REAL PROPERTY II

WORKSHEET II
Restrictive Covenants

Objectives
At the end of this topic you should be able to:
(1) Identify the features of restrictive covenants;
(2) Apply the rules on restrictive covenants in equity and common
law;
(3) Discuss the rules governing the discharge of restrictive
covenants.
________________________________________________________________________
Kodilinye, CCPL, pp.125-153 (Chp.9)
Owusu, CCLL, pp.459-522 (Chp.11)

Restrictive covenants are contractual terms which restrict the use of land. Covenants are
promises made by deed and contractual terms that remain enforceable between the original
parties.

➢ Spencer’s Case (1853) 77 ER 72.

➢ Austerberry v Oldham Corp (1885) 29 Ch D 750

Purpose of restrictive covenants

Restrictive covenants preserve the saleable value and amenities of a neighbourhood, or a

particular property. These covenants may be imposed on land restricting its use e.g., where
A, the owner of Blackacre and Whiteacre sells Whiteacre (the ‘servient tenement’) to B,
he may require B to enter into certain restrictive covenants (e.g. not to carry on any trade
or business on Whiteacre; or not to erect more than one dwelling house on Whiteacre) so
as not to diminish the value of Blackacre (the ‘dominant tenement’) retained by him. Such
covenants remain binding between A and B personally (in contract), but the question may
arise:
(i) as to whether the burden of the covenants runs with Whiteacre (i.e. so as to bind
future purchasers/ successors-in-title of Whiteacre); and
(ii) as to whether the benefit runs with the title Blackacre (i.e. so as to be enforceable
by future purchasers/ successors-in-title of Blackacre).
In the event that the privilege claimed is an easement, there will be no issue as the servient
tenement would be bound. In circumstances where the covenant is included in a lease, the
covenant would run under the rule in Spencer’s case where the covenant touches and
concerns the land. However, generally a stranger to the contract can neither enforce nor
be bound by its terms based on the doctrine of privity of contract.

Original Original
Covenantee Privity of Contract Covenantor

Enforceable as a contract
Benefit Burden

Diagram 1

We must therefore examine the rules at common law and equity to see how the doctrine of
privity of contract has been relaxed in respect of restrictive covenants.

THE RULE AT COMMON LAW

(Burden)

The burden of a covenant made between a vendor and a purchaser does not run with the
fee simple at common law:

➢ Austerberry v Oldham Corp (1885) 29 Ch D 750

➢ Rhone v Stephens [1994] 2 WLR 429: Walford House and Walford Cottage were in common
ownership until 1960 when Walford cottage was sold. The Vendor covenanted to keep the common roof
which covered part of Walford Cottage in wind and water-tight condition. Both properties were sold after
1960. The question arose whether the covenant was enforceable against the new owners of Walford House.
Lord Templeman said (at 434):

“In the Austerberry case the owners of a site road covenanted that they and their successors in title would
make the road and keep it in repair. The road was sold to the defendants and it was held that the repair
covenant could not be enforced against them.

For over a hundred years it has been clear and accepted law that equity will enforce negative covenants
against freehold land but has no power to enforce positive covenants against successors in title of the land.
To enforce a positive covenant would be to enforce a personal obligation against a person who has not
covenanted. To enforce negative covenants is only to treat the land as subject to a restriction.
 Positive covenant: requires the covenantor to do some positive act on the burdened land
that would involve expenditure on the part of the covenantor for e.g. to maintain a road or
drains.

Note the following methods used to circumvent the common law rule:

In order to avoid the consequence of non-enforceability of positive covenants a number of

devices may be used.

• Create leases

The land may be leased instead of sold as freehold, so that the burden of the covenants
will run by privity of estate under the rule in Spencer’s case.

• Chain of indemnity covenants

An original covenantor remains liable to the original covenantee even after he has
transferred his interest in the land. He may protect himself by ensuring that the
purchaser of his interest enters into a covenant of indemnity with him when the land is
transferred. Each successive purchaser then enters into a similar covenant of indemnity,
thereby creating a chain of covenants. It should be noted that this device may not
always be successful, as the chain may be broken by the death or absence of the original
covenantor.

