Under a building scheme, where restrictive covenants are imposed on the original plot owners within a development for the mutual benefit of the plots, subsequent owners may enforce those covenants against each other.
In this case, the owner of a plot argued that there was no building scheme because there was no clear evidence as to the extent of the original development and no clear statement in the original conveyances that a building scheme was intended.
A company called Birdlip Ltd owned a property known as Little Orchards and obtained planning permission to build two new dwellings on part of the land. The adjoining property, Ashlea, was owned by Mr. and Mrs. Hunter.
The title to both Little Orchards and Ashlea contained restrictive covenants against building, and it was accepted by Birdlip that if these were enforceable then they would not be able to implement the planning permission. However, Birdlip contended that the restrictive covenants were not enforceable.
Mr. and Mrs. Hunter argued that the two properties were part of a larger building scheme and that they were therefore entitled to enforce the covenants against Birdlip.
Birdlip issued two sets of proceedings: one in the High Court, for a declaration that the restrictive covenants were not enforceable, and one in the Upper Tribunal (Land Chamber) for a declaration that the restrictive covenants should be set aside.
The properties had originally been built pursuant to a 1910 conveyance, and there had been other sales of plots both before and after that time. The restrictive covenants in the various conveyances were not all in identical form and not all of the sales had plans attached. Of those that did have plans attached, not all showed the development with identical boundaries.
What is a Building Scheme?
If a scheme of development exists, restrictive covenants may be enforceable by owners of individual plots and their successors in title against others in the same development.
There must be reciprocity of obligations between plot owners, and an intention to create such reciprocity, and the area covered by the scheme must be clearly defined.
The conveyances of the various plot sales may be made at different times and need not contain identical wording but the idea is that these covenants are mutually beneficial for the owners of the development as a whole.
The court is entitled to take extrinsic evidence into account to establish whether, at the time of creation of the scheme, it was intended that the covenants would be for the common benefit of purchasers.
The High Court held that on the balance of probabilities there was a building scheme. The court found that there was a common intention for all purchasers of plots under the original scheme to benefit, and therefore their successors in title were also subject to and benefited from the covenants. The court also took into account other extraneous matters, such as the fact that previous residents of the estate had applied unsuccessfully to the Lands Tribunal to set aside the restrictive covenants, and evidence that plans may have been attached to conveyances which were no longer attached.
The fact that the intention to create a building scheme and the extent of the original development could not be definitively established by reference to the original conveyances – and may have changed slightly over subsequent years and sales of plots – did not bar the existence of a building scheme. However, it was crucial that the respondents were able to produce other evidence that a building scheme had been intended and that the covenants were intended to be for the mutual benefit of the plot owners.