Lucille Sugarman v (1) George Porter (2) David Creedon (3) Brighton Lions Housing Society Ltd (4) Theresa Wall (2006)

Transcript date:

Wednesday, March 8, 2006

Matter:

Court:

High Court

Judgement type:

Substantive

Judge(s):

Peter Smith J

Case No: HC05C02969

Neutral Citation Number: [2006] EWHC 331 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Royal Courts of Justice

Strand, London, WC2A 2LL

 

Date: 8th March 2006

Before :

 

MR JUSTICE PETER SMITH

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Between :

 

Lucille Nancy Sugarman

 

Claimant

 

- and -

 

 

(1) George Richard Porter

(2) David Neil Creedon

(3) Brighton Lions Housing Society Ltd

(4) Teresa Wall

 

 

 

Defendants

 

- - - - - - - - - - - - - - - - - - - - -

 

- - - - - - - - - - - - - - - - - - - - -

 

Mark Halliwell (instructed by Land Law) for the Claimant

Matthew Hutchings (instructed by Richard Buxton) for the Fourth Defendant

 

Hearing dates: 16 th February 2006

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Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

 

 

.............................

 

MR JUSTICE PETER SMITH

 

 

Peter Smith J :

 

INTRODUCTION

 

1.

 

This judgment arises out of the trial of this action whereby the Claimant as freehold owner of the land known as "Ruston" Withdean Avenue, Brighton ("the Property") claims as against the Defendants as owners or tenants of the neighbouring properties ("Neighbouring Properties") that they are not entitled to the benefit of covenants set out in the first Schedule ( This judgment arises out of the trial of this action whereby the Claimant as freehold owner of the land known as "Ruston" Withdean Avenue, Brighton ("the Property") claims as against the Defendants as owners or tenants of the neighbouring properties ("Neighbouring Properties") that they are not entitled to the benefit of covenants set out in the first Schedule ("the Covenants") to the conveyance of the Property dated 18 th December 1853 ("the Conveyance") and made between (1) Katheleen Mary Hart ("Mrs Hart") (2) Midland Bank Limited and (3) William Bowman Williams.

 

2. Alternatively a declaration is sought that the Defendants are not entitled to enforce the Covenants.

 

SETTING OUT THE TITLE

 

3.

 

By a conveyance dated 12th August 1953 and made between the executors of Helen Lybbe (1) and Mrs Hart (2) in consideration of the sum of £7,000 Mrs Hart acquired a parcel of land fronting Withdean Avenue shown as red on the plan included in the conveyance. It appears to be a cottage with a large garden and orchard.

 

4. She obviously determined to sell off part of the grounds and retained the cottage herself.

 

5. The first sale off was by the Conveyance. In consideration of £2,500 she sold and conveyed the land shown coloured pink on the plan annexed to the Conveyance. That was a parcel of land comprising of the middle part of the land conveyed by the earlier conveyance.

 

6. In clause 2 of the Conveyance Mr Williams covenanted as follows:-

 

" The Purchaser (i) hereby covenants with the Vendor but by way of indemnity only and not further or otherwise that the Purchaser will at all times duly observe and perform the said restrictive and other covenants contained in the Conveyances dated the twentieth July One thousand eight hundred and eighty three and the thirtieth March One thousand nine hundred and twenty two hereinbefore mentioned so far as aforesaid and will keep indemnified the Vendor and her estate and effects in respect of any future breach thereof so far as aforesaid and (ii) for the benefit and protection of the Vendor's said adjoining property or any part thereof remaining unsold and any part of such property hereafter expressly sold with the benefit of this present covenant hereby covenants with the Vendor to the intent and so as to bind as far as practicable the property hereby assured into whosesoever hands the same may come that the Purchaser will henceforth observe and perform the covenants provisions and stipulations set out in the said First Schedule."

 

7.

 

The schedule in question provides as follows:-

 

" THE FIRST SCHEDULE hereinbefore referred to

 

1 NO building or erection whatsoever shall be erected or placed upon the land hereby agreed to be sold except a detached private dwelling house with or without a private garage for the sole use of the occupiers of such house. Such dwelling house and garage shall be erected only in accordance with the plans drawings elevations and specifications approved by the Vendor or the Vendor's Surveyor whose proper fee in respect of such approval shall first by paid by the Purchaser but such approval shall not be unreasonably withheld.

