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Freehold Covenants Problem Question
In January 2018, Anna sold to Barry, a plot of land next to a lake so that Barry could build a fishing cabin to attract tourists for fishing holidays. The conveyance of sale granted to Barry and his successors in title a right to fish on the lake and a right of way to access the cabin over a road on land that was on the land retained by Anna. The conveyance contained the following freehold covenants:
- That the fishing cabin could only be used for fishing vacations only;
- That the fishing cabin must be painted in neutral colours in keeping with the natural surroundings and re-painted every year;
- That Barry and his successors in title must contribute to the costs of maintaining the road on Anna’s retained land.
Anna has since sold her land to Crystal and Barry has since sold his land to Darcy.
Darcy has just painted the fishing cabin bright red and has no intention of re-painting it again. Darcy has also been running a café from the land and has refused to contribute to the cost of maintaining the access road.
Advise Crystal and Darcy as to the enforceability of the freehold covenants.
Please take a look at the question that accompanies this video. Students often find covenants problem questions quite difficult, quite challenging, and I think that's because it's quite difficult initially to get a grasp on what the issues are and how to structure your analysis. So hopefully this short video will help you.
Look at the scenario in front of you. You'll see that there are three separate covenants. I suggest you start by thinking about the nature of those covenants. Are they negative, restrictive covenants? Or, are they positive, requiring positive action? Beyond that, it's also a good place to start to think about who the parties are in this scenario.
In our scenario, B is the original covenantor and A is the original covenantee. Now, both B and A have sold their land to successors entitled. C in our scenario is the successor of A, and D is the successor of B. Now, the question for you is: how do we determine whether these covenants are enforceable? That's really what the issue is here. And I've got hopefully an easy and straightforward way for you to answer this.
Start by asking: has the benefit of the covenants passed to the claimant? (That's the person who wants to enforce the covenant.) And then ask: has the burden of the covenant passed to the person who is the defendant? (In other words the person who should shoulder the burden of that covenant.) Only if the claimant has the benefit of the covenant and the defendant is bound by that covenant and shoulders the burden are they enforceable.
So take each covenant in turn; look at the restrictive covenant, the covenant in relation to fishing. Start with the burden; has the burden of this covenant passed? Well the issue here will be using the case of Tulk v Moxhay in equity. It is only in equity that the burden of a covenant can pass and only then the burden of a negative restrictive covenant. Once you've identified that the burden has passed, you need to consider the benefit. Has the benefit of the covenant also passed? And you can do that in equity quite straightforwardly by showing that the covenant touches and concerns the land and that the benefit was intended to run with the land under section 78.
So it looks like the fishing covenant is potentially enforceable. What about the other covenants, the two positive covenants on painting and making a contribution? Well this is going to be more difficult. Why? Because the burden of a positive covenant cannot pass. Neither at law nor in equity. That really scuppers the chances of the painting covenant being enforceable. But for the contribution covenant, why not try relying on one of the indirect methods, the doctrine of benefit and burden? And it seems if the benefit and burden are connected that this covenant will be enforceable.