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[2004] 1 WLR Crest Nicholson Ltd v McAllister (CA)

A Court of Appeal

*Crest Nicholson Residential (South) Ltd v McAllister

[2004] EWCA Civ 410
2003 Oct 27; Auld, Chadwick and Arden LJJ
B 2004 April 1

Restrictive covenant Ñ Enforceability Ñ Annexation Ñ Conveyances containing

restrictive covenants Ñ Whether annexed to land Ñ Whether necessary for
conveyance to identify ÔÔland of the covenantee intended to be beneÞtedÕÕ Ñ
Whether su±cient for conveyance to describe land in terms enabling it to be
easily ascertained from other evidence Ñ Whether contrary intention manifested
C in conveyance preventing annexation Ñ Whether conveyances su±ciently
identifying land intended to be beneÞted Ñ Conveyances containing express
words of annexation for beneÞt of vendorÕs property or part thereof for time
being remaining unsold Ñ Part of vendorÕs property subsequently sold to
defendantÕs predecessor in title Ñ Whether defendantÕs property ÔÔland of the
covenantee intended to be beneÞtedÕÕ Ñ Whether defendant entitled to enforce
covenants Ñ Law of Property Act 1925 (15 & 16 Geo 5, c 20), s 78(1)1
D Two brothers bought an estate and formed a company to sell o­ the land in plots.
By three conveyances executed between 1928 and 1930 three individual purchasers
each acquired a plot and, by three further conveyances executed in 1933, each
acquired a further plot contiguous with his original plot. All the conveyances
contained a covenant providing that ÔÔthe premises shall not be used for any purpose
other than those of or in connection with a private dwelling house or for professional
purposesÕÕ, and all but one contained a further covenant providing that ÔÔno dwelling
E house or other building shall be erected on the land hereby conveyed unless the plans
drawing and elevations shall have been previously submitted to and approved of in
writing by the [vendor] but such approval shall not be unreasonably or vexatiously
withheldÕÕ. Three of the conveyances contained express words of annexation ÔÔfor the
beneÞt of the property . . . aforesaid belonging to [the company] or the part thereof
for the time being remaining unsoldÕÕ. Each purchaser built a substantial dwelling
house on his enlarged plot. By a conveyance executed in 1936 another plot was sold,
F subject to covenants in di­erent form, on which three further substantial dwelling
houses were built. Subsequently the brothers died and the company was dissolved.
In 2000 the claimant made a conditional contract to buy part of the garden of each of
four of the houses, together with the whole plot on which the Þfth house was built,
forming a single parcel of land on which it proposed to build new dwelling houses.
The defendant, the owner and occupier of the sixth house, claimed as successor in
title of the original vendor to enforce the covenants. The claimant brought an action
G for declarations that the covenants did not restrict the covenantors and their
successors from using the premises conveyed by each conveyance for the erection of
more than one private dwelling house and that the claimant would not be prevented
by those covenants from developing the land in the manner proposed, and for
determination of the e­ect on the second covenant of the death or dissolution of the
vendor. The judge held that the e­ect of the Þrst covenant was to prevent the use of
any of the plots other than for or in connection with a single private dwelling house,
H but that the second covenant was no longer enforceable, having been discharged by
either the companyÕs dissolution or the brothersÕ deaths. It was common ground
before the judge that the defendant was entitled to the beneÞt of the covenants in the
Þrst six conveyances but not of those in the 1936 conveyance. On that basis the judge
1
Law of Property Act 1925, s 78(1): see post, para 24.

