1. März 2022
Residential & rural - March 2022 – 1 von 3 Insights
'Twas four days before Christmas
And Lord Justice Nugee
Passed down a judgment
In favour of Bath Rugbee…'
Admittedly not a Christmas classic, but the outcome of a recent case is one that will please fans of Bath Rugby Club (Bath) and those with an eye of the development of The Rec, Bath's home since 1896.
Bath had sought to develop an area known as The Rec to include a replacement stadium and associated commercial amenities. The Rec is subject to a restrictive covenant from a conveyance dated 6 April 1922 which prevented anything being "erected, placed, built or done" on the land "which may be or grow to be a nuisance, annoyance or disturbance or otherwise prejudicially affect the adjoining premises or neighbourhood". Bath sought to remove the covenant on the basis that there was no-one that could be said to have the benefit of it.
Bath's application was opposed by a small number of adjoining homeowners, who argued that their properties had the benefit of the covenant as they were built on land which had previously formed part of the Bathwick Estate (out of which The Rec was transferred pursuant to the 1922 conveyance). As such, the covenant could not be removed and they were entitled to enforce it, thereby preventing the development which was contemplated.
The case reached the High Court, which found in favour of the adjoining landowners and refused to declare that the covenant contained within the 1922 conveyance was not enforceable by anyone. The High Court's view was that the doctrine of annexation meant that the covenant was still enforceable by any landowner with property on land which formed part of the Bathwick Estate at the time that the 1922 conveyance was entered into which was adjoining or near to The Rec.
Bath appealed to the Court of Appeal, which on 21 December 2021, confirmed a different view. Their appeal was successful on the ground that the 1922 conveyance did not identify the land intended to be benefited clearly (or at all).
The Court of Appeal held that there must be a 'sufficient indication' of the land intended to benefit from the covenant otherwise the covenant fails for uncertainty. It said that what was needed was "an intention that the covenant is taken for the protection of defined lands of the vendor so that it goes with the land to successive owners".
The Court of Appeal considered the wording of the covenant and decided that the reference to the 'adjoining premises or neighbourhood' was not a reference to the land which had the benefit of the covenant, but a reference to the area which may suffer a nuisance, annoyance or disturbance if the actions which took place in breach of the covenant were to occur. This reference is to a local area; it is not a reference to a specific property to which the benefit of the covenant was to be annexed.
The Court of Appeal was therefore willing to grant a declaration that there was no one who could claim the benefit of the restrictive covenant and so the development which Bath had planned could proceed without being in breach.
This case highlights the importance of clearly identifying land intended to have the benefit of a restrictive covenant and is something that agents and solicitors must take into account when agreeing heads of terms and drafting documents. If there is an insufficient description of the benefiting land, it may very well weaken any enforcement claim brought by the affected party.
Saying that does not help land which is subject to, or has the benefit of, restrictive covenants from historic conveyances, but there are various means by which you can identify what historic land might benefit from a covenant.
The first step is to consider the conveyance or other document transferring the land which is burdened by the covenant. There should be reference to a clearly defined piece of land (commonly referred to as the 'Retained Land') which has the benefit of the covenant. It may be that the definition is sufficient to identify the land – perhaps by reference to a plan attached to the transfer or with an address of a property.
If the terms of the transfer are not sufficient, then there are still means of identifying the land which benefits. If the transfer is of registered land, then the definition of the 'Retained Land' (or however it is described) may refer to the balance of the land in the title out of which the burdened land is transferred. Historic copies of registered titles can be obtained from the Land Registry – even if the title has been subsequently closed – so you can compare a copy of the title plan from the time that the transfer was entered into against the land which was transferred away.
If the transfer refers to land within a specific prior conveyance, then you may need to consult the unregistered title deeds for clarity. If these are not held, a copy might be available from HM Land Registry either registered against the land in question or from one of the surrounding titles.
Going forward, clarity remains key and must be remembered at all stages of a transaction to secure the enforceability of a restrictive covenant for the future.
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