University of East London Higher Education Corporation v London Borough of Barking & Dagenham & Ors

Restrictive covenants imposed on land conveyed for public educational purposes may benefit the statutory successors of the original housing authority where the conveyances, read in their historical context, show that intention. The benefit may pass by statutory transfer, and separate public authorities may enforce a single right of pre-emption jointly. A pre-emption covenant does not itself create an interest in land unless and until the right is triggered. Where dominant and servient land is held by the same public authority for different statutory purposes, unity of seisin does not extinguish restrictive covenants if extinguishment would defeat their purpose and prejudice statutory duties. The land may therefore be sold at full market value, subject to the right of pre-emption.

The claimant, University of East London Higher Education Corporation, owned the Barking Campus, formerly conveyed by the London County Council to Essex County Council for educational purposes. The conveyances contained user, building-approval and pre-emption covenants. The claimant wished to sell the campus for housing.

The London Borough of Barking and Dagenham and the London Borough of Redbridge claimed the benefit of the covenants as statutory successors to the London County Council. The court had to determine the identity of the beneficiaries and persons bound, the effect of statutory transfers, the price payable under the pre-emption covenant, and whether the covenants had been extinguished by unity of seisin.

1. Nature of the covenants. The user, approval and pre-emption provisions formed a single scheme directed to protecting the Becontree Estate, but they remained separate and freestanding covenants.
2. Beneficiaries and burden. On construction of the conveyances in their historical context, the benefit was confined to the London County Council and bodies to which its statutory housing functions and the Becontree Estate were transferred. Tenants and private owners on the estate were not entitled to enforce the restrictive covenants. The burden bound the statutory successors of Essex responsible for public education, but not ordinary purchasers, tenants or licensees.
3. Pre-emption. A contractual right of pre-emption did not create an interest in land because it had not been triggered: Pritchard v Briggs [1980] Ch 338. The pre-emption covenant could bind successors only under the applicable statutory vesting provisions. If exercised, the price was the full market value of the campus free from the user and approval covenants.
4. Statutory transfer. The relevant transfer provisions assigned the benefit of the restrictive covenants to LBBD and LBR in respect of the parcels transferred to them. The single right of pre-emption remained exercisable by LBBD and LBR jointly. The court also considered that the restrictive covenants were annexed to each part of the Becontree Estate under section 78(1) of the Law of Property Act 1925, applying Crest Nicholson Residential (South) Ltd v McAllister [2004] EWCA Civ 410.
5. Unity of seisin. The general rule requires unity of ownership and possession. The dominant and servient land was held by LBBD for different statutory purposes. Extinguishment would prejudice the performance of statutory duties and defeat the purpose of the covenants. The restrictive covenants therefore survived.
6. Conclusion. The covenants were valid and subsisting. Their benefit was vested in LBBD and LBR and their burden bound UEL. UEL could sell at full market value, but the sale triggered the joint right of pre-emption.