Vol 1 98
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found that the beneÞt of the covenants in the Þrst six conveyances was annexed to the A
defendantÕs land. The claimant appealed and the defendant cross-appealed. At the
appeal hearing the claimant was permitted to argue that the covenants were not
annexed to the defendantÕs land.
On the appeal and the cross-appealÑ
Held, allowing the appeal and making no order on the cross-appeal, that,
although section 78(1) of the Law of Property Act 1925 which deemed a restrictive
covenant to be made with the successors in title of the covenantee rendered it B
unnecessary to state in the conveyance that the covenant was to be enforceable by
persons deriving title under the covenantee or his successors in title and by the owner
or occupier of the land intended to be beneÞted or that the covenant was to run with
that land, the beneÞt of the covenant was annexed only to such land as the
conveyance identiÞed by express words or necessary implication as intended to be
beneÞted and only in so far as the conveyance did not manifest a contrary intention;
that land intended to be beneÞted was su±ciently identiÞed if the conveyance C
described it in terms which enabled it to be easily ascertained from other evidence;
that, since the three conveyances which contained express words of annexation
conÞned the land intended to be beneÞted to that which from time to time remained
unsold, they excluded from the beneÞt of the covenants the defendantÕs land which
had been sold by the covenantee subsequent to the execution of those three
conveyances; that in relation to the other three conveyances the defendant could not
show that the land of which she was owner had been intended to be beneÞted by the D
covenants; and that, accordingly, although the defendant was a successor in title of
the original vendor none of the covenants in the Þrst six conveyances was enforceable
by her ( post, paras 30Ð34, 36Ð37, 41Ð44, 47Ð50, 52, 54Ð56).
Marquess of Zetland v Driver [1939] Ch 1, CA followed.
Dicta of Judge Paul Baker QC in Roake v Chadha [1984] 1 WLR 40, 46
approved.
Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594, CA E
explained.
Decision of Neuberger J [2002] EWHC 2443 (Ch); [2003] 1 All ER 46 reversed.

The following cases are referred in the judgment of Chadwick LJ:

Dano Ltd v Earl Cadogan [2003] EWCA Civ 782; The Times, 2 June 2003, CA
Eagling v Gardner [1970] 2 All ER 838
Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594; [1980] 1 All F
ER 371, CA
Roake v Chadha [1984] 1 WLR 40; [1983] 3 All ER 503
Rogers v Hosegood [1900] 2 Ch 388, CA
Shropshire County Council v Edwards (1982) 46 P & CR 270
Tulk v Moxhay (1848) 11 Beav 571
Whitgift Homes Ltd v Stocks [2001] EWCA Civ 1732, CA
Zetland (Marquess of ) v Driver [1939] Ch 1; [1938] 2 All ER 158, CA G
The following additional cases were cited in argument:
Briggs v McCusker [1996] 2 EGLR 197
Dobbs v Linford [1953] 1 QB 48; [1952] 2 All ER 827, CA
Downie v Turner [1951] 2 KB 112; [1951] 1 All ER 416, CA
EnderickÕs Conveyance, In re [1973] 1 All ER 843
SolicitorsÕ Arbitration, In re A [1962] 1 WLR 353; [1962] 1 All ER 772 H
APPEAL from Neuberger J
By an amended claim form under CPR Pt 8, originally issued in
November 2001, the claimant, Crest Nicholson Residential (South) Ltd,
sought against the defendant, Fiona Ruth McAllister, inter alia,
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Chadwick LJ

A (a) declarations that (i) on the true construction of seven conveyances of

parcels of land formerly forming part of the Fee Farm Estate, Claygate,
Surrey, particulars of which were set out in the schedule to the claim form,
the covenants set out in the Þrst schedule to each conveyance did not restrict
the respective covenantors and their successors in title from using the
premises conveyed by conveyance for the erection of more than one private
dwelling house and (ii) on completion of its contract to purchase part of the
B
land conveyed by those conveyances the claimant would not be prevented
by those covenants from developing the land in the manner which it
proposed; and (b) determination of the question whether, on the death or
dissolution of the persons to whom the building covenant required
drawings, plans and elevations to be submitted for approval, (i) that
covenant became absolute and unqualiÞed or (ii) it became spent or
C (iii) there was some other (and, if so, what) consequence in relation to that
covenant. On 17 December 2002 Neuberger J granted declarations that, on
a true construction, a covenant that premises should not be used for any
purpose other than those of or in connection with a private dwelling house
or for professional purposes restricted the covenantor and his successors in
title from using the premises conveyed by each conveyance for the erection
of more than one private dwelling house; and that a covenant that no
D
dwelling house or other building be erected on the land conveyed unless the
plans, drawings and elevations had been previously submitted to and
approved in writing by the vendor had been discharged by the dissolution or
death of the covenantee.
By an appellantÕs notice Þled on 29 January 2003 the claimant appealed
on the principal ground that the judge had wrongly construed the words ÔÔa
E private dwelling houseÕÕ in the conveyances to mean a single private dwelling
house.
By a respondent notice Þled on 4 March 2003 the defendant cross-
appealed on the grounds that the judge had wrongly construed the e­ect of
the dissolution or death of the covenantee as discharging the covenant
restricting building without the covenanteeÕs written consent, for an order
that on a true construction the covenant had become absolute upon the
F death or dissolution of the covenantee.
The facts are stated in the judgment of Chadwick LJ.
Vivian Chapman for the claimant.
Nicholas Grundy for the defendant.
Cur adv vult
G
1 April 2004. The following judgments were handed down.
CHADWICK LJ
1 This is an appeal and cross-appeal from an order made on
17 December 2002 by Neuberger J [2003] 1 All ER 46 in proceedings
brought by Crest Nicholson Residential (South) Ltd to determine the extent
H
to which land at Claygate, Surrey, in respect of which it is the purchaser
under a conditional contract, is subject to restrictive covenants. The
defendant to those proceedings, Mrs Fiona McAllister, is the owner of
neighbouring land and (as such) claims to be entitled to the beneÞt of those
covenants.
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The underlying facts A

