Bath Rugby Ltd v Caroline Greenwood

The Court of Appeal considered whether a restrictive covenant in a 1922 conveyance over the Bath Recreation Ground had been annexed to identifiable land of the original covenantee so as to be enforceable by successors. The claim was brought under section 84(2) of the Law of Property Act 1925 for declarations that the land was free of the covenant. The High Court judge had held that the covenant was annexed to the vendor’s adjoining or nearby land and therefore enforceable by the owners of 77 Great Pulteney Street and others. The Court of Appeal allowed the appeal: it held that the 1922 conveyance did not sufficiently identify the land intended to be benefited (the expression "neighbourhood" was too imprecise for the required conceptual certainty) and therefore annexation was not established.

The court noted the statutory distinction for post-1925 covenants under section 78 LPA 1925 but confirmed that the present covenant, being pre-1926, had to be assessed by the traditional annexation rules. The court also recorded that other routes to benefit (assignment or building scheme) had been considered and rejected at first instance and were not successful on appeal.

This appeal concerned whether the benefit of a restrictive covenant in a conveyance of the Bath Recreation Ground dated 6 April 1922 was annexed to land of the original vendor (the Bathwick Estate) so as to be enforceable by third parties (notably the owners of 77 Great Pulteney Street). Bath Rugby Ltd, lessee of part of the Recreation Ground, sought declarations under section 84(2) Law of Property Act 1925 that the land was free of the covenant because there was no one entitled to the benefit. The Judge (HHJ Paul Matthews) at first instance concluded the benefit was annexed to the vendor’s adjoining or nearby land and therefore enforceable by certain owners; the judge also awarded indemnity costs and refused permission to appeal.

Path to this court: the decision of HHJ Paul Matthews is reported at [2020] EWHC 2662 (Ch) with a supplementary judgment at [2020] EWHC 2856 (Ch). Bath Rugby and the freehold owner Bath Recreation Ltd were granted permission to appeal to the Court of Appeal; the appeal was heard on 5 October 2021 and handed down 21 December 2021.

Issues for determination (framed by the court):

• Whether the benefit of the covenant had been annexed to identifiable land of the vendor in the 1922 conveyance (annexation is a question of intention and identification).
• Whether, as alternatives, the benefit had passed by assignment or under a building scheme.
• Whether the land intended to be benefited must be "easily ascertainable" and whether that test was satisfied.

Court’s reasoning and disposition:

• The court accepted that the burden of the covenant had passed (Tulk v Moxhay principles and registration), and that assignment and building scheme theories were not available on the facts.
• The decisive issue was whether the 1922 conveyance manifested an intention that the benefit should enure to particular land and whether that land was sufficiently identified. The conveyance used language referring to "the adjoining land or the neighbourhood" and earlier reserved easements for "the other buildings and land of the vendor and his tenants adjoining or near to the said hereditaments."
• The Court of Appeal concluded that the use of the term "neighbourhood" was not a sufficiently certain conveyancing description to identify the land intended to be benefited for annexation. Reading clause 2 back to clause 1 to identify the dominant land was insufficient because the covenant’s language was imprecise and could not supply the required conceptual certainty for annexation of the benefit to specific parcels.
• Because annexation was not established by the 1922 conveyance, the court allowed the appeal and indicated a declaration would be made that the restrictive covenant was not binding on the appellants. The court did not determine other hypothetical alternatives in detail and also commented on the scope and meaning of the "easily ascertainable" formulation used in earlier authorities.

Subsidiary findings and comments: the court emphasised the different position of post-1925 covenants under section 78 LPA 1925 but confirmed it was inapplicable here. The Court of Appeal limited its decision to Ground (2) (failure to identify the land) and did not make a final ruling on the precise effect of the phrase "successors in title" used in the conveyance; it also noted the first instance costs order would be affected by the substantive outcome.

Appeal allowed. The Court of Appeal held that the 1922 conveyance did not sufficiently identify the land intended to be benefited so as to establish annexation of the covenant’s benefit; language referring to the "neighbourhood" was too imprecise to meet the required conceptual certainty for annexation of a pre-1926 restrictive covenant. Other routes (assignment, building scheme) had been rejected at first instance and were not available.

Appeal from HHJ Paul Matthews (sitting as a High Court Judge, Business and Property Courts in Bristol (ChD)), judgments [2020] EWHC 2662 (Ch) and supplementary [2020] EWHC 2856 (Ch). Permission to appeal to the Court of Appeal was granted (Asplin LJ). The Court of Appeal heard the appeal and handed down judgment [2021] EWCA Civ 1927.