• Right of re-entry

A right of re-entry may be reserved in the conveyance which becomes exercisable on

events amounting to a breach of the positive covenant. The right of re-entry will run
with the burdened land but will be subject to the rule against perpetuities. Note that the
possibility of relief from forfeiture reduces the effectiveness of this device.

• Mutual benefit and burden-the rule in Halsall v Brizzell

A positive covenant may be enforced by the maxim “qui sentit commodum sentire debet
et onus”, “he who accepts the benefit must accept the burden”.

➢ Halsall v. Brizell [1957] Ch.169: it was held that since the covenant (to contribute to the cost to
maintain the roads and the sewers) was positive, it did not run with the burdened land at law or in equity.
However, because the defendant along with other owners used the road and other amenities, they had to
accept the burden of contributing to their upkeep.
➢ Rhone v. Stephens [1994] 2 W.L.R. 429: Halsall was agreed with and distinguished on the ground
that the condition (to maintain the road etc.) to be enforced did not exist independently and there were
 reciprocal benefits and burdens enjoyed by the users of the road and sewers. In Halsall, the defendants could
at least in theory choose between enjoying the right and paying their proportion of the cost or give up the
right and save their money. The element of reciprocal benefits and burdens was lacking from Rhone v
Stephens. In this case, the owners of Walford House could not in theory or practice be deprived of the benefit
of the mutual rights of support, the obligation to maintain the roof was treated as independent and its
enforcement would have the effect of derogating from the property rights and could not be enforced on the
principle in Halsall.

THE RULE IN EQUITY

(Burden)

➢ Tulk v Moxhay (1848) 2 Ph 774;(1848) 4 ER 1143: per Lord Cottenham at 777 the covenant
being one which does not run with the land, this court cannot enforce it, but the question is, not whether the
covenant runs with the land, but whether a party shall be permitted to use the land in a manner inconsistent
with the contract entered into by his vendor, and with notice of which he purchased.
➢ Luker v Dennis (1877) 7 Ch D 227.
The burden of a positive covenant does not run at equity. However, the burden of a
restrictive (i.e. negative) covenant between freeholders runs in equity. In Tulk v Moxhay,
the common law rule was radically modified by equity so far as negative covenants are
concerned. The effect of the equitable doctrine is that a covenant which is negative in
substance imposes an equitable burden upon the covenantor that is enforceable and the
duty to observe it will pass to the subsequent covenantors/ assignees/ successors in title,
except a bona fide purchaser for value of the legal estate without notice (actual or
constructive) of the covenant.

The earlier cases on this issue proceeded on the basis of notice. This has been critiqued as
being a limited approach, as the focus is upon the conscience of a third party acquiring the
covenantor’s land, instead of upon whether the land itself is affected. This approach will
exclude persons like squatters, who will enjoy an undeserved immunity from the
obligation. The judicial approach at the end of the nineteenth century focused on negative
easement and the fact that it touched and concerned the land, which gave it a “more real
and less personal flavour”.

There are now certain requirements that must be satisfied before the burden may be laid
upon an assignee of the servient tenement.

Conditions precedent for the running of the burden at equity

(i) The covenant must be negative in nature

In Trinidad and Tobago, s. 118 of the proposed Land Law and Conveyancing
Act 1981, seeks to enforce positive covenants if they affect freehold estates.
 ➢ Haywood v. Brunswick Permanent Benefit Building Society (1881) 8
Q.B.D.403
➢ Tulk v Moxhay(1848) 41 ER 1143.
➢ Rhone v. Stephens [1994] 2 W.L.R. 429

It is essential that the covenant should be negative in substance. In every case it

is the substance and not the form of the contract that must be regarded, for if an
“undertaking though couched in affirmative terms, clearly implies a negative, it
will be caught by the doctrine of Tulk v Moxhay. In that case, the covenant was
not phrased in a restrictive form, but its provision that the piece of ground was
to be used only as an ornamental garden implied a prohibition against building.