2 The land in question, which borders Claygate Common, was sold for
building in 1923. The purchasers, into whose names the land was conveyed,
were Mr Percy Mitchell and his brother, Mr Charles Mitchell. In July 1924
they agreed to sell the land to their company, Mitchell Bros (Builders) Ltd;
but there was no conveyance and the land remained in the names of the two
brothers. Between 1926 and 1936 the company sold o­ the land, in plots, to B
individual purchasers. The two brothers joined in the conveyances to those
purchasers as trustees to convey the legal estate. Those conveyances
imposed restrictive covenants on the land conveyed.
3 There were, I think, a dozen conveyances by the Mitchell brothers and
their company between 19 July 1926 and 27 May 1936. Seven are relevant
to this appeal. They fall into four groups: (i) conveyances dated 2 February
C
1928 and 15 February 1933 to Mr Arthur Edward Arthur (ÔÔthe Arthur
conveyancesÕÕ), (ii) conveyances dated 22 August 1928 and 3 November
1933 to Mr Harry Thomas Humphreys (ÔÔthe Humphreys conveyancesÕÕ),
(iii) conveyances dated 21 November 1930 and 3 November 1933 to
Mr Edwin Robert Roberts (ÔÔthe Roberts conveyancesÕÕ) and (iv) a conveyance
dated 27 May 1936 to Mr Richard William FÞtch Wing and Mr Richard
John Wing (ÔÔthe Wing conveyanceÕÕ). The land in respect of which Crest D
Nicholson is purchaser (ÔÔthe proposed development landÕÕ) is comprised of
parts of the land conveyed by each of the seven conveyances. The land of
which Mrs McAllister is the owner comprises part of the land conveyed by
the Wing conveyance.
4 The land conveyed by the Arthur, Humphreys and Roberts
conveyances is now comprised in the registered titles of three properties E
known respectively as ÔÔWestwoodÕÕ, ÔÔMylorÕÕ and ÔÔMorwennaÕÕ. Each of
those properties has a frontage onto a road known as The Causeway. On
each of those properties there is, now, a substantial dwelling house. The
proposed development land includes part of the gardens at the rear of each
of those properties; that is to say, it includes what may be described as the
bottom half of each of those gardens, extending back to Claygate Common.
5 Most of the land conveyed by the Wing conveyance is now comprised F
in the registered titles of three other properties known respectively as
ÔÔRedruthÕÕ, ÔÔTressilionÕÕ and ÔÔNewlynÕÕ. Each of those properties has a
frontage onto Cornwall Avenue, which forms an extension to Common
Road. Again, there is, now, a dwelling house on each of those properties.
The remainder of the proposed development land includes part of the garden
of Tressilion and the whole of the property known as Redruth, through G
which it is intended that access to the proposed development will be
obtained from Cornwall Avenue. Mrs McAllister is the registered proprietor
of Newlyn.
6 In or about September 2000 Crest Nicholson entered into a
conditional contract for the purchase of the proposed development land
with a view to the development of that land by the erection of Þve new
H
houses on what are now the gardens of Westwood, Mylor and Morwenna,
and a sixth house in place of the existing dwelling on Redruth.
Mrs McAllister opposed that development. She contended that the erection
of new houses would breach the terms of the restrictive covenants of which
she, as owner of Newlyn, was entitled to the beneÞt.
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[2004] 1 WLR Crest Nicholson Ltd v McAllister (CA)
Chadwick LJ