 

" 2 At his own expense forthwith to erect good and sufficient close boarded fences not less than six feet in height on so much of the north side of the property hereby agreed to be sold as is not bounded by the existing brick wall and on the east side thereof and forever after to maintain such fences at his expense PROVIDED that the Purchaser may if he desire build a brick wall on the northern boundary as a continuation of and of the same height as the existing brick wall either for the full length of the remainder of said northern boundary of for such length as he desire and complete the remainder with the said good and sufficient close boarded fence as aforesaid. 3 NO building or erection of any kind except dwarf boundary wall or fences shall be erected in front of the building line shown on the plan annexed hereto."

 

8.

 

In addition by clause 4 Mrs Hart gave a covenant seeking to ensure that the land to the west of the Property was similarly subjected to covenants of the same nature as affected the Property as follows:-

 

" 4 THE Vendor hereby covenants with the Purchaser that she the Vendor (a) will not erect or allow to be erected on the Vendor's said adjoining property to the west of the property hereby assured more than two dwelling houses with suitable outhouses and (b) will impose similar covenants provisions and stipulations as those set out in the First Schedule hereto on any sale of the Vendor's said property on the west side of the property hereby assured for the benefit also of the property hereby assured and any part thereof."

 

9.

 

The land to the west was sold off by a conveyance apparently dated 31st December 1953 and made between (1) Mrs Hart (2) Midland Bank Limited and (3) Arthur Aldritt. No copy of that conveyance was produced but there is an extract in that title at the Land Registry under Title Number ESX40344 as follows:-

 

" The Purchaser…. for the benefit and protection of the said adjoining property formerly belonging to the Vendor and hatched green on the said plan and the Vendor's said adjacent property hatched mauve on the said plan or any part thereof remaining unsold and any part of such property hereafter expressly sold with the benefit of this present covenant hereby covenants with the Vendor to the intent an so as to bind as far as practicable the property hereby assured into whosoever hands the same may come that the Purchaser will henceforth observe and perform the covenants provisions and stipulations set out in the said First Schedule.

 

The First Schedule before referred to

 

1 No building or erection whatsoever shall be erected or placed upon the land hereby conveyed except two detached private dwelling houses with or without a private garage for each house for the sole use of the occupiers of each of such houses. Such dwelling houses and garages shall be erected only in accordance with the plans drawings elevations and specifications approved by the Vendor or the Vendor's Surveyor whose fee in respect of such approval shall first be paid by the Purchaser but such approval shall not be unreasonably withheld.

 

2 At his own expense forthwith to erect good and sufficient close boarded fences not less than six feet in height on the north and west sides of the property hereby conveyed ad forever after to maintain such fences at his expense.

 

3 No building or erection of any kind except dwarf boundary walls or fences shall be erected in front of the building line shown on the said plan."

 

10.

 

The final part of the land conveyed to her was disposed of by a conveyance dated 1 st March 1957 between (1) Mrs Hart and (2) Thomas Frederick Palmer. That comprised the cottage and the most easterly portion of land conveyed to her in 1953.

 

11. Unlike the earlier conveyances no fresh covenants were imposed on this sale off.

 

12. The First and Second Defendants are the registered proprietors of the Coach House being part of the land sold to the Palmers in 1957. The remainder of that part of the land thereby sold is now registered in the name of the Third Defendant. The Fourth Defendant is a tenant of part of that property No 6 Lions Gardens.

 

13. The land to the west of the Property initially sold off by the Aldritts conveyance has been severed but the current owners of the 2 parts of that land have written confirming that they will not pursue any claim to prevent the proposed actions of Mrs Sugarman.

 

14. Mrs Sugarman proposes to demolish the building on the Property and to erect 8 self contained apartments.

 

CLAIMANTS CONTENTIONS

 

15.