(ii) The covenant must at the time of its creation be made for the protection of
other land retained by the covenantee:

“A restrictive covenant taken from a purchaser of a freehold estate is a mere

covenant in gross personal to the contracting parties, unless it imposes an
equitable burden upon the covenantor’s land for the protection of land owned by
the covenantee. Equity acting on the analogy of a negative easement, will not
regard a restrictive covenant as other than personal unless there is the relation of
dominancy and serviency between the respective properties”: see Chesire and
Burn’s Modern Law of Real Property.

If a covenantee retains no adjacent land or owns no land capable of benefitting

from the covenant, the covenant cannot be enforced against a person other than
the original covenantor, even if the person has notice.
➢ London CC v Allen [1914] 3 KB 642
➢ Re Gadd’s land Transfer [1966] Ch
➢ Half Moon Bay v. Crown Eagle Hotels Ltd. (2002) 60 W.I.R. 330

(iii) The covenant must touch and concern the dominant tenement
To satisfy this condition in the case of freehold land, “the covenant must either
affect the land as regards mode of occupation, or it must be such as per se, and
not merely from collateral circumstances, affects the value of the land”:
➢ Rogers v Hosegood [1900] 2 Ch 388 at 395.
(iv) It must be the common intention of the parties that the burden of the
covenant shall run with the land of the covenantor
This intention may appear from the words used in the covenant, for instance it
may be stated to be made for himself, his heirs and assigns. However, with
statutory intervention all conveyances are deemed to have been made not only
with covenantor, but also with all his successors in title; the effect is that a
 covenant in a conveyance is presumed to run with land and is not a personal
covenant.

Conveyancing and Law of Property Act, 2000, Ch. 138 (Bahamas), s.47;
Property Act, 1979-1981, Cap. 236 (Barbados) s.84;
Law of Property Act, 2000, Cap.190 (Belize), s.62;
Conveyancing Act, 1983, ¹16 (Bermuda), s.22;
Conveyancing and Law of Property Act, 1991, Cap.220 (British Virgin Islands),
s.29; Conveyancing and Law of Property Act, 1990, Cap 54:01 (Dominica), s.29;
Conveyancing and Law of Property Act, 1990, Cap.64 (Grenada), s.28;
Conveyancing Act, 1973, Ch. 73 (Jamaica), s.62;
Conveyancing and Law of Property Act, 1962 , Cap.250 (Montserrat), s.29;
Conveyancing and Law of Property Act, 1961, Cap.271 (St. Christopher [St. Kitts]
and Nevis), s.29;
Conveyancing and Law of Property Act, 1950, Ch. 27, No.12 (Trinidad and
Tobago), s.29; Land Law and Conveyancing Act, 1981, No.20 (proposed legislation
of Trinidad and Tobago), s.113.
The provisions in Bahamas, Grenada and Jamaica are narrow in scope. It makes no
mention of assigns and seems to be restricted to heirs, administrators and executors
of the covenantor.

➢ Sefton v Tophams [1967] AC 50

Note
Persons bound by restrictive covenants:
A restrictive covenant is enforceable against the successors in title of the original
covenantor, including a mere occupier of the land.
➢ Mander v Falcke [1891] 2 Ch 554

The effect of registration

In circumstances where the grant is registered the covenantor may be deemed to have notice
of the covenant.

THE REQUIREMENTS FOR RUNNING OF THE BENEFIT

(At Common Law)

The covenantor is liable to the successors in title of the covenantee merely because of the
covenant he has made, not because of his relationship to any servient tenement.

➢ Smith and snipes v Hall [1949] 2 All ER 179.

