Bath Rugby Ltd v Caroline Greenwood

The benefit of a pre-1926 restrictive covenant is annexed only where the conveyance manifests an intention to benefit identified land with conceptual certainty. The intention must appear from the conveyance, construed in light of the surrounding circumstances; it cannot be inferred from surrounding circumstances alone. Extrinsic evidence may identify the precise parcels once the conveyance supplies a sufficient description. In a covenant against nuisance to the neighbourhood, neighbourhood ordinarily defines the scope of breach. It does not identify particular properties for annexation. Descriptions of the vendor’s land as adjoining or near the conveyed land may satisfy the requirement. Later evidential difficulty concerns proof and enforceability, rather than whether annexation occurred.

Bath Rugby sought declarations under section 84(2) of the Law of Property Act 1925 that the Recreation Ground was free from restrictive covenants contained in a 1922 conveyance. The claim was opposed by 77 Great Pulteney Street Ltd and Godfrey White, who asserted that the benefit of the covenants had been annexed to nearby retained land.

HHJ Paul Matthews held that the covenant had been annexed to adjoining or nearby land of the vendor and his tenants, including the property of 77 Great Pulteney Street Ltd and Mr White: [2020] EWHC 2662 (Ch). A supplementary judgment addressed costs: [2020] EWHC 2856 (Ch). Bath Rugby and Bath Recreation appealed. The central issue was whether the 1922 conveyance sufficiently identified the land intended to receive the benefit of the covenant.

1. Disposition. The appeals were allowed on Ground (2). The 1922 conveyance did not identify, clearly or at all, the land intended to benefit from the restrictive covenant. The Court of Appeal would therefore declare that the covenant was not binding on Bath Rugby or Bath Recreation.
2. The burden of the covenant had passed to the appellants. Applying the principle in Tulk v Moxhay (1848) 2 Ph 774, the covenant was restrictive, protected retained land, was intended to bind the conveyed land and had been registered. The dispute concerned the transmission of the benefit, not the burden.
3. The benefit of a restrictive covenant passes by annexation only where the conveyance, construed in the light of the surrounding circumstances, manifests an intention to benefit identified land. The intention may be express or arise by necessary implication, but it cannot be inferred from surrounding circumstances alone. The conveyance must provide conceptual certainty, although extrinsic evidence may later identify the precise parcels.
4. The wording referring to nuisance or annoyance to “the neighbourhood” described the scope of the covenant and what might constitute a breach. It was not a conveyancing description of particular properties. The Court rejected the attempt to equate it with the reference in the drainage reservation to the vendor’s buildings and land adjoining or near the Recreation Ground. The latter was a description of land; “the neighbourhood” was not.
5. The Court followed the distinction illustrated by Renals v Cowlishaw (1879) 11 Ch D 866 and Ives v Brown [1919] 2 Ch 314. It was insufficient that the covenant was generally intended to benefit the vendor’s adjoining property. Defined land had to be identified so that the benefit could run with it.
6. Nugee LJ expressed obiter views on the separate requirement that benefited land be easily ascertainable. He considered that the question was fixed when the covenant was created and that later evidential uncertainty affected proof of entitlement, not annexation. Newey LJ, with King LJ agreeing, expressed doubt that this requirement was equivalent in practice to identifying land from other evidence. Those observations were unnecessary to the disposal.

1. Court of Appeal (Civil Division). Appeals by Bath Rugby Ltd and Bath Recreation Ltd allowed on Ground (2), with a declaration that the restrictive covenant was not binding on the appellants: [2021] EWCA Civ 1927.
2. High Court, Chancery Division. HHJ Paul Matthews held that the covenant was enforceable by 77 Great Pulteney Street Ltd and Godfrey White: [2020] EWHC 2662 (Ch). A supplementary judgment ordered indemnity costs and refused permission to appeal: [2020] EWHC 2856 (Ch).