The theory of implied annexation of restrictive covenants revisited
| Author | Sampson Owusu |
| Position | Lecturer, Faculty of Law, University of the West Indies, Barbados |
| Pages | 71-109 |
THE THEORY OF IMPLIED ANNEXATION
OF
RESTRICTIVE COVENANTS REVISITED*
SAMPSON OWUSU"
A restrictive covenant may be enforced by
a
successor-in-title
to the
original covenantee only
if
the benefit
of
the covenant
has
passed
to
him under
the
rules
of
annexation, assignment
or
building schemes.
Annexation
is
effected
if
the
covenant
is
made "with ....the owners
or
owner
for
the time being
of..", or is
given
"for the
benefit
of...."1 a
specified plot
of
land retained
at the
time
of
the conveyance
by the
covenantee.
It is not,
however, absolutely necessary2
to use any
particular formula.
To
what extent, then, will
a
court
of
equity allow
circumstances falling short of an expressed intention to pass the benefit
of a covenant
to
particular land to be admitted in evidence? This is the
question addressed
in
this article.
It has been suggested3 that the benefit
of
a covenant may pass under
what
has
been classified
as
"implied annexation",
i.e.,
where
the
intention
to
benefit
or
annex
the
benefit
of a
covenant
to a
particular
plot
of
land
is
not indicated
in the
conveyance,
but
can be inferred
The writer acknowledges with heartfelt gratitude
the
assistance
and
contributions
he
received
in
developing this article from
Dr. G.
Woodman
of Birmingham University,
Prof.
Jill Martin
of
University
of
London,
Mr.
R.J. Smith, Fellow
of
Magdalen College, Oxford, Justice N.J.O.
Liverpool, Justice
of
the Court
of
Appeal
of
O.E.C.S., and his colleagues
at
the
Faculty
of
Law, University
of
the West Indies,
who
read
the
first
draft
of
this paper. He, however, accepts full responsibility
for all
errors.
Lecturer, Faculty
of
Law, University
of
the West Indies, Barbados.
1 Drake
v.
Gray [1936]
Ch.
451, 456. See also Rogers v. Hosegood [19001
2
Ch. 388 for
another formula,
and
Baker, "The Benefit
of
Restrictive
Covenants" (1968) 84 L.Q.R. 22, 24; and Elphinstone, "Assignment
of
the
benefit
of
covenants affecting land" [1952]
68
L.Q.R. 353, 357.
2 The view expressed
in
Marquess of Zetland
v.
Driver [1939]
1 Ch. 1, 8,
that "the fact that the covenant is imposed
for
the benefit
of
that particular
land should
be
stated
in the
conveyance and
the
persons
or the
class
of
persons entitled
to
enforce
it" has
been construed
in
Shropshire
C. C.
v.
Edwards [1982]
P. & C.R.
270, 275,
as
being "consistent with
it
being
a
highly desirable course,
but not
necessarily an essential requirement."
See
also Drake
v.
Gray [1936]
Ch.
451; Renals
v.
Cowlishaw (1878)
9 Ch.
125,
129,
and
Baker, op.
cit. n.l at
24.
3 See Megarry and Wade,
Law
of Real Property, London, Stevens
&
Sons
Ltd. 1984,
5th
edn., pp.784-785; H.W.R. Wade, "Covenants
- 'A
Broad
and Reasonable View'" [1972B] C.L.J.
157.
from the surrounding
circumstances.
This notion of implied annexation
has been questioned4 as being of doubtful validity, but is treated by
Megarry and Wade3 as one of two possibilities, in the absence of an
express provision, of establishing annexation. The other possibility is
discussed under the classification of "statutory annexation", which,
according text writers,6 is the effect of s.78 of Law of Property Act,
1925,
as applied in
Federated Homes
Ltd. v. Mill Lodge Properties
Ltd?
The scope of s.78 as providing automatic annexation has equally
been doubted by commentators,8 who conceive
Federated Homes
as
having turned on its peculiar facts and conclude that s.78 as construed
in
Federated Homes
does not have the effect of automatic annexation.
The doubt cast on the authority of
Federated Homes
by commentators
and the fact that it is a Court of Appeal decision make one feel that
the last word has not yet been said on the automatic annexation effect
of s.78. That is possibly why Megarry and Wade devote an equal
amount of space in their book9 to statutory, and the alternative
doctrine, implied annexation. Until the House of Lords gets an
4 Ryder, "Restrictive Covenants: the Problem of Implied Annexation" (1972)
36 Conv. (N.S.) 20; D.J. Hayton, "Restrictive Covenants as Property
Interests" (1971) 87 L.Q.R. 539; P.V. Baker, "The Benefit of Restrictive
Covenants" (1968) 84 L.Q.R. 22, 30; Elphinstone, op. cit. n.l.
