In Norwich City College of Further and Higher Education v McQuillan and anr, the college wanted to redevelop its campus. However, it was alleged that a covenant in a previous conveyance of part of the site would prevent redevelopment. The college therefore applied to the court under section 84 of the Law of Property Act 1925 for a declaration that the covenant was no longer enforceable by anyone.
Section 84(2) provides that the court has the power to declare whether freehold land is affected by a covenant, and/or whether the covenant is enforceable (and if so by whom).
The land had been acquired in 1936 from an estate owned by the Trafford family. The purchaser under the 1936 conveyance gave a number of covenants "for the benefit of the Trafford Estate at Lakenham or the part or parts thereof for the time being remaining unsold". The covenants were expressed to be with the "Vendor and his successors in title". In the schedule listing the various covenants, "Vendor" was defined as including "the Vendor and his successors in title the owner or owners for the time being of the part or parts of the Trafford Estate at Lakenham for the time being remaining unsold".
The conveyance did not clearly identify the precise extent of the Trafford Estate as at the date of the conveyance. However, it was clear that, by 1961, what remained of the Trafford Estate had been sold by the trustees of the settlement.
The college argued that the benefit of the covenants was annexed to the land owned by the original vendor at the date of the conveyance, but only while it remained owned by him or any subsequently appointed trustees of the Trafford Estate settlement. The defendant argued that the covenants were annexed to the land belonging to the original vendor as at the date of the conveyance - irrespective of whether or not it had subsequently been sold off.
The High Court found in favour of the college. The reference in the conveyance to the vendor's successors in title, and the words "for the time being" unsold, looked to the future. Those words were only necessary if the college's interpretation of the conveyance was correct. It was also natural for the original vendor to seek to retain the exclusive power to give or withhold consent to a modification or relaxation of the covenants without the need to get the consent of every subsequent purchaser to whom he had sold off parts of the Trafford Estate.
Since the remainder of the Estate had been sold off, there was no-one entitled to the benefit of the covenants and the college was entitled to a declaration under section 84(2).
Things to consider
When buying land, much attention is often focused on whether the burden of the covenants will pass to the purchaser. However, this case demonstrates that it is equally important to assess whether the benefit remains enforceable. This can be a difficult task, particularly if the document imposing the covenant does not clearly identify on a plan the land intended to be benefited by it. Nonetheless, this may be a worthwhile investigation for those embarking on redevelopment which may be in breach of a covenant.