court had to determine as a preliminary issue the nature of rights created by a conveyance and how those rights were transmissible.

The vendor transferred two parcels of agricultural land to the claimants by a conveyance which was subject to a right of way over a farm track on the retained land. Under cl.3 of the conveyance, the claimants covenanted with the vendor and his successors in title, described as the owners and occupiers of the adjoining land edged red and blue on the plan, to use the property for agricultural purposes only. The red and blue colouring included part of the farm track. The conveyance was registered at the Land Registry. At the same time as the conveyance, the vendor and claimants entered into an agreement by reference to a plan on which some further agricultural land owned by the vendor was tinted pink and the property conveyed by the conveyance was tinted green. By that agreement, which was not registered at the Land Registry, the vendor promised to release the covenant imposed by the conveyance in relation to any of the green land if planning permission was obtained. The vendor sold off the pink land and part of the bed of the track, which was all that remained in his possession. The buyer of those parcels of land defaulted on his registered charge and they came within the defendants' ownership. On the footing that the benefit of the covenant had not been included in the charge and remained vested in the buyer, the claimants obtained a release of the covenant under the terms of the agreement. The defendants claimed that they remained entitled to enforce the covenant as the vendor's successor.

The claimants submitted that the covenant was unenforceable by the vendor's successors in title to whom he had not assigned its benefit because it did not "touch and concern" the red land or the blue land.

Held

(1) The benefit of the covenant would run with the land only if the assignee had a legal estate in the land and the covenant was one which "touches and concerns" the land, P&A Swift Investments v Combined English Stores Group Plc [1989] A.C. 632 followed. The covenant was expressed in conventional terms which, by themselves, indicated an intention that its benefit was to be enjoyed by the vendor's successors in title. It would be odd that the parties should objectively intend that there should run with the land the benefit of an obligation which they also intended would be incapable of so running for failure to "touch and concern" the land (see paras 16-17, 24-25 of judgment).

(2) Where an owner of land imposed a restriction on the user of that land for the purpose of benefiting the land retained, the court would normally assume, in the absence of some exceptional reason to the contrary, that the restriction was capable of providing that benefit, Marten v Flight Refuelling Ltd [1962] Ch. 115 applied. The claimants had not established that the restriction to agricultural user was incapable of benefiting the red land and the blue land (para.26).

(3) Although the terms of the conveyance were registered at the Land Registry, future owners would have no means of discovering the release mechanism contained in the agreement. It was therefore unlikely that the agreement contained material of sufficient weight entirely to recast the nature of the obligation imposed by the covenant. The conveyance and the agreement were not to be treated as a single document with the contents of the latter subverting the apparent meaning of the former (paras 30, 33).

(4) Even if the agreement did contain a mechanism for the release of the covenant which constituted a personal arrangement between the claimants and the vendor, it was perfectly possible that cl.3 of the conveyance created an obligation which related to or touched and concerned the red land and the blue land, and was therefore enforceable by the vendor and his successors in title, notwithstanding that the vendor had entered into a personal obligation to release it in certain circumstances (para.31).

(5) The obligation imposed by cl.3 related to the user of the property acquired by the claimants and was capable of benefiting the red land and the blue land. Since the covenant touched and concerned that land, the effect of the Law of Property Act 1925 s.78 was to render it capable of transmission without assignment. If the benefit of a covenant was annexed to a parcel of land, there was a strong presumption that it was annexed to each and every part of it, Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 W.L.R. 594 followed. That presumption was not displaced in the instant case either by the language of the covenant or by the nature of the arrangements for its release contained in a separate document. The language of cl.3 contemplated enforcement by successors in title. It followed that the covenant might be enforced by the defendants if it proved to be capable of benefiting the bed of the track (paras 35, 37-39).

Preliminary issue determined in favour of defendant