 

Mr Halliwell who appears for the Claimant puts forward his case in a quite simple way. He submits that the true construction of the covenant is that Mrs Hart reserved the right to enforce the covenant for the benefit of the parts of the retained land comprised in the 1953 Conveyance in her favour as long as they were unsold. In the event that they or parts of them were subsequently sold the benefits of the covenant were not to pass unless it was expressly assigned with the conveyance.

 

16. In the case of the Defendants who have derived title from the Palmers Conveyance there is no express assignment and as all such land has now been sold by Mrs Hart the benefit of the covenants has not passed to them.

 

17. He relies mainly upon the decision of the Court of Appeal in Crest Nicholson Ltd v McAllister [2004] 1 WLR 2409.

 

18. In that case there are similar wordings as found in the Conveyance namely:-

 

"11 The covenants in the Humphreys conveyances did contain express words of annexation:

 

For the benefit of the property at Claygate aforesaid belonging to the vendors or the part thereof for the time being remaining unsold and so as to bind the property hereby conveyed the purchaser hereby covenants with the vendors and the trustees that the purchaser and the persons deriving title under him will henceforth at all time hereafter observe and perform all and singular the restrictions contained in the first schedule hereto ..."

 

19.

 

In referring to that wording Chadwick LJ describes it as being " express words of annexation".

 

20. At paragraph 35 Chadwick LJ referred to the decision in Marqu ess of Zetland v Driver [1939] Ch 1 as follows:-

 

"35 In Marquess of Zetland v Driver Ch 1 the vendor was tenant for life of settled land at Redcar in Yorkshire. By a conveyance dated 10 September 1926 a part of that land (subsequently known as no 200, Lord Street) was conveyed to a purchaser, Mr David Goodswen. The purchaser covenanted

 

"to the intent and so as to bind as far as practicable the said property hereby conveyed into whosesoever hands the same may come and to benefit and protect such part or parts of the lands in the Borough Township or Parish of Redcar ... now subject to the settlement (a) as shall for the time being remain unsold or (b) as shall be sold by the vendor or his successors in title with the express benefit of this covenant ...

 

that he would observe the restrictions and stipulations set out in the second schedule to the conveyance. Those restrictions included a restriction on use which, in the opinion of the vendor, might be detrimental to him or the owners or occupiers of any adjoining property in the neighbourhood. In 1935 Mr Goodswen conveyed no 200, Lord Street to the defendant, Mr Driver, who thereafter sought to use it for the sale of fried fish. The plaintiff, as successor to the original covenantee, took the view that that use was detrimental to adjoining property in the neighbourhood and sought to enforce the covenant.

 

36 After setting out the principles in the passage to which I have already referred, the Court of Appeal said, at pp 8-9: Applying these conditions to the present case, the covenant sued upon appears to comply with them. The covenant is restrictive; it is expressly stated in the conveyance to be for the benefit of the unsold part of the land comprised in the settlement and such land is easily ascertainable , nor is it suggested that at the date of the conveyance the land retained was not capable of being benefited by the restrictions, and lastly the appellant is the successor in title of the original covenantee and as such is the estate owner of part of the land unsold which is subject to the settlement." (Emphasis added.) But the court went on to say, at p 10:

 

"It is to be noticed in the present case that the benefit of the covenant is not intended to pass to a purchaser without express assignment. It is not necessary for us to express any opinion as to what would be the effect of a sale of part of the settled property with an express assignment of the covenant; but, if such a purchaser could enforce the covenant, it could only be for so long as some successor in title of the original covenantee retained some part of the settled property, since such a person alone can form the requisite opinion. For these reasons the appeal must be allowed. The appellant is entitled to the injunction which he seeks subject to two limitations. In the first place the injunction must be limited to fried fish ... because the opinion of the appellant as to the nuisance was confined to fried fish, and secondly, the period of the injunction must be confined to so long as the appellant or some successor in title of the

 

original vendor retains unsold any part of the settled property for the benefit of which the covenant was imposed ." (Emphasis added.)

 

It is important to keep in mind that the covenant was taken to benefit such part or parts of the lands subject to the settlement "as shall for the time being remain unsold". The words which I have emphasised make clear that the land intended to be benefited may be defined so as to exclude land subsequently sold off from the vendor's estate. That principle was recognised in the recent decision of this court in Dano Ltd v Earl Cadogan [2003] EWCA Civ 782.