A The relevant covenants

7 Each of the seven conveyances contains, in the Þrst schedule,
covenants restricting the use which is to be made of the land conveyed. The
relevant covenants, for the purposes of this appeal, are those in para 2 of the
Þrst schedule to each conveyance. Those paragraphs impose one or both of
the following restrictions (or restrictions in substantially the same terms):
B (i) a restriction (ÔÔthe user restrictionÕÕ) that ÔÔthe premises shall not be used
for any purpose other than those of or in connection with a private dwelling
house or for professional purposesÕÕ; (ii) a restriction (ÔÔthe building
restrictionÕÕ) that
ÔÔno dwelling house or other building shall be erected on the land
hereby conveyed unless the plans drawings and elevations shall have been
C previously submitted to and approved of in writing by [the company/the
vendor] but such approval shall not be unreasonably or vexatiously
withheld.ÕÕ
8 In that context, with two exceptions, ÔÔthe companyÕÕ or ÔÔthe vendorÕÕ,
as the case may be, means Mitchell Bros (Builders) Ltd. The exceptions are
that in one of the Roberts conveyances (that dated 21 November 1930) and
D in the Wing conveyance, the persons or person by whom plans are to be
approved for the purposes of the building covenant (described as ÔÔthe
vendorsÕÕ or ÔÔthe vendorÕÕ) are the two brothers rather than the company.
We were told that Mr Charles Mitchell predeceased his brother; that
Mr Percy Mitchell died in 1949; and that the company was dissolved in
1968.
9 Restrictions in the terms which I have just set out are found in both
E the Arthur conveyances, in both the Roberts conveyances, in the later of
the Humphreys conveyances and in the Wing Conveyance. The earlier
Humphreys conveyance (dated 22 August 1928) contains the user restriction
but does not contain the building restriction.
10 The restrictions contained in the Þrst schedule to the conveyance
dated 2 February 1928 were the subject of a covenant given by the
purchaser, Mr Arthur Edward Arthur, in these terms:
F
ÔÔThe purchaser to the intent and so that the covenants hereinafter
contained shall be binding on the said land and hereditaments hereby
conveyed into whomsoever hands the same may come but not so as to
render the purchaser personally liable for damages for any breach thereof
after he shall have parted with all interest therein hereby covenants with
the company and the trustees that he the purchaser and the persons
G
deriving title under him will at all times hereafter observe and perform the
[restrictions mentioned in the Þrst schedule hereto].ÕÕ
There is no express annexation, in that conveyance, of the beneÞt of the
covenants to land retained by the covenantees. The later of the two Arthur
conveyances (dated 15 February 1933) is a conveyance to Mr Arthur made
supplemental to the earlier conveyance of 2 February 1928. Its object, as
H
appears from the recitals, is to convey to him ÔÔa further piece of land
forming part of the said Fee Farm Estate subject to the said restrictions
[imposed by the principal conveyance]ÕÕ. The covenants are given in the
same terms. Again, there is no express annexation of the beneÞt of the
covenants to land retained by the covenantees.
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11 The covenants in the Humphreys conveyances did contain express A

