Norwich City College of Further and Higher Education v McQuillin & Anor

Restrictive covenants expressed to benefit an estate, or parts of it for the time being remaining unsold, benefit only land retained by the original vendor from time to time. Land subsequently sold off does not retain the benefit merely because it was unsold when the covenant was created. The court may grant a declaration under Law of Property Act 1925, section 84(2), where the covenant is no longer enforceable. Because such a declaration binds all persons entitled to the benefit, the court should make reasonable efforts to give every potential objector an opportunity to be heard.

The College sought a declaration under section 84(2) of the Law of Property Act 1925 that restrictive covenants in a 1936 conveyance no longer affected its campus land and were unenforceable by anyone.

The covenants were expressed to benefit the Trafford Estate at Lakenham, or parts of it for the time being remaining unsold. The College argued that this wording limited the benefit to land retained by the vendor and his successors from time to time. One defendant opposed the claim; the other ceased to defend it. The central issue was the proper construction of the benefit clause and whether any person remained entitled to enforce the covenants.

1. Procedure under section 84(2). The court may use section 84(2) of the Law of Property Act 1925 to obtain a declaration that a restriction is no longer enforceable and to clear title. The declaration operates in rem, so the court should make every reasonable effort to ensure that all persons who may wish to oppose it have an opportunity to be heard. The College’s extensive circular notification process was appropriate.
2. Construction of the benefit clause. The words making the covenants “for the benefit of the Trafford Estate at Lakenham or the part or parts thereof for the time being remaining unsold” referred to land remaining unsold from time to time. They did not preserve the benefit for land that had been sold after the 1936 conveyance.
3. The construction was supported by the future-looking reference to the vendor and successors in title, the wording of the positive fencing covenant, the vendor’s exclusive power to release, waive or alter the covenants, the definition of “Vendor”, and the factual context that the estate was being progressively sold for development.
4. The reasoning in Crest Nicholson Residential (South) Ltd v McAllister [2004] EWCA Civ 410; [2004] 1 WLR 2049 applied. The same commercial logic supported preserving the original vendor’s exclusive ability to modify or relax restrictions without obtaining consent from later purchasers.
5. No person remained entitled to the benefit of the covenants. The College was therefore entitled to the declaration sought.