 

21.

 

The wording in the Marquess of Zetland case in my opinion is indistinguishable from the wording in the Conveyance.

 

22. Chadwick LJ then considered the effect of the Marquess of Zetland case was to show that it is possible to displace the effect of Section 78 LPA 1925. He further made reference to the case of Roake v Chadha [1984] 1 WLR 40 which too provided that the benefit of the covenant did not pass to any successor in Title unless it was expressly assigned. Chadwick LJ referred to the judgment of Judge Paul Baker QC in the Chadha case dealing with the point that under Section 78 LPA 1925 there is no express statement that it applies " unless a contrary intention is expressed " (cp Section 79 which does say that). Chadwick LJ agreed with the observations of Judge Paul Baker QC that there was no reason why a covenantor should not make express words limit the scope of the obligation which he was undertaking nor why a covenantee should not be able to accept a covenant for his benefit on terms that the benefit doesn't automatically pass see paragraph 41 of the judgment as follows:-

 

"41 I respectfully agree, first, that it is impossible to identify any reason of policy why a covenantor should not, by express words, be entitled to limit the scope of the obligation which he is undertaking; nor why a covenantee should not be able to accept a covenant for his own benefit on terms that the benefit does not pass automatically to all those to whom he sells on parts of his retained land. As Brightman LJ pointed out, in the passage cited by Judge Paul Baker QC, a developer who is selling off land in lots might well want to retain the benefit of a building restriction under his own control. Where, as in Roake v Chadha [1984] 1 WLR 40 and the present case, development land is sold off in plots without imposing a building scheme, it seems to me very likely that the developer will wish to retain exclusive power to give or withhold consent to a modification or relaxation of a restriction on building which he imposes on each purchaser; unfettered by the need to obtain the consent of every subsequent purchaser to whom (after imposing the covenant) he has sold off other plots on the development land. I can see no reason why, if original covenantor and covenantee make clear their mutual intention in that respect, the legislature should wish to prevent effect being given to that intention. "

 

23.

 

In answering questions in respect of the conveyances the subject matter in the Crest case Chadwick LJ indicated that there was express annexation of the Covenant and (paragraph 46) observed that there was " an express annexation" by the use of the words " or the part thereof for the time being remaining unsold".

 

24. The reasoning behind this annexation he refers to in paragraph 48 which makes sense. The original vendor would wish to ensure that he keeps control of all of the development and all of the covenants until the estate is finally developed. He can then also control the passing of the benefit of the covenants by assigning the benefit if he so wishes. Given the nature of the covenants which require approval of vendor this makes sense. Otherwise somebody seeking a variation or relaxation of the covenants to needs the consent of each and every owner who has derived title from the unsold land which existed at the time of the conveyance to the relevant purchaser. Absent a building scheme which creates mutually enforceable covenants it would as Chadwick LJ said echoing the words of Ungoed Thomas J be " a building scheme in Alice's Wonderland".

 

25. It seems to me that the effect of Chadwick LJ's judgment is that in a conveyance where the benefit of the covenant is said to benefit the land that remains unsold from time to time of a vendor the effect is to annex the covenant to that land for the period in which the land remains unsold. Upon the sale of the land the covenant is not annexed and will only pass if there is an express assignment.

 

26. It seems to me that this analysis is correct. I can see no basis for suggesting that the result in Crest would not apply equally here. It seems to me plain that the covenants were intended to enable Mrs Hart to control so long as she was the owner from time to time of the land unsold. If she ceased to own a piece of land by sale the benefit of the covenant ceased to be annexed to that land upon sale unless it was expressly assigned when the benefit became enforceable by virtue of that assignment. I leave out of consideration as to whether the effect of the first assignment is an annexation as that point does not arise before me (see Megarry & Wade "Law or Real Property" paragraph 16-073).