words of annexation:
ÔÔFor the beneÞt of the property at Claygate aforesaid belonging to the
vendors or the part thereof for the time being remaining unsold and so as
to bind the property hereby conveyed the purchaser hereby covenants
with the vendors and the trustees that the purchaser and the persons
deriving title under him will henceforth at all time hereafter observe and B
perform all and singular the restrictions contained in the Þrst
schedule hereto . . .ÕÕ
12 The covenant in the Þrst of the Roberts conveyances (dated
21 November 1930) was given by the purchaser, Mr Roberts, in these terms:
ÔÔto the intent that this covenant shall be binding so far as may be on the
C
owner for the time being of the property hereby assured but upon the
purchaser only so long as he is the owner of the said property . . .ÕÕ There are
no words of annexation in that conveyance. The covenant in the later
Roberts conveyance (dated 3 November 1933) was given in the same terms
as those in the two Humphreys conveyances.
13 In those cases where the conveyance contains no words of
annexation it is pertinent to note the description of the land conveyed. In the D
Þrst of the Arthur conveyances (dated 2 February 1928) the land conveyed is
described as: ÔÔAll that piece or parcel of freehold land situate and being plot
no 6 and part of plot no 5 on the Fee Farm Estate at Claygate in the County
of Surrey . . .ÕÕ The land conveyed is further described as having a frontage
onto the road known as The Causeway; its dimensions are given; and it is
said to be ÔÔmore particularly delineated and described on the plan drawn E
hereonÕÕ. The plan drawn on the conveyance is not a plan of the Fee Farm
Estate; in particular, it is not a plan which shows that estate partitioned into
plots. Nor is there any other provision or description in the conveyance
which enables the land known as the Fee Farm Estate to be identiÞed; unless
it be by reference to the conveyance dated 23 October 1923 to Mr Percy
Mitchell and Mr James Mitchell mentioned in the second schedule
F
(documents of title of which the purchaser is entitled to have copies
produced). In the later Arthur conveyance (dated 15 February 1933) the
land conveyed is: ÔÔAll that piece or parcel of freehold land situate and being
partly in the rear of plot no 6 and partly in the rear of plot no 5 on the Fee
Farm Estate at Claygate in the County of Surrey.ÕÕ Its dimensions are given
and it, too, is said to be ÔÔmore particularly delineated and described on the
plan drawn hereonÕÕ. That plan is not a plan of the Fee Farm Estate; and, G
again, there is no provision or description in the conveyance which enables
the land known as the Fee Farm Estate to be identiÞed.
14 In the Þrst of the Roberts conveyances (dated 21 November 1930)
the land conveyed is described as:
ÔÔAll that piece or parcel of land situate in and fronting a road called
The Causeway . . . which with its dimensions boundaries and abuttals H
thereof is more particularly delineated in the plan hereon and thereon
coloured pink together with the messuage or dwelling house recently
erected thereon and known or intended to be known as ÔMorwennaÕ
Number 11, The Causeway . . .ÕÕ
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A There is no reference in that conveyance to the Fee Farm Estate; and nothing
to identify any land retained by the covenantees for which the beneÞt of the
covenant is taken.
15 It is clear from the terms of the two Humphreys conveyances that, at
the date of the Þrst conveyance (22 August 1928) there was no dwelling
house on the land conveyed but that, by the date of the later conveyance
(3 November 1933), the dwelling house known as Mylor had been erected
B
on the land conveyed in 1928. The later conveyance is of ÔÔland at the rear of
MylorÕÕ. It is clear, also, that, at the date of the Þrst of the Roberts
conveyances (21 November 1930) the dwelling house known as Morwenna
had already been erected on the land conveyedÑthe conveyance itself refers
to Morwenna. The later conveyance is of ÔÔland at the rear of MorwennaÕÕ.
And it is, I think, clear that there was no dwelling house on the land
C conveyed by either of the Arthur conveyances at the dates of those
conveyances. To complete the picture, the land conveyed by the two Arthur
conveyances was sold on by Mr Arthur to his neighbour, Mr Humphreys, by
a conveyance dated 3 April 1939. The dwelling house known as Westwood,
which now stands on the land conveyed by the Þrst of the Arthur
conveyances, was built after April 1939.
16 The covenants in the Wing conveyance, dated 27 May 1936, are
D given in a form which di­ers from that found in the six earlier conveyances.
In the Wing conveyance the purchasers covenant: ÔÔfor the beneÞt and
protection of the remainder of the property of the vendors and of the
company at all times hereafter . . .ÕÕ It is, of course, under that conveyance
that Mrs McAllister derives her own title to the property now known as
Newlyn. It was common ground that, absent a building scheme, she could
E not claim to be entitled to the beneÞt of covenants imposed by the Wing
conveyance.