5 The Law of Real Property, supra n.3 at 784. Gray, in the most recent
textbook on real property law, Elements of Land Law (London,
Butterworths, 1993, 2nd edn.) 1153, discusses the principle under a
subheading, implied annexation.
6 Megarry and Wade, op. cit. n.3 at pp.785-6; Cheshire & Burn's Modern
Law of Real Property, (London, Butterworths, 4th edn., 1988,)
pp.591-
593;
Gray, is not quite certain on this issue: "If the decision of
Federated
Homes Ltd. v. Mill Lodge Properties Ltd. is correct, it would seem to
follow that s.78(l) has the extraordinary effect of creating an automatic
annexation quite irrespective of the intentions of covenantor and
covenantee": Gray, op. cit. n.5 at pp.1154-1156.
7 [19801
1
W.L.R. 594. See also Bridges v, Harrow LBC (1981) 260 Estates
Gazette 284 at 290; [1982] Conv. 313; Re Herbert's Application [1982]
J.P.L. 112.
8 Sec,e.g., [1980] J.P.L. 371; [1981,] 97 L.Q.R. 32; [1981] J.P.L. 295;
(1982) 98 L.Q.R. 202 (G.H. Newsom); (1980) 43 M.L.R. 445 (D.J.
Hayton); [1980] Conv. 216; 130 N.L.J. 531 (T. Bailey); [1985] Conv. 177
(P.N. Todd).
9 The Law of Real Property, supra n.3 at pp.784-786. Gray, op. cit. n.5 at
pp.
1153-1154,
devotes two paragraphs to the treatment of "implied
annexation" and two pages for "statutory annexation".
opportunity to resolve this doubt, the alternative theory of "implied
annexation" will hold out a hope of a viable route of escape from the
technical rules of equity which insist on annexation for the
transmission of the benefit of a restrictive covenant. But the question
which
this
paper seeks to answer is whether there is any such principle
of "implied annexation".
The relevant provisions in a number of Commonwealth Caribbean
jurisdictions are in pari
materia
with s.58 of the
Conveyancing
Act,
1881 (U.K.),10 the precursor of s.78. Section 58 of the
Conveyancing
Act, 1881 was considered in the English Court of Appeal by Cozens-
Hardy M.R. in
Forster
v.
Elvet
Colliery
Co.
Ltd.11 as merely making
it possible for "words of limitation .... to be read into the covenants
assuming it to be one 'relating to land'".12 If Forster v. Elvet is
followed there will be no automatic annexation of restrictive covenants
in these Commonwealth Caribbean states.13
In the state of Tasmania, Australia,
s.71(l)
of
Conveyancing
and
Law of
Property
Act, 1884, merely enacts the conveyancing formula
whereby a covenantor undertakes to covenant with "his heirs,
executors, administrators and assigns." Before the enactment of s.58
of the
Coveyancing
Act,
1881,
the English courts did not consider this
formula in conveyances as having the effect of annexation.14 The
position in Tasmania and the Commonwealth Caribbean states such as
St Vincent and Antigua where there is no provision corresponding to
s.78 of Law of
Property
Act, 1925 or s.58, is that there will be no
automatic annexation of restrictive covenants.
There is a provision in many states in Australia similar to s.78 of
Law of Property Act, 1925,13 but the prevailing attitude of the legal
10 Conveyancing and Law of
Property
Act, 1987 Rev., Ch. 123 (Bahamas),
s.51;
Conveyancing Act, 1963 Rev., Cap 24 (Cayman Islands) s.61;
Conveyancing and Law of Property Act, 1958 Rev., Cap 68 (Grenada)
s.27; Conveyancing Act, 1973 Rev., Ch. 73 (Jamaica), s.61.
11 [1908] 1 K.B. 629, 635.
12 This provision was distinguished in Federated Homes by Brightman L J.
as "confined in relation to realty to the covenantee, his heirs and assigns,
words which suggest a more limited scope of operation than is to be found
in Section 78": supra n.7 at 604H.
13 See Newsom, "Universal Annexation?" [1981] 97 L.Q.R. 32, 39.
14 Renals v. Cowhshaw (1878) 9 Ch. 125.
15 Property Law Act, 1958(Victoria), s.78; Conveyancing Act, 1919-1969
(New South Wales), s.70, which is also in force in the Capital Territory
by virtue of
Conveyancing
and Law of Property Ordinance,
1951;
Property
Law Act, 1969 (Western Australia), s.47.
To continue reading
Request your trial