 

27. There is nothing from the wording of the Conveyance that leads me to conclude that Mrs Hart did not intend to retain exclusive control over the benefit of the first schedule covenants. I accept that she agreed in clause 4 of the Conveyance to impose a similar covenant on the westerly portion of the retained land (it was apparently incorporated) but I do not see that means that the intent of the words are such as to negative the view that I have set out above. Whether that was effectual is doubtful. There may be an argument that the benefit will have passed to the owners of the Williams land by virtue of Section 56 LPA 1925. It may be possible to construe the covenant in the Aldritt Conveyance as being entered into by her as a trustee for the benefit of the land sold by the Conveyance. Happily this conundrum is something else that I am not required to resolve.

 

28. In my view the wording of the Conveyance is such to displace the statutory annexation of Section 78 as happened in the Crest case.

 

29. Mr Hutchings for the Fourth Defendant raises two separate arguments. First, he submits there has been an assignment by virtue of Section 63 (1) LPA 1925 so that each subsequent Conveyance should have read into it an assignment of the benefit of the covenants contained in the First Schedule to the Conveyance.

 

30. The second argument involves considering the effect of the second covenant contained in the First Schedule which is a fencing covenant of a well known form namely to erect and forever after to maintain a wall.

 

ASSIGNMENT BY SECTION 63 LPA 1925

 

31.

 

It seems to me that on the construction of the wording of the Conveyance the benefit can only pass if it passes expressly. I do not see that the wording is any different to that in the Roake case referred to above.

 

32. Further it is important to review Section 63 in its context. Section 63 provides:-

 

"(1) every conveyance is effectual to pass all the estate right Title interest claim and demand which the conveying parties respectively have in, to or on the property conveyed or expressed or intended so to be or which they respectively have power to convey in, to or on the same.

 

(2) This section applies only if and so far as a contrary intention is not expressed in the conveyance and has the effect subject to the terms of the conveyance and to the provisions therein contained".

 

33.

 

In the context of this argument one should also have regard to Section 62 which provides as follows:-

 

" (1) A conveyance of land shall be deemed to include and shall by virtue of this Act operate to convey with the land all buildings, erections, fixtures, commons, hedges, ditches, fences, ways, waters, watercourses, liberties, privileges, easements, rights and advantages whatsoever appertaining or reputed to appertain to the land or any part thereof….

 

(4) This section applies only if and so far as the contrary intention is not expressed in the conveyance…. "

 

34.

 

I refer to Section 62 as it is of the observation of Sir Nicholas Browne-Wilkinson VC in Kumar v Dunning [1989] 1 QB 193 at page 198:-

 

" The main intention of section 62 was to provide a form of statutory shorthand rendering it unnecessary to include such words expressly in every conveyance. It is a matter of debate whether, in the context of the section, the words "rights ... appertaining to the land" include rights arising under covenant as opposed to strict property rights. However, I will assume, without deciding, that rights under covenant are within the words of the section. Even on that assumption, it still has to be shown that the right "appertains to the land. " In my judgment, a right under covenant cannot appertain to the land unless the benefit is in some way annexed to the land. If the benefit of a covenant passes under section 62 even if not annexed to the land, the whole modern law of restrictive covenants would have been established on an erroneous basis. Section 62(1) replaces section 6(1) of the Conveyancing Act 1881. If the general words "rights ... appertaining to land" operate to transfer the benefit of a negative restrictive covenant, whether or not such benefit was expressly assigned, it would make all the law developed since 1881 unnecessary. It is established that, in the absence of annexation to the land or the existence of a building scheme, the benefit of a restrictive covenant cannot pass except by way of express assignment. The law so established is inconsistent with the view that a covenant, the benefit of which is not annexed to the land, can pass under the general words in section 62.

 

*199 Therefore, in my judgment, the plaintiff cannot rely on section 62 unless, at the least, he can show that the surety covenant touches and concerns the land so as to be capable of annexation, a point which I consider at (3) below. "

 

35.

 

This decision seems to me to be equally applicable to an attempt to pass the benefits of a covenant by Section 63 LPA 1925. I cannot see that it can be argued that the wording of the Conveyance which refers to an express assignment in any event is not a contrary intention for the purpose of Section 62 and Section 63.

 

36. The contrary was not argued before Morritt J (as he then was) in Sainsbury PLC v Enfield LVC [1989] 1 WLR 590 at page 595.