These proceedings
17 These proceedings were commenced in November 2001. The relief
sought, under CPR Pt 8, included declarations (i) that, on the true
F
construction of the seven conveyances to which I have referred ( particulars
of which are set out in the schedule to the claim form) the covenants in para 2
of the Þrst schedules thereto do not restrict the respective covenantors and
their successors in title from using the premises conveyed by each
conveyance for the erection of more than one private dwelling house and
(ii) that, on completion of its contract to purchase part of the land conveyed
by those conveyances Crest Nicholson will not be prevented by those
G covenants from developing the land in the manner proposed (as illustrated
by plans put in evidence). The claim was subsequently amended to seek
determination of the additional question whether, on the death or
dissolution of the person or persons to whom drawings, plans and elevations
were to be submitted for approval under the building covenant, (i) the
building covenant became absolute and unqualiÞed, or (ii) the covenant
became spent, or (iii) there was some other (and, if so, what) consequence in
H
relation to that covenant.
18 In October 2002 the matter came before Neuberger J [2003] 1 All
ER 46. It was accepted on behalf of Mrs McAllister that there was no
building scheme. It was accepted, also, that she was not entitled to the
beneÞt of the covenants imposed by the Wing conveyance. It was common
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ground that, as the owner of so much of the land now in her title as was A
conveyed by the Wing conveyance, Mrs McAllister was entitled to the
beneÞt of the covenants imposed by the Arthur, Humphreys and Roberts
conveyances. The judge held that the building restriction had become spent
on the dissolution of the company or the death of the survivor of the two
brothers (as the case might be). But, on its true construction, the e­ect of the
user restriction was to preclude the covenantor and his successors in title to
B
the premises conveyed by each of the Arthur, Humphreys and Roberts
conveyances from using the premises conveyed by that conveyance for the
erection of more than one private dwelling house or for professional
purposes. Those Þndings are reßected in the order dated 17 December 2002.
19 The judge gave each party permission to appeal to this court. Crest
Nicholson Þled an appellantÕs notice on 29 January 2003, challenging the
judgeÕs Þnding as to the e­ect of the user restriction. It was said that the C
judge should not have construed the words ÔÔa private dwelling houseÕÕ to
mean ÔÔa single private dwelling houseÕÕ; and, on the true construction of
those words, ought to have made the declaration sought in the claim form;
that is to say, ought to have declared that, on completion of its contract to
purchase part of the land conveyed by the seven conveyances, Crest
Nicholson would not be precluded from developing the land acquired in
D
accordance with its proposals. Mrs McAllister cross-appealed, by
respondentÕs notice Þled on 4 March 2003. She challenged the judgeÕs
Þnding that the building restriction was spent. It is said that, on a true
construction of that restriction against building, it became absolute upon the
dissolution or death or of the person or persons to whom, under its terms,
drawings, plans and elevations were to be submitted for approval.
20 As I have said, it was common ground before the judge that (with the E
exception of the land conveyed by the Wing conveyance) Mrs McAllister
was entitled to the beneÞt of the covenants. The judge recorded that
concession in his judgment [2003] 1 All ER 46, 50, para 10:
ÔÔalthough initially in dispute between the parties, it is now common
ground that . . . (2) to the extent that the . . . covenants are negative in
nature, they Ôtouch and concernÕ land. That part of Newlyn which was F
included in the estate had not been sold o­ at the time that the company
sold o­ the plots comprising the claimantÕs land. Consequently, the
beneÞt of the covenants is annexed to part of Newlyn, and the defendant
is entitled in principle to enforce the covenants in so far as they have been
imposed on the claimantÕs land: see section 78 of the Law of Property Act
1925 and Federated Homes Ltd v Mill Lodge Properties Ltd [1980]
G
1 WLR 594.ÕÕ
21 In the skeleton argument prepared on its behalf by counsel, and
dated 24 January 2003, Crest Nicholson did not seek to withdraw that
concession. It was accepted that Mrs McAllister ÔÔhas the beneÞt of the
restrictive covenants in the conveyances of Westwood, Mylor and
Morwenna by statutory or express annexationÕÕ. But, at the hearing in this
H
court, counsel applied to withdraw the concession that the covenants had
become, or remained, annexed to the land conveyed by the Wing
conveyance in 1936. It was said that, on a true construction of the relevant
conveyances and having regard to the language of section 78 of the Law of
Property Act 1925, there was no annexation to land which ceased to be in
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[2004] 1 WLR Crest Nicholson Ltd v McAllister (CA)
Chadwick LJ