The benefit of both positive and negative covenants runs:

➢ Sharp v Waterhouse (1857) 119 ER 1449

The benefit of a covenant between freeholders, unlike the burden, is capable of running at
common law, provided that certain conditions are fulfilled:

(i) Covenant must touch and concern the land;

➢ Rogers v Hosegood [1900] 2 Ch 388 at 395
(ii) There must be an intention (at the time of making the covenant) to benefit the
land owned by the covenantee;
➢ Rogers v Hosegood [1900] 2 Ch 388 at 396

(iii) The covenantee (at the time of making the covenant) must have the legal estate
in the land which is to be benefited;
➢ Webb v Russell (1789) 3 Term Rep 393
(iv) The assignee of the covenantee must have the same legal estate in the land as the
original covenantee in order to claim the benefit. As such, where the original
covenantee held a fee simple, a successor in title who obtained a fee tail or life
estate or term of years cannot enforce the covenant. This position applies to
Grenada, Jamaica, Bahamas, St Vincent and Antigua.

The common law position has been modified by Statute in the following
jurisdictions:
Barbados
Bermuda
Dominica
St. Christopher, St. Kitts and Nevis, Anguilla
Trinidad and Tobago (see section 28 (1) of the CPLA and s. 112 of the proposed
legislation.
The relevant sections define “successor in title” to include owners and occupiers
of the land of the covenantee.

Note that if the assignee of the covenantee can establish the aforementioned conditions the
benefit will pass to him under the common law. However, there are limits to the common
law and where these circumstances arise equitable rules must be relied on for the benefit
to run:

(a) Where the covenantee or the assignee are merely equitable owners of the land
benefited;
➢ Fairclough v Marshall (1878) 4 Ex D 37
(b) Where the covenantor is no longer the owner of the servient tenement, but has
assigned it, so that enforcement against the assignee of the servient tenement
depends upon the rule in Tulk v Moxhay;
(c) Where only part of the benefited land is assigned to the claimant, since at common
law the benefit cannot be assigned in pieces;
➢ Re Union of London and Smith’s Bank Ltd’s Conveyance, Miles v Easter
[1933] Ch 611 630, per Romer LJ)
(d) Where the claimant relies upon his land being part of a scheme of development.

(POSITION IN EQUITY)

Benefit

In order to establish that the benefit of a covenant has run in equity, the claimant must show
that there has been:

(a) Annexation of the benefit to the dominant land; or

(b) Express assignment of the covenant; or
(c) A scheme of development.

(a) Annexation

The fact that the covenant touches and concerns land is not sufficient to establish
annexation. There must be evidence that the covenant was intended to enure for the benefit
of the claimant’s land. This must be gleaned from the language used in the deed creating
the covenant

It should be noted that a covenant made with “the vendors their heirs executors
administrators and assigns” is not effective for the purposes of passing the benefit. The
use of the words “assigns” merely makes the covenant assignable.

• Formula for annexation

An Express formula must be used, e.g. covenant is made “with X, owner for the
time being of Blackacre” or “for the benefit of Blackacre.”
In Rogers v. Hosegood [1900] 2 Ch. 388, 404 the formula which was accepted to
establish annexation was in these terms:

“with intent that the covenant may enure to the benefit of the vendors, their successors
and assigns and others claiming under them to all or any of their lands adjoining.”

➢ Half Moon Bay Ltd. v. Crown Eagle Hotels Ltd. (1996) SC Jam.,
unrep);
➢ Jamaica Mutual Life v. Hillsborough [1989] 1 WLR 1101.
➢ Rogers v. Hosegood [1900] 2 Ch. 388, 404
➢ See: Drake v Gray [1936] 1 All ER 363, 377 per Greene LJ;
➢ Renals v Cowlishaw (1878) 9 Ch D 125;
➢ Pass v Ramsahoye (1986) High Court Barbados, No 231 of 1986
(unreported) Carilaw BB 1986 HC 41.
• The dominant land must be ascertainable
The exact land to which the parties intend to annex the benefit of the covenant must
be ascertainable. The dominant land must be clearly identified in the conveyance.
• Annexation to the whole of covenantee’s land
In circumstances where the language of the covenant indicates an intention to annex
the benefit of the covenant to the whole of the land of the covenantee, that
annexation will not be effective unless substantially the whole of the land is capable
of benefiting:
Re Ballard’s Conveyance

Implied annexation

Jamaica Mutual Life Assurance Society v Hillsborough Ltd [1989] 1 WLR 1101

In the aforementioned case there were no express words in the conveyance to the
covenantor stating that the restrictive covenants contained therein were intended for the
benefit of any land retained by the covenantee. The Jamaican Court of Appeal held that
annexation could be implied from the surrounding circumstances. However, on appeal to
the Privy Council, the Board held that since there were no express words confirming that
the restrictions were intended for the benefit of any land retained by the covenantee, there
was no annexation of the covenants.

