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THE DOCTRINE OF BENEFIT AND BURDEN: REFORMING THE LAW OF COVENANTS AND THE NUMERUS CLAUSUS “PROBLEM”

  • Chris Bevan
Abstract

The doctrine of benefit and burden – an indirect method for enforcing the burden of positive freehold covenants – developed as an exception the strict Austerberry rule that the burden of positive covenants cannot bind successors directly at law. Three recent Court of Appeal cases (Davies v Jones; Wilkinson v Kerdene and Elwood v Goodman) confirm the continued existence and application of the doctrine but also reveal its deficiencies and limitations. This article explores the contemporary application of the doctrine, identifies its theoretical, historical and elemental frailty and, drawing on recent reform proposals of the Law Commission, highlights the case for reform. In so doing, this article argues that a vital theoretical issue has been overlooked in the reform debate: the numerus clausus principle.

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*Address for Correspondence: Nottingham School of Law, University of Nottingham, University Park, Nottingham NG7 2RD. Email: Christopher.Bevan@nottingham.ac.uk.
References
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1 Law Commission, Easements, Covenants and Profits à Prendre: A Consultation Paper (2008) (Law Com. Report No. 186).

2 Pakenham's Case (1369) Y B 42 Edw III Hil, pl 14, f 3; see Simpson, A.W.B., A History of Land Law, 2nd ed. (London 1986), 116–18.

3 Tulk v Moxhay (1848) 2 Ph. 774, 41 E.R. 1143.

4 Austerberry v Oldham Corporation (1885) 29 Ch. D. 750.

5 Keppell v Bailey (1834) 2 My. & K. 517, 39 E.R. 1042.

6 Austerberry v Corporation of Oldham (1885) 29 Ch. D. 750; see also Haywood v The Brunswick Permanent Benefit Building Society (1885) 8 Q.B.D. 403.

7 Rhone v Stephens [1994] 2 A.C. 310; [1994] 2 All E.R. 65.

8 Wade, H.W.R., “Covenants – a Broad and Reasonable View” [1972] C.L.J. 157, at 158.

9 Gray, K. and Gray, S. F., Elements of Land Law, 5th ed. (Oxford 2009), [3.3.35].

10 Halsall v Brizell [1957] Ch. 169; [1957] 1 All E.R. 371; see C. Davis, “The Principle of Benefit and Burden” [1998] C.L.J. 522.

11 Davies v Jones [2009] EWCA Civ 1164; [2009] All E.R. (D) 104.

12 Wilkinson v Kerdene [2013] EWCA Civ 44; [2013] 2 E.G.L.R. 163.

13 Elwood v Goodman [2013] EWCA Civ 1103; [2013] 4 All E.R. 1077.

14 See Megarry and Wade. Harpum, C., Bridge, S. and Dixon, M., Megarry & Wade: The Law of Real Property, 8th ed. (London 2012).

15 On which see generally J. Snape, “The Burden of Positive Covenants” [1994] Conv. 477; Gravells, N., “Enforcement of Positive Covenants Affecting Freehold Land” (1994) 110 L.Q.R. 346 .

16 Rhone [1994] 2 A.C. 310, 321, per Lord Templeman.

17 See discussion in Law Commission, Making Land Work: Easements, Covenants and Profits à Prendre (Law Com. Report No. 327), at [5.12]–[5.16].

18 Other methods include the use of leasehold title; a chain of indemnity covenants; estate rentcharges and commonhold.

19 Law Commission, Appurtenant Rights (1971) (Law Com. Report W.P. No. 36), at [31]–[35].

20 Report of the Committee on Positive Covenants Affecting Land (London: HMSO 1965), Cmnd. 2719; Law Commission, Restrictive Covenants (1967) (Law Com. Report No. 11); Law Commission, Appurtenant Rights; Law Commission, Positive and Restrictive Covenants (1984) (Law Com. Report No. 127); Report of the Aldridge Working Party on Commonhold (1987) Cm. 179; Lord Chancellor's Consultation Paper on Commonhold (1990) Cm. 1345.