A the ownership of the company or the two brothers. That application was
not opposed; and we thought it right to grant it. It was not suggested that
the point raises any issue of fact on which (if the concession had not been
made) evidence would have been called at trial. Annexation being now in
issue, it is appropriate to consider that Þrst. If, or to the extent that, the
beneÞt of the covenants in the several conveyances is not annexed to the
B
land now in Mrs McAllisterÕs title, the questions which the judge was asked
to determine become academic.

Annexation
22 It is trite law that, in order to enforce a covenant a­ecting land, a
person (say, A) who is not the original covenantee must show that he is
entitled to the beneÞt of it. Further, if A seeks to enforce the covenant
C
against a person (say, B) who is not the original covenantor, A must show
that B has become subject to the burden of the covenant. Absent, on the one
hand, an express assignment (or chain of assignments) of the beneÞt of the
covenant and, on the other hand, an express covenant for indemnity (or
chain of covenants) from successors of the original covenantor (neither of
which is not alleged in this case), A cannot enforce the covenant against B at
D law. But, since the decision in Tulk v Moxhay (1848) 11 Beav 571, the
covenant may, nevertheless, be enforced in equity if certain conditions are
satisÞed. In the present case it is not in dispute that, in equity, the burden of
the covenants imposed in the Arthur, Humphreys and Roberts conveyances
has passed to the present owners of Westwood, Mylor and Morwenna; in so
far as there is someone who can enforce those covenants. The question now
E
raised is whether Mrs McAllister, as the owner of part of the land conveyed
by the Wing conveyance, is such a person: is she a person entitled to the
beneÞt of the covenants imposed in the Arthur, Humphreys and Roberts
conveyances?
23 The beneÞt of a covenant may pass in equity (as in law) through a
chain of assignments. That is not this case. Or the beneÞt of a covenant
may pass where land has been sold o­ under a building scheme (which is
F not now alleged). Absent a chain of assignments or a building scheme, the
beneÞt of a covenant may, nevertheless, pass to the owner for the time being
of land to which it has been annexed. In covenants made before 1926 it
was necessary to show, by construing the instrument in the light of
surrounding circumstances, that annexation to the covenanteeÕs retained
land (or some part of it) was intended. Express words of annexation were
G not required.
ÔÔIf, on the construction of the instrument creating the restrictive
covenant, both the land which is intended to be beneÞted and an intention
to beneÞt that land, as distinct from beneÞting the covenantee personally,
can be clearly established, then the beneÞt of the covenant will be
annexed to that land and run with it, notwithstanding the absence of
H express words of annexationÕÕ: see Megarry & Wade, The Law of Real
Property 6th ed (2000), para 16-062, citing Judge Rubin in Shropshire
County Council v Edwards (1982) 46 P & CR 270, 277.
24 In relation to covenants imposed in instruments made after 1925 (as
were the covenants with which we are concerned in this appeal) the position
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is governed by the provisions of section 78 of the Law of Property Act 1925 A