 

37. Further the point was not argued in the Crest or any earlier case so far as I am aware. If it had been successfully argued just as Browne-Wilkinson LJ observed in the Kumar case a large amount of the law relating to benefit of restrictive covenants would have been largely redundant.

 

38. In reality in my view the plain wording of the Conveyance is a sufficient contrary intention. It is possible to argue that the benefit of a restrictive covenant is a proprietary interest within Section 63. However the time for considering whether or not such an interest is a proprietary interest is at the time of the relevant conveyance to which Section 63 is intended to apply. By the time of the sale off which is the conveyance which Mr Hutchings seeks to pray in aid as operating to pass the benefit under Section 63 the relevant benefit of the covenant has ceased to be an interest in land. The reason for this is that the covenant was annexed to the land unsold and ceased to be annexed when it was sold. At the very occasion when Mr Hutchings seeks to rely upon as being the basis of the passing of the right is has ceased to exist as a right in land.

 

39. The true purpose of Section 63 is to deal with a situation where the grantor has a lesser estate than that which he purports to grant. In those circumstances the operation of Section 63 will pass whatever estate he actually has as opposed to what he purported to convey.

 

40. The provision was extensively considered by Lindsey J in the context of a break clause in a lease in Harbour Estates Ltd v HSBC Bank PLC [2005] Ch 194 , I respectfully agree with his analysis of the purpose of Section 63 in paragraph 30 and the following paragraphs of his judgment.

 

41. At paragraph 34 and following he referred to the arguments raised in respect of Section 62:-

 

"34 Mr Fetherstonhaugh's argument is thus based on a comparability with the unthinkable upset that would be caused if, by way of section 62, the benefit of a negative restrictive covenant passed without being mentioned with the land conveyed. Such a benefit is not a right "to" or "on" the property conveyed within section 63 but a right in relation to other land, the land afflicted with the burden of the covenant but it could, I would accept, be described as a right "in" the land conveyed. Mr Fetherstonhaugh is entitled to ask how could there have been a necessary debate in Kumar v Dunning [1989] QB 193 as to whether the benefit of a covenant passed with land under section 62, an argument rejected for want of the covenant touching and concerning the land, if, all along, it would have passed without any such annexation under section 63? Of course there are significant differences in many respects between restrictive covenants and other property rights but Sir Nicolas Browne-Wilkinson V-C was content, without further comment, to assume section 62 applied to covenants as it did to other property rights and, for my part, I cannot see how he could have done otherwise.

 

35 I confess to doubt as to the intended respective boundaries to section 62 and section 63. In some respects an overlap between the two seems possible. Thus section 62(1) and (2) refer to rights and advantages appertaining to the land conveyed and section 63 refers to "right" and "demand" (both in the singular) in, to or on the property conveyed. I am loth to require of section 63 that it can pass only that which in a technical sense is an appurtenance of, annexed to or is such as to touch and concern the property conveyed and it is certainly arguable that that is not so. Firstly, *211 section 63 makes no reference to any annexation, appurtenance or the "touching and concerning " test. Secondly, the draftsmen of the 1925 legislation, in the highest degree familiar with such tests, expressly refer to them at other points in the legislation where they are needed and can thus, it may be argued, be intended not to have required them with where they are not expressly incorporated-- compare, for example, section 62, section 84(1) (b), section 141 and section 142. Thirdly, the authorities on section 63, although mostly commenting only in passing (and perhaps dealing only, where section 63 applied, with instances where the interest or right in issue was manifestly appurtenant or annexed) at no point decide that any such test is required to be satisfied before the section can operate. Fourthly, I find it almost offensive to common sense, in the absence of any expressed contrary intention and where the property conveyed was the term of years in the lease, not to be able to regard the benefit of break clause in the lease as falling within the meaning of the words in section 63 as a "right ... in [or] to ... the property conveyed" given that, in the events which happened, the landlord had no power to withhold approval to an assignment of the break clause and that the benefit was thus a right which the assignor had power to convey. I would thus have been pleased to be able to have concluded that the benefit of the break clause, even if a right not touching or concerning the lease, had passed, wit h the help of section 63, to the defendants by way of the assignment as a right "in" the lease, notwithstanding that the assignment makes no express mention of such benefit. However what is, in my view, the insurmountable argument in Kumar v Dunning [1989] QB 193 bars such a conclusion. It is especially insurmountable as the Kumar case reasoning was approved by the House of Lords in Swift (P & A) Investments v Combined English Stores Group plc [1989] AC 632.