Statutory annexation

LPA 1925, s.78, (UK); Cap 236, s83 (1) (B’dos) and equivalents may have
the effect of automatically annexing the benefit of a covenant to the land,
unless a contrary intention is expressed (see: Federated Homes Ltd. v. Mill Lodge
Properties Ltd. [1980] 1 All E.R. 371).
 Covenant with the vendor and with “his heirs and assigns” - Bahamas,
Grenada and Jamaica
“(1) A covenant relating to land of inheritance, or devolving on the heir
as special occupant, shall be deemed to be made with the covenantee,
his heirs and assigns, and shall have effect as if heirs and assigns were
expressed.
(2) A covenant relating to land not of inheritance, or not devolving on
the heir as special occupant, shall be deemed to be made with the
covenantee, his executors, administrators, and assigns, and shall have
effect as if executors, administrators, and assigns were expressed.”

Conveyancing and Law of Property Act, 2000,, Cap.138 (Bahamas)

s.46; Conveyancing and Law of Property Act, Cap.68 (Grenada), s.27;
Conveyancing Act, 1973 Rev., Cap.73 (Jamaica), s.61.

Covenant with the vendor and “his successors in title”:- Anguilla,

Barbados, British Virgin Islands, Belize, Dominica, Montserrat, St Kitts
and Nevis, and Trinidad and Tobago. It provides:
“(1) A covenant relating to any land of the covenantee is deemed to be
made with the covenantee and his successors in title and the persons
deriving title under him, or them and has effect as if such successors
and other persons were expressed.
(2) For the purposes of this section, and of sections 84 and 85,
“successors in title” include the owners and occupiers for the time
being of the land of the covenantee intended to be benefited.
The corresponding provision in England is s.78 of L.P.A., 1925.
Federated Homes Ltd. v. Mill Lodge Properties Ltd. [1980] 1 WLR 594
Crest Nicholson Residential (South) Ltd. v. McAllister [2004] 1 W.L.R.
2409.

Assignment of benefit - note rule in Miles v. Easter [1933] Ch.611

Note: Area to be benefitted

Re Ballard’s Conveyance [1937] 2 All ER 691
Marquess of Zetland v Driver [1938] 2 All ER 158.
Re Jeff’s Transfer (No 2),
Russell v Archdale [1962] 2 All ER 305
Re Selwyn’s Conveyance [1967] 1 All ER 339

EXPRESS ASSIGNMENT
Re Union of London and Smith’s Bank Ltd’s Conveyance, Miles v Easter [1933] Ch 611:

SCHEMES OF DEVELOPMENT

Building Scheme - (Scheme of Development) arises where land is laid out in lots and sold
to different purchasers, each of whom enters into restrictive covenants with the common
vendor. Such covenants are taken for the benefit of the whole estate, and the rule is that
each purchaser and his assignees can sue and be sued by every other
purchaser and his assignees for a breach of the covenants.

Old formula
Elliston v. Reacher [1908] 2 Ch. 374
Baxter v. Four Oaks Properties Ltd, (1965) Ch. 816.
Re Dolphin’s Conveyance, [1970] 1 Ch.654.

The new formula of common intention

Lamb v. Midac Equipment Ltd. Privy Council Appeal No. 47 of 1997, [1999] J.C.J.
No. 4.
Jamaica Mutual Life Assurance Society v. Hillsborough and Others [1989] 1 W.L.R.
1101
Nottingham Patent Brick and tile Company v. Butler 16 Q.B.D. 778.
Emile Elias Ltd. v. Pine Groves Ltd. [1993] 1 WLR 305.