(beneÞt of covenants relating to land):
ÔÔ(1) A covenant relating to any land of the covenantee shall be deemed
to be made with the covenantee and his successors in title and the persons
deriving title under him or them, and shall have e­ect as if such successors
and other persons were expressed. For the purposes of this subsection in
connexion with covenants restrictive of the user of land Ôsuccessors in B
titleÕ shall be deemed to include the owners and occupiers for the time
being of the land of the covenantee intended to be beneÞted.ÕÕ
25 The e­ect of section 78 of the 1925 Act was considered by this court
in Federated Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594. In
order to understand what the court decided it is necessary to have in mind
the facts in that case. The defendant, Mill Lodge Properties Ltd, was the C
owner of land (ÔÔthe blue landÕÕ) which it had acquired under a conveyance
dated 26 February 1971 from a developer, McKenzie Hill Ltd. At the time of
the conveyance McKenzie Hill owned a larger site, comprising (in addition
to the blue land) three other parcels described respectively as ÔÔthe red landÕÕ,
ÔÔthe green landÕÕ and ÔÔthe pink landÕÕ. The whole was subject to conditions
contained in a planning consent (granted in 1970) and a related phasing D
agreement. The conveyance of 26 February 1971 contained a covenant, by
the defendant as purchaser, that in carrying out development of the blue
land it would not build at a greater density than a total of 300 dwellings so as
not to reduce the number of units ÔÔwhich the vendor might eventually erect
on the retained land under the existing planning consentÕÕ. The covenant
was made with the vendor; it was not expressed to be made with the E
vendorÕs successors in title or persons deriving title under it or them. By a
simultaneous conveyance the pink land had been sold by McKenzie Hill to
another purchaser, Gough Cooper (Midland) Ltd. The Gough Cooper
conveyance contained a similar covenant. On 25 March 1971 McKenzie
Hill sold and conveyed the red land and the green land to its mortgagee,
William BrandtÕs Sons & Co Ltd. Those conveyances contained express
assignments of the beneÞt of the covenants in the two conveyances of F
26 February 1971. On 25 February 1972 BrandtÕs sold and conveyed the
green land to the plainti­, Federated Homes Ltd. At or about the same time
BrandtÕs sold the red land, also, to the plainti­; but the red land was
conveyed, on 1 March 1972, by BrandtÕs to BTA Trading Co Ltd as sub-
purchaser, Federated Homes joining in that conveyance as purchaser. That
conveyance contained an express assignment of the covenants in the G
conveyances of 26 February 1971. In 1975, BTA TradingÑwhich had, by
then, changed its name to UDT Properties Ltd and had become registered
with title at HM Land RegistryÑsold the red land back to Federated Homes
and, on 18 March 1975, executed a land registry transfer. The transfer
contained no express assignment of the beneÞt of the covenants in the
February 1971 conveyances. In the meantime the original 1970 planning
H
consent had lapsed, the defendant had obtained new planning consents for
the erection of dwellings on the blue land and was threatening to build,
under those consents, in a way which would prejudice Federated Homes in
relation to the development that it would be permitted to carry out on the
red land and the green land. The proceedings, commenced in 1978, sought
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A to enforce the 1971 density covenant against the defendant as the owner of
the blue land (and the original covenantor).
26 It can be seen, therefore, that, in relation to the green land but not in
relation to the red land, the plainti­ was able to rely on a chain of express
assignments. It was contended on behalf of the defendant, Mill Lodge, that
on a true construction of its February 1971 conveyance the covenants which
it imposed were personal to the original covenantee, McKenzie Hill, and so
B
not assignable. That was said, inter alia, to follow from the fact that the
covenant was made only with ÔÔthe vendorÕÕ and not with successors in title.
The court disposed of that latter point shortly. Brightman LJ (with whose
judgment the other members of the court agreed) pointed out [1980] 1 WLR
594, 602, that section 78 of the 1925 Act provided, in terms, that
ÔÔa covenant relating to any land of the covenantee shall be deemed to
C have been with the covenantee and his successors in title, which
presupposes assignabilityÕÕ.
27 The court rejected, also, the contention that the covenant had
become spent when the original 1970 planning consent lapsed. The e­ect, as
Brightman LJ observed, at p 603, was that the covenant was plainly
enforceable for the beneÞt of the green land:
D
ÔÔHaving reached the conclusion that the restrictive covenant was
capable of assignment and is not spent, I turn to the question whether the
beneÞt has safely reached the hands of the plainti­. The green land has no
problem, owing to the unbroken chain of assignments. I am disposed to
think that that is su±cient to entitle the plainti­ to relief, and that the
plainti­Õs right to relief would be no greater at the present time if it were
E held that it also had the beneÞt of the covenant in its capacity as owner of
the red land.ÕÕ
Nevertheless, he went on to consider annexation, which was, of course,
material to the question whether the density covenant was enforceable for
the beneÞt of the red land. He explained, at p 603:

F
ÔÔAn express assignment of the beneÞt of a covenant is not necessary if
the beneÞt of the covenant is annexed to the land. In that event, the
beneÞt will pass automatically on a conveyance of the land, without
express mention, because it is annexed to the land and runs with it.ÕÕ
