The Land and Property Act - Essay Example

?Question One The current situation involves assessing whether a burden of covenant has passed between subsequent land owners based on a negative covenant between the covenantor and the covenantee. Depending on the covenant’s stipulations: the burden of the covenant runs with the land so that the covenantee forces the covenant on the original covenantor alone; the burden of the covenant runs with the land so that the covenantee forces the covenant on the original covenantor and all subsequent property owners; the burden of the covenant runs with the land so that subsequent property owners force the covenant on subsequent buyers. As a general principle, the burden of freehold cannot be attached to property in an effort to bind the buyer. The judgement under Rhone v Stephens1 makes it clear that a positive covenant entered into by previous owners does not bind the current owner since such actions would assume that the current owner was a party to the original contract. In the current case, Stone Construction Limited is not bound by any covenant that Steve undertook with Joan. Moreover, a covenant can only take effect and be respected if the benefit of the covenant comes to the party bearing the burden of the covenant. Under Austerberry v Oldham Corporation2, any agreement between the covenantor and the covenantee only holds between the original parties and not between successors unless: such stipulations are mentioned in the covenant; such stipulations are passed onto successors with their full knowledge and acceptance. Hence, the burden of a covenant does not pass to the successor through title at common law. The burden can only be passed under equity if: the covenant is negative in effect; covenant benefits the covenantee’s land; the burden of the covenant was designed by the original parties to run with the land3; the succeeding party was provided notice of the covenant at purchase. Given the ruling under Tulk v Moxhay4, it is clear that Hans cannot be provided benefit under equity either since the covenant was not designed to run with the land and the successor, Stone Construction Limited, had not notice of the covenant. However, the burden of a restrictive covenant passes to the successor in title only under equity but not under law. In the current situation, Hans tends to be affected more by equity based rules rather than contract based rules. Under common law, Hans cannot be provided benefit of the covenant since he was not a party to the original contract. Acting in Hans’ favour using a contract law position would signal a disregard for common law so Hans cannot be given advantage. Alternatively, Hans could have been provided some benefit under Section 56(1) of the Land and Property Act (LPA)5 if he were named and described under the original covenant. However, this is not the case since Joan, the covenantee, had failed to describe or name Hans with the original covenantor Steve. On another note, Hans may receive some relief under Section 1 of the Contract (Rights of Third Parties) Act6 since Hans stands to benefit from the covenant along with other future land owners. In order to analyse the burden and the benefit of the covenant, it is pertinent to consider equitable rules. The benefit of the covenant could only pass in equity if: benefit of the covenant was attached to Joan’s land; benefit of the covenant was moved through express declaration of Joan to the successor in title Hans; the concerned land was part of a development scheme7. Alternatively, under the decision for P&A Swift Investments v Combined English Stores Group PLC8, it was provided that a covenant may pass at common law in case that the covenant concerns the dominant land so as to benefit any successors and the covenantee personally. However, under the judgement provided under Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board9 using Section 78 of the LPA, it would be necessary to provide or prove that Hans’ land is damaged by the actions of Stone Construction Limited. In Hans’ case, the burden does not run with the land and hence Stone Construction Limited is not bound by the original covenant. In the modern day, the land should be registered in the proper manner in order for the covenant to hold ground. Hans should take up the matter legally as soon as possible to ensure that Stone Constructing Limited does not begin building already or else Hans would be helpless and would receive meagre compensation under any legal claims after the buildings have been completed10. Hans could also pursue for damages although they would not be a fair compensation in the current circumstances. Question Two Recent cases concerning family land law disputes have begun to consider a wider set of circumstance in order to reach verdicts. Previous cases were mired in resulting trust so as to determine the beneficial entitlement of the disputing parties. The rise of consumer context under the law has now given precedence to holistic approaches that rely on constructive tests based on common intention of the disputing parties. This methodology implies that the legal process seeks to quantify the interests of the claimant in the disputed property. It has to be seen how the claimant is entitled to derive beneficial interest in the land and what would be the quantity of such an interest of the claimant. In the recent Stack v Dowden11, Lord Hope made it clear that any direct and indirect contributions ought to be taken into account when dealing with such disputes. Moreover, given the fiscal independence of the couple from each other during the relationship, it was assumed unfair to look into the appeal. On the other hand, Baroness Hale argued that the claimant ought to clarify how beneficial ownership would differ from legal ownership in the current dispute. Moreover, it needed to be established if both parties intended for the joint beneficial interests to be differentiated from the legal interests. In the more recent Jones v Kernott12, it was made clear that if the joint property holding has a joint legal interest then quantification of such interests would be the court’s next line of action. In contrast, the judgement in Burns v Burns13 shows that the claimant did not get any beneficial entitlement since the claimant had not made any direct fiscal contributions. In the case of Oxley v Hiscock14 the judgement reflected that the claimant could not claim 50% while contributing lower than the defendant. However, such a judgement was arrived at given the evidence of direct fiscal contribution by the claimant. In the case of Burns v Burns, no such evidence is possible and hence no quantification is possible either. Alternatively, using Stack v Dowden it becomes clear that indirect fiscal contributions need to be compensated too for the claimant. In light of such a judgement, Burns v Burns would have been decided differently and would have allowed the claimant some compensation. However, it remains unclear on how to quantify such a claim since beneficial interest is established but not yet quantified. This supports the idea that it is up to the court’s discretion to decide on the issues of quantification. Bibliography Austerberry v Oldham Corporation (1885) 29 Ch D 750 Burns v Burns [1984] 1 All ER 244 Contract (Rights of Third Parties) Act (1999) Conveyancing Act (1925), Section 70A(1) Gafford v Graham [1998] 77 P & CR 73 Jones v Kernott [2011] UKSC 53 Land and Property Act (1925) Oxley v Hiscock [2004] EWCA Civ 546 P&A Swift Investments v Combined English Stores PLC [1989] AC 632 HL Renals v Cowlishaw (1878) 9 Ch D 125 at 129 Rhone v Stephens [1994] 2 AC 310 Smith and Snipes Hall Farm Ltd v River Douglas Catchment Board [1949] 2 KB 500 Stack v Dowden [2007] 2 A C 432 HL Tulk v Moxhay (1848) 2 Ph 774; 41 ER 1143 Read More