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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Sugarman v Porter & Ors  EWHC 331 (Ch) (08 March 2006)
Cite as:  EWHC 331 (Ch)
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Strand, London, WC2A 2LL
B e f o r e :
| Lucille Nancy Sugarman
|- and -
|George Richard Porter
David Neil Creedon
Brighton Lions Housing Society Ltd
Matthew Hutchings (instructed by Richard Buxton) for the Fourth Defendant
Hearing dates: 16th February 2006
Crown Copyright ©
Peter Smith J :
SETTING OUT THE TITLE
"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."
"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."
"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."
"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."
"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 ..."
"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  EWCA Civ 782.
"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  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."
ASSIGNMENT BY SECTION 63 LPA 1925
"(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".
"(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…."
"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."
"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  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, with 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  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  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  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.