ACCEPTANCE OF BUILDING SCHEME OBLIGATIONS

Hodges v. Jones [1935] 1 Ch. 657, 669.
Osborne v. Bradley [1903] 2 Ch. 446
Spicer v. Martin (1882) 14 App. Cas. 12
Spicer v. Martin (1882) 14 App. Cas. 12

A registered covenant and acceptance of building schemes

Re Wembley Park Estate Co. Ltd.’s Transfer. [1968] Ch. 491
Wille v. St. John, [1910] 1 Ch. 325, 327, 328

DISCHARGE AND MODIFICATION

Under statute restrictive covenants may be discharged or modified on grounds of :

(a)obsolescence;
(b) impeding reasonable user of land;
(c) agreement;
(d) no injury to objectors.

Registered Land Act, Cap.374 (Antigua and Barbuda), s.97, Registered Land Act,
2000,
Cap.194 (Belize), s.99, Restrictive Covenants (Discharge and Modification) Law, 1960
(Jamaica), s. 3(1); Land Restrictions (Discharge and Modification) Act, 1967, No. 10
(Barbados), s.2(1), (e.g. s.196 (1) of Property Act, Cap. 236 (Barbados). The statute
provides:
“(a) that by reason of changes in the character of the property or the neighbourhood or
other circumstances of the case which the Judge may think material, the restriction
ought to be deemed obsolete; or
(b) that the continued existence of such restriction or that the continued existence thereof
without modification would impede the reasonable user of the land for public or
private purposes without securing to any person practical benefits sufficient in nature
or extent to justify the continued existence of such restriction, or, as the case may be,
the continued existence thereof without modification; or
(c) that the persons of full age and capacity for the time being or from time to time
entitled to the benefit of the restriction whether in respect of estates in fee simple or
any lesser estates or interests in the property to which the benefit of the restriction is
annexed, have agreed, either expressly or by implication, by their acts or omissions,
to the same being discharged or modified; or
(d) that the proposed discharge or modification will not injure the persons entitled to the
benefit of the restriction."

CHANGES RENDERING RESTRICTIONS OBSOLETE

Re Lots 12 and 13 Fortlands (1969) 15 W.I.R. 312
Stephenson v Liverant (1972) 18 WIR 323

REASONABLE USER IMPEDED BY THE RESTRICTION

Stannard v. Issa (1986) 34 W.I.R. 189.
Re Constant Spring and Norbrook Estate (1960), 3 W.I.R. 270
Re Systems Sales Ltd.’s Applications (1992) 43 W.I.R.19

COVENANT NOT CONFERRING BENEFIT

Re Landfall ex parte Lawson & Ryan (1970) 17 W.I.R. 178

AGREEMENT TO HAVE A RESTRICTIVE COVENANT DISCHARGED

Re Federal Motors Ltd., (1965) 9 W.I.R. 375, 381
Re University of Westminster, University of Westminster v. President of the Lands
Tribunal [1998] 3 All E.R. 1014, 1023

NO INJURY TO PERSONS ENTITLED TO THE BENEFIT OF THE COVENANT

McMorris v. Brown. [1999] 1 A.C. 142
 Tutorial Questions

(1) In 2015 Mandy acquired the fee simple estates in two adjacent
properties, Whiteacre and Blackacre. There was a house on Whiteacre, in
which Mandy lived, while Blackacre was an open field.

In 2017, Mandy built two houses on Blackacre and sold them to Priscilla and
Theresa respectively, each purchaser entering into covenants:
(a) not to use her house for any commercial purpose; and
(b) to contribute to the cost of maintaining the private road connecting
Whiteacre and Blackacre to the highway.

In 2019, Mandy sold Whiteacre to Ursula, with the benefit of the covenants.
In 2020, Priscilla and Theresa sold their properties to Cynthia and Daphne
respectively, the conveyances containing no reference to the covenants.
Ursula has just discovered that Cynthia does not live in her house but has
rented it to tourists. Daphne refuses to pay any contribution to the cost of
maintaining the private road.

Advise Ursula.

(2) Consider critically, and with reference to decided cases, the grounds upon
which a discharge or modification of a restrictive covenant may be obtained
in Barbados or Jamaica.