36 Moving from rights in, to or on the property conveyed to look at the requirements of "touching and concerning the land" in more detail, one encounters the dictum of Lord Oliver of Aylmerton in Swift (P & A) Investments v Combined English Stores Group plc [1989] AC 632, 642 , where he said:

"Formulations of definitive tests are always dangerous, but it seems to me that, without claiming to expound an exhaustive guide, the following provides a satisfactory working test for whether, in any given case, a covenant touches and concerns the land: (1) the covenant benefits only the reversioner for the time being and, if separated from the reversion, ceases to be of benefit to the covenantee; (2) the covenant affects the nature, quality, mode of user or value of the land of the reversioner; (3) the covenant is not expressed to be personal (that is to say neither being given only to a specific reversioner nor in respect of the obligations only of a specific tenant); (4) the fact that a covenant is to pay a sum of money will not prevent it from touching and concerning the land so long as the three foregoing conditions are satisfied and the covenant is connected with something to be done on to or in relation to the land."

 

37 I would not expect the touching and concerning test, applicable to both, to be different whether one is using it to test whether a burden passes with the reversion or a benefit with the term. If that is right then that first requirement, transposed, would be that the benefit of the break clause, if *212 separated from the term, would have to cease to be of benefit to the original lessee. I find that not to be the case. For example, if Stafford wished to assign the term to an assignee acceptable, indeed, irresistible under clause 11 of the lease but which had only recently been incorporated and was not a group company, such an assignee would not be able, on that account, to provide the three years' accounts required as a precondition of the landlord's consent. The assignment of the term could go ahead with the benefit of the break clause being expressed not to pass. The term would thus have become separated from the benefit of the break clause (assuming that the break clause could have a separate existence). In such a case, when, in time, the assignee's accounts could be produced and the landlord would then have no ground to refuse his approval to an assignment of the benefit, Stafford could, one might suppose, require a payment by the then lessee of a sum in order to procure Stafford to assign to that lessee the benefit of what could be or become the valuable right to terminate the lease.

 

42.

 

It is important to read Sir Nicholas Browne-Wilkinson VC's observations in Kumar in context. For the benefit of a covenant of pass he expressed the view that it would have to be shown that it touches and concerns the land so as to be capable of annexation.

 

43. I accept that the benefit of a restrictive covenant may be an interest in land if it touches and concerns the land in question for the purpose of Section 63. However there first has to be consideration whether if the interest in question is the benefit of a covenant it is something that touches and concerns the land. This throws one back to the wording of the Conveyance in my view. By the wording the Conveyance showed that the covenant touched and concerned the land for the time being that belonged to Mrs Hart that was unsold and thereafter if the benefit was expressly assigned. If on the occasion of the next sale off there is no assignment there is nothing upon which Section 63 can bite because there is no interest in land that is capable of being passed at that stage because Mrs Hart has plainly made a decision not to pass the benefit on. I do not see how Section 63 can be used to counter the express wording of the covenant.

 

44. This is equally important of course to the covenantor who covenanted in terms with Mrs Hart as long as she was owner and in favour of any subsequent assignee. I do not see how Section 63 can be used to effect the transfer of the benefit of the covenant in circumstances not contemplated between the original parties.

 

FENCING COVENANT

 

45.

 

Mr Hutchings submits that the existence of the fencing covenant and its obligation forever after to maintain shows that there was an intention to annex the benefit of that covenant and thus (presumably) all the other covenants to Mrs Harts land generally. The argument is based on an analysis of various provisions in the Conveyance. First, Mr Hutchings submits that the effect of covenant 2(ii) and 4(b) (the obligation to create a covenant on the land to the west of the Property) creates a scheme as between those properties. The existence of that scheme shows that it was intended that the covenant should annex to their respective properties and that therefore Mrs Hart cannot have intended to have obtained a sole control. It is submitted that without such a scheme Williams could not have obtained a benefit under clause 4 (b). I am not convinced as to that. It is quite likely that the draughtsman in the 1950's had in mind Section 56 of the LPA. I cannot see that the draughtsman intended to create a mini building scheme affecting two to the three plots of this very small development as a whole (a scheme in Alice's world in my view).

