When is a covenant not a covenant?

Our latest blog is from Alan Riley, Property Law Consultant, and is published in association with Title & Covenant. Title & Covenant are part of the Stackhouse Poland Group and are specialists in legal indemnity insurance.

According to a recent High Court decision, the answer to the question above might be: “when the covenant is construed as an easement”. However, sense has prevailed in the Court of Appeal in the ‘fencing easement’ case of Churston Golf Club Ltd v Haddock [2019] EWCA Civ 544. The language of a 1972 conveyance which, to all of the world, appeared to have imposed a covenant on the owner of the golf club’s land has indeed been interpreted as imposing a covenant.

The case involved a legal dispute between the leasehold owner of Churston Court Farm (Mr Haddock) and his leasehold neighbour, the Churston Golf Club Limited. Haddock had issued proceedings against the Golf Club because of its failure to maintain a stock-proof fence on the boundary between their respective properties. This, claimed Haddock, had adversely affected his farming business.

He claimed that the Golf Club was obliged to maintain a fence on the boundary line because it was bound by an obligation, in the form of a fencing easement, to maintain a fence on the boundary between the two properties. The ‘easement’ was purportedly created by a conveyance of the golf club land to its current freeholder in 1972. The burden of such an easement would automatically bind a tenant from the freeholder. The relevant clause read as follows:

“The Purchaser hereby covenants with the Trustees that the Purchaser and all those deriving title under it will maintain and forever hereafter keep in good repair at its own expense substantial and sufficient stock proof boundary fences walls or hedges along all such parts of the land hereby conveyed as are marked T inwards on the plan annexed hereto.”

While the language of this clause appeared (in just its first four words) to have imposed a covenant, the nature of which would be positive, the High Court judge held that it was clear law that a clause in a transfer or conveyance could be construed as the grant of an easement, even though it was framed expressly in terms as a covenant, and even though the word “covenant” was used.

The judge thought that that the presence of the words “forever hereafter” showed that the parties to the 1972 conveyance had intended that the obligation would last into the future, beyond changes of ownership. Such an intention was too easy to defeat if the clause was to be interpreted as a covenant. Positive covenants do not run with the land; but the burden of an easement does. Haddock was awarded damages  of £1000 by the judge for the interference with his ‘fencing easement’.

On appeal, the Court of Appeal was required to consider two things: (1) whether, as a matter of construction, the provisions of the clause of the 1972 conveyance fell to be construed simply as a covenant to fence or as the creation of an easement of fencing in favour of Haddock’s property; and (2) if as a fencing easement, whether it was legally possible to create such an easement by express grant. As it turned out, the Court of Appeal only had to deal with the first point. In its view, the 1972 conveyance was a professionally drafted document, drafted by someone who fully understood the basic rules governing the creation of easements and the imposition of covenants.

The fact that the covenantor was required “forever hereafter” to keep the fence in good repair was quite normal in the case of a fencing covenant to make it clear that the covenantor’s own liability would not terminate on a subsequent sale of the land. It was not indicative of the creation of an obligation intended to bind successors. The language of the clause did not indicate anything other than a positive covenant to maintain a fence. As a positive covenant, it was binding upon the original covenantor only, and would not bind its successors in title or their tenants.

It was unnecessary for the Court of Appeal to consider the legal basis for fencing easements. There is long established authority that such a right can exist as an easement, although the precise basis (whether by prescription, or ancient custom) appears to be unclear. In Crow v Wood [1971] 1 QB 77, Lord Denning felt that such a right could also arise by grant under section 62 of the Law of Property Act 1925: “It seems to me that it is now sufficiently established – or at any rate, if not established hitherto, we should now declare – that a right to have our neighbour keep up the fences is a right in the nature of an easement which is capable of being granted by law so as to run with the land and to be binding on successors. It is a right which lies in grant and is of such a nature that it can pass under section 62 of the Law of Property Act, 1925”. However, whether this remains an accurate statement of the law, and whether, if it does, such an easement can be granted expressly, will have to wait another day.

 

For more information

If you require advice on insuring freehold covenants or other types of title issues, for example village green and prescriptive rights to light please contact David Turschwell, Solicitor and Managing Director of Title & Covenant. Call 020 8213 3057  or email info@titleandcovenant.co.uk

 

Title & Covenant Brokers Limited is authorised and regulated by the Financial Conduct Authority.  FCA number 477408 This article was previously published at https://www.propertypsl.co.uk/