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Lecture

4. Freehold & Statutory Covenants

8 Pages
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Department
Law
Course Code
JSB171
Professor
All

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Freehold Covenants Questions generally involving— • Enforceability of covenant • Ability of successors in title to covenantee enforce covenants • Liability of successors in title to covenantor to perform covenant = agreement made between owners of fee simple dealing with the use and development of the land • Freehold covenant takes effect as an equitable interest in the land o Torrens land owners enjoy indefeasible title: s184 LTA o not an exception to indefeasibility—no LTA provisions for registration • Distinguishable from easement and lease Categorisation • Positive covenants—requiring the covenantor to perform some act (eg to repair & maintain | To build a house or fence | To reconvey on a certain event | Not to let buildings fall into disrepair) • Negative covenants—restricting the covenantor’s use of the land (eg not to build above a certain height | not to erect building in particular place or at all | to keep land uncovered by buildings) 0. Covenantee v Covenantor • Contract law—privity of contract between covenantee & covenantor → enforceable • [BUT] If covenantee has sold land → no financial loss → no damages available in contract 1. Successor Covenantee v Original Covenantor (+ or -) • Whether a successor to a covenantee can enforce the C depends on whether there is annexation of the benefit of the C to the land: Smith & Snipes (Covenant for a public board to maintain the banks of the river “for all time”—sold land to Smith | leased to Snipes) • Elements— (Smith & Snipes) a. The covenant touches and concerns the land b. Benefited land identifiable c. Covenantee had legal estate d. Each plaintiff has legal estate e. Benefit intended to run with the land. • Not relevant whether— (Smith & Snipes) o Plaintiff & covenantee have same or different legal estate o Covenantor owns any land o Covenant is positive or negative o Covenant requires something to be done on the covenantee’s land or elsewhere a. Benefit T&C the land For a covenant to T&C land it must— (P&A Swift Investments) • Benefit to owner of the reversion • Affects the nature, quality, use or value • Not personal 1 (3) Freehold & Statutory Covenants Andrew Trotter LWB244 Property B • Eg—Improving drainage | prevent flooding | convert land from flooded land to agricultural  T&C land: Smith & Snipes (Covenant for a public board to maintain the banks of the river “for all time”—sold land to Smith | leased to Snipes) • It is not relevant that the covenant involves an action done away from the land which affects it: Smith & Snipes (acts to prevent flooding done on riverbed—not owned by Smith—but still affected the land  T&C land) b. Land Identifiable • Look to contract | or merely looking at the site c & d. Covenantee & Plaintiffs all have legal estates • Registered owners • Type of estate does not matter—includes a lessee: Smith & Snipes (Covenant for a public board to maintain the banks of the river “for all time”—sold land to Smith | leased to Snipes) e. Benefit intended to run with the land • Can be inferred from language used in the agreement, eg— o “for all time”: Smith & Snipes o for “present and future owners of the land” • In any case now implied by statute: s53(1) PLA A covenant relating to any land of the covenantee shall be deemed to be made with the covenantee and the covenantee's successors in title and the persons deriving title under the covenantee or the covenantee's successors in title, and shall have effect as if such successors and other persons were expressed. Effect of Indefeasibility • The enforcement of a covenant by a third party holder of benefited land does not infringe indefeasibility principles—same as any contract 2. Original or Successor Covenantee v Successor Covenantor (+) If covenant is positive, burden does not run at law or in equity: Tulk v Moxhay • ← Because land owner cannot contract to impose positive obligations on future land holders 3. Original Covenantee v Successor Covenantor (-) The burden will be enforceable if— (Tulk v Moxhay (T covenants “not to use for purpose other than garden”—sells to E—sells to M—M had notice  M bound by covenant)) • Negative covenant (restrictive in substance) o Any covenant requiring money to be spent is positive: Haywood v Bruswick PBS (covenant to repair  did not bind successor to covenantor) • Benefits land of covenantee o Covenantee must own the land which the covenant benefits: LCC v Allen (covenant not to build at end of the road—council did not own land at end of the road but may later want to acquire for developments  did not bind successor covenantor) o Land need not be adjacent but must be close enough to give a practical benefit: Clem Smith v Farrelly (covenant to carry out motor racing on land—land of covenantee 35 miles away  protected a business interest, not the land itself → not enforceable against successor covenantee) • Burden of covenant intended to run with the land o Implied by statute: ss53(2)&(3) PLA • 3 party purchaser of burdened land has notice (3) Freehold & Statutory Covenants 2 Andrew Trotter LWB244 Property B Effect of Indefeasibility • Previous approach—Covenantee has an equitable interest in a successor covenantor’s land: Norton v Kilduff (covenant that no floor be >3ft—privacy concerns—covenantee has pool  covenantee has equitable interest in covenantor’s land—but not registered—defeated by registration of third party interest: s184 LTA || case decided pre-s185(1)(b) in personam exception) • Restrictive covenant not on the register—prima facie defeated by indefeasibility of 3 party’s title: Norton v Kilduff o Not registrable (s4). o Exceptions—  Statutory covenants: s 97A LTA  Can be registered in a building management statement: s54A LTA o Not possible to register them indirectly as an easement: Norton v Kilduff • Covenantor must agree to be bound by the covenant—in personam: s185(1)(b); Ryan v Brain (restrictions on roof & floor height—concerns about sea view—successor covenantors on notice—did not agree to more extensive restrictions  not bound: s185(1)(b) LTA) 4. Successor Covenantee v Successor Covenantor (-) Covenant enforceable only if— • Satisfies the requirements in Tulk v Moxhay • Does not offend indefeasibility • The benefit has passed in equity Elements in Tulk v Moxhay The burden will be enforceable if— (Tulk v Moxhay (T covenants “not to use for purpose other than garden”—sells to E—sells to M—M had notice  M bound by covenant)) a. Negative covenant (restrictive in substance—if cannot breach by not doing anything) o Any covenant requiring money to be spent is positive: Haywood v Bruswick PBS (covenant to repair  did not bind successor to covenantor) b. Benefits land of covenantee o Covenantee must own the land which the covenant benefits: LCC v Allen (covenant not to build at end of the road—council did not own land at end of the road but may later want to acquire for developments  did not bind successor covenantor) o Land need not be adjacent but must be close enough to give a practical benefit: Clem Smith v Farrelly (covenant to carry out motor racing on land—land of covenantee 35 miles away  protected a business interest, not the land itself → not enforceable against successor covenantee) c. Burden of covenant intended to run with the land o Implied by statute: ss52(2)&(3) PLA d. 3 party purchaser of burdened land has notice Effect of Indefeasibility • Previous approach—Covenantee has an equitable interest in a successor covenantor’s land: Norton v Kilduff (covenant that no floor be >3ft—privacy concerns—covenantee has pool  covenantee has equitable interest in covenantor’s land—but not registered—defeated by registration of third party interest: s184 LTA || case decided pre-s185(1)(b) in personam exception) rd • Restrictive covenant not on the register—prima facie defeated by indefeasibility of 3 party’s title: Norton v Kilduff 3 (3) Freehold & Statutory Covenants Andrew Trotter LWB244 Property B o Not registrable (s4). o Exceptions—  Statutory covenants: s 97A(3)(c)(i) LTA  Can be registered in a building management statement: s54A LTA o Not possible to register them indirectly as
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