 

46. His second point as to evidence of intention is covenant 2 which is a fencing covenant. He acknowledges that the burden of the positive covenant does not run with the land see Rhone v Stevens [1994] 2 AC 310 but nevertheless submits that in effect the obligation to fence is in the nature of an easement relying upon Crow v Wood [1991] 1 QB 77. There needs to be he submits a dominant and servient tenement for an easement to exist. It follows therefore that the easement is a further indication that the parties intended there to be annexation of the benefit of the obligations.

 

47. This right rests uneasily as an easement because it casts a burden exceptionally upon the owner of the servient tenement to "put his hand in his pocket". The authorities (including Crow ) establish that it can be acquired by prescription customary use or grant see Megarry & Wade paragraph 18-211 and the citation of Sara "Boundaries and Easements" (second edition chapter 22).

 

48. I do not see how this assists the Defendants. First, I do not see how it can be argued that the wording of the second covenant in the Schedule creates an easement. It does not; it creates a covenant. I accept of course that the burden of the covenant cannot be enforced against successors in title generally. However that in the context of the fencing covenant may not provide a serious obstacle. It will prevent a claim for specific performance against a successor in title from the covenantor but the claim will lie in damages against the covenantor. If he has not obtained a chain of indemnity covenants he will be liable in damages for failing to honour his obligation. Normally the remedy for breach of covenant to repair would be damages. Specific performance would not be the usual remedy. There are problems with chains of covenants but that will have been well understood by the draughtsman of the conveyance in the 1950's. If he had wanted to create an express grant of an easement to repair he could easily have done so. The annexation of the benefit of the covenant on Mr Hutchings argument has no impact on the fencing covenant because the burden still will not run if it is a covenant.

 

49. The second difficulty is that Mr Hutchings is trying to find a general annexation arising out of the fencing covenant to apply to the first covenant. There is a difficulty however because the first covenant requires the plans to be approved by the vendor i.e. not her successors. Mr Hutchings argument is to split that covenant and have that requirement fall off when there is a subsequent sale. That to my mind would be unrealistic. First it changes the nature of the covenant radically and second it makes the covenant incapable of relaxation on application after the sale off. This is particularly damaging because the covenant as it is in the conveyance is subject to a proviso that the consent is not to be unreasonably withheld. Of course there would be no difficulty if there was an assignment. The assignee would have the benefits.

 

50. In fact this shows how it is correct to follow the Crest decision in this case.

 

51. Finally in the context of the fencing covenant he submits that the easement must have a dominant tenement ascertainable at the date of the conveyance or else no easement exists see London & Blenheim Ltd v Ladbrook Ltd [1994] 1 WLR 31 C.A. I do not see how that leads to his submission that the fencing covenant suggests that there was an intention to annex the benefit of all the covenants from the start. In the London & Blenheim case the purported reservation was to create a different piece of land as the dominant tenement. There is no question of dominant tenement changing in the case of the Property. The covenants are annexed as long as Mrs Hart holds the land or assigns the benefit of them. There is no new obligation which is foist on the covenantor. Indeed Mr Hutchings scenario would in my view create an obligation on the covenantor which is plainly contrary to the wording of the Conveyance.

 

52. Accordingly despite Mr Hutchings ingenious arguments I find that none of them persuade me that the case is distinguishable from the Crest decision. I accordingly determine that the covenants were only enforceable so long as Mrs Hart retained land unsold and then for the benefit of that land or alternatively if the benefit of the covenants was expressly assigned to a successor in title. This in my view accords with reality. Once Mrs Hart has fully developed the estate she has no interest in enforcing any of the covenants (including the fencing covenant).

 

53. As the land has all been sold by Mrs Hart and there has been no express assignment the Claimants are entitled to the declaration that they seek.