21 Law Commission, Positive and Restrictive Covenants.

22 Halsall [1957] Ch. 169; [1957] 1 All E.R. 371.

23 In the event, the contribution was held to be void on the basis that it represented more than a “due and just proportion” of the upkeep of the facilities: Halsall [1957] Ch. 169, 183–84, per Upjohn J.

24 Ives v High (1967) 2 Q.B. 379.

25 Ibid., at pp. 394, 400.

26 Gray and Gray describe the “expanding universe” of the doctrine in its early development: Elements of Land Law, para. [3.3.35].

27 Tito v Waddell (No. 2) [1977] Ch. 106; [1977] 3 All E.R. 129, on which see generally F. R. Crane (1977) 41 Conv. (NS) 210; E.P. Aughterson, “Enforcement of Positive Burdens-A New Viability” [1985] Conv. 12.

28 Tito [1977] Ch. 106, 290.

29 Ibid., at p. 302.

30 On which see Aughterson [1985] Conv. 12, at 16.

31 Rhone [1994] 2 A.C. 310; [1994] 2 All E.R. 65; on which see L. Tee, “A Roof Too Far” [1994] C.L.J. 423, at 446; Jones, A., “Thinking Positively about the Law of Covenants?” (1994–5) 5 K.C.L.J. 136 ; Snape, J., “The Benefit and Burden of Covenants – Now Where Are We?” (1994) 3 Nott.L.J. 68 .

32 Rhone [1994] 2 A.C. 310, 322.

33 Thamesmead v Allotey [1998] EWCA Civ 15; (1998) 30 H.L.R. 1052.

34 Davies [2009] EWCA Civ 1164; [2009] All E.R. (D) 104.

35 Ibid., at para. [6].

36 Ibid., at para. [27].

37 Patten L.J. in Elwood [2013] EWCA Civ 1103; [2013] 4 All E.R. 1077.

38 Wilkinson [2013] EWCA Civ 44; [2013] 2 E.G.L.R. 163, at [28].

39 Elwood [2013] EWCA Civ 1103; [2013] 4 All E.R. 1077, at [16].

40 Ibid., at para. [28].

41 Elwood [2013] EWCA Civ 1103; [2013] 4 All E.R. 1077, at [37]–[40].

42 See Child, J., “The Demise of Pure Principles” (2010) 243 P.L.J. 1415 .

43 See Davis, “The Principle of Benefit and Burden”; Gray and Gray, Elements of Land Law.

44 Tito [1977] Ch. 106, 289, per Megarry V-C.

45 Ibid., at p. 290.

46 Ibid.

47 See Broom, H., Broom's Legal Maxims, 10th ed. (London 1939), 482–86.

48 Halsall [1957] Ch. 169, 180.

49 Ibid., per Upjohn J., citing Norton, R.F., A Treatise on Deeds: Norton on Deeds, 2nd ed. (London 1928), 26 .

50 Elliston v Reacher [1908] 2 Ch. 665, 669.

51 Aughterson, E.P., “In Defence of the Benefit and Burden Principle” (1991) 65 A.L.J. 319 .

52 Ibid.

53 Harpum et al., Megarry & Wade, p. 1388, at [32-026].

54 Government Insurance Office (N.S.W.) v K.A. Reed Services Pty. Ltd. [1988] VicRp 75; [1988] V.R. 829.

55 Calabar Pty. Ltd. v Ampol Pty. Ltd. (1990) 71 N.T.R.

56 Clifford v Dove [2003] NSWSC 938; 11 BPR 21,149; [2004] ALMD 4806.

57 Ibid., at p. 67.

58 Tito [1977] Ch. 106, 295, per Megarry V-C.

59 See in particular Jones v Kernott [2011] UKSC 53 and discussion of Stack v Dowden [2007] UKHL 17 in M. Dixon, “The Never-Ending Story: Co-Ownership after Stack v Dowden” [2007] Conv. 456.

60 S. Gardner, “Two Maxims in Equity” [1995] C.L.J. 60.

61 On the maxims, see Gummow, W.M.C. and Lehane, J.R.F., Equity-Doctrines and Remedies, 3rd ed. (Sydney 1992), ch. 3; Jackson, P., “The Maxims of Equity Revisited” in Goldstein, S. (ed.), Equity and Contemporary Legal Developments (Jerusalem 1992); Pound, R., “On Certain Maxims of Equity” in Winfield, P.H. and McNair, A.D. (eds.), Cambridge Legal Essays (Cambridge 1926), 259 . Pound suggests that the maxims greatly assisted in the development of equity in the US, where it was regarded with suspicion. Their (frequently spurious) antiquity and so authority enabled the results to appear as true law, rather than as the personal opinions of individual judges, whilst in practice their lack of determinacy gave scope for judicial innovation.

62 Salmond, J.W., Jurisprudence, 10th ed. (London 1966), 498 .

63 Yarmouth v France (1887) 19 Q.B.D. 647.

64 Ibid., at p. 653.

65 Pollock, Sir F., Jurisprudence, 6th ed. (London 1929), 235–36.

66 Wade, “Covenants”, p. 158.

67 Snape, “The Benefit and Burden of Covenants”, p. 86.

68 Ibid.

69 Tee, “A Roof Too Far”.

70 Ibid., at p. 448.

71 Elwood [2013] EWCA Civ 1103; [2013] 4 All E.R. 1077, at [25], per Patten L.J.

72 As happened in Rhone itself.

73 Reforms permitting the enforceability of the burden of positive obligations have already been introduced in several common law jurisdictions New South Wales, Northern Territory, Northern Ireland, Trinidad and Tobago, New Zealand, Hong Kong and more recently in the Republic of Ireland.

74 Snape, “The Benefit and Burden of Covenants”.

75 L. Turano, “Intention, Interpretation and the ‘Mystery’ of Section 79 of the Law of Property Act 1925” [2000] 64 Conv. 377.

76 Rudden, B., “Economic Theory v Property Law: The Numerus Clausus Problem” in Eekelaar, J. and Bell, J. (eds.), Oxford Essays in Jurisprudence, 3rd series (Oxford 1987), 262 .

77 See e.g. Cooke, E., “To Restate or Not to Restate? Old Wine, New Wineskins, Old Covenants, New Ideas” (2009) 73 Conv. 448, at 455–59; Report of the Committee on Positive Covenants Affecting Land; Law Commission, Transfer of Land: The Law of Positive and Restrictive Covenants (1984) (Law Com. Report No. 127); Law Commission, Easements.

78 Gravells, “Enforcement”, p. 350.

79 Cooke, “To Restate or Not to Restate?”, p. 460.

80 Law Commission, Making Land Work.

81 Under the Commission's proposals, the old law of covenants (including the complex rules for the passing of the benefit and burden) continue to apply for those covenants pre-dating implementation of the reforms.

82 Capitalisation of “Land Obligation” sets this latest reform apart from its forerunner which was also described as “land obligation” but in lower case. In its 1984 Report, Transfer of Land, the Commission had recommended the replacement of the law on covenants with a scheme of land obligations. Land obligations would have been legal interests in land, embodying positive and negative obligations, segregated by type (positive or negative) and context. The 1984 recommendations were not implemented.

83 Law Commission, Making Land Work, at [5.23]; Law Commission, Easements, paras. [8.68]–[8.80]; Cooke, “To Restate or Not to Restate?”, p. 458.

84 The draft Bill defines such obligations as obligations to do something on one's land or on a boundary structure or to make a payment in return for the performance of another obligation. There would be no requirement that they be drafted as covenants or that particular words be used in their creation. They would be able to bind successors in title, but would also be registrable, so as to make publicly available the details of the land that they burden and benefit: Law Commission, Making Land Work, at [1.17].

85 See e.g. T. Sutton, “On the Brink of Land Obligations Again” [2013] Conv. 17. For a contrary view, see P. O'Connor, “Careful What You Wish For: Positive Freehold Covenants” [2011] Conv. 191.

86 On which, see generally Davidson, N.M., “Standardization and Pluralism in Property Law” (2008) 61 Vand L.R. 1597 ; Akkermans, B., The Principle of Numerus Clausus in European Property Law (Intersentia 2008); Merryman, J.H., “Policy, Autonomy, and the Numerus Clausus in Italian and American Property Law” (1963) 12 Am.J.Com.L. 224 ; Swadling, W., “Opening the Numerus Clausus” (2000) 116 L.Q.R. 354 .

87 McFarlane, B., “The Numerus Clausus Principle and Covenants Relating to Land” in Bright, S. (ed.), Modern Studies in Property Law, vol. 6 (London 2011), 311 .

88 See Swadling, W., “Property” in Burrows, A. (ed.), English Private Law, 2nd ed. (Oxford 2007), [4.09], [4.129]; Swadling, “Opening the Numerus Clausus”; Merrill, T.W. and Smith, H.E., “Optimal Standardization in the Law of Property: The Numerus Clausus Principle” (2000–2001) 110 Yale L.J. 3 .

89 See Rudden, “Economic Theory v Property Law”, pp. 239–45.

90 McFarlane, “The Numerus Clausus Principle”, p. 313.

91 Hill v Tupper (1863) H. & C. 122, 127.

92 Ibid., at p. 127.

93 Keppell (1834) 2 My & K 517, 536; 39 E.R. 1042, 1049, per Lord Brougham L.C.

94 Merrill and Smith, “Optimal Standardization”, p. 9.

95 See Gray, K.J. and Gray, S.F., “The Rhetoric of Realty” in Getzler, J. (ed.), Rationalizing Property, Equity and Trusts: Essays in Honour of Edward Burn (London 2003), 222 .

96 Raz, J., The Authority of Law: Essays on Law and Morality (Oxford 1979), 200 .

97 See e.g. the acceptance of easements of car parking by analogy with pre-existing right of way easements: London & Blenheim Estates v Ladbroke Retail Parks (1992) 1 W.L.R. 1278 (Ch); (1994) 67 P. & C.R. 1.

98 Rudden, “Economic Theory v Property Law”.

99 Kant, I., Philosophy of Law, trans. Hastie, W. (Edinburgh 1887).

100 Austin, J., Lectures on Jurisprudence, 5th edn., ed. Campbell, R., 2 vols. (London 1885).

101 Hegel, G.W.F., Philosophy of Right, trans. Knox, T.M. (Oxford 1942).

102 Cooke, “To Restate or Not to Restate?”, p. 463.

103 See Sterk, S.E., “Freedom from Freedom of Contract: The Enduring Value of Servitude Restrictions” (1985) 70 Iowa L.R. 615, 617; O'Connor, “Careful What You Wish For”, p. 205.

104 Rudden, “Economic Theory v Property Law”, p. 252.

105 See McFarlane, “The Numerus Clausus Principle”, p. 326; Harris, J., Property and Justice (Oxford 1996), 172 .

106 Merrill, T.W. and Smith, H.E., “What Happened to Property in Law and Economics?” (2001) 111 Yale L.J. 357 ; see also Hansman, H. and Kraakman, R., “Property, Contract, and Verification: The Numerus Clausus Problem and the Divisibility of Rights” (2002) 31 J. L.S. 373 .

107 Merrill and Smith, “What Happened to Property”, p. 359.

108 See Merrill and Smith, “Optimal Standardization” and “What Happened to Property”.

109 Merrill and Smith, “What Happened to Property”, p. 369.

110 C.M. Rose, “Servitudes”, Arizona Legal Studies, Discussion Paper No. 09–13, March 2009.

111 Ibid., at p. 18.

112 Law Commission, Making Land Work, at [5.51], and the proposal that overage should not be able to be secured by way of positive obligations.

113 B. Edgeworth, “The Numerus Clausus Principle in Contemporary Australian Property Law” (2006) Monash U.L.R. 387, 417.

114 Ibid., at p. 418.

115 Law Commission, Making Land Work, at [5.51].

116 See s. 88BA of the Conveyancing Act 1919 and s. 34(4) of the Property (Northern Ireland) Order 1997 respectively.

117 Davis, “The Principle of Benefit and Burden”, p. 552.

118 Merrill and Smith, “Optimal Standardization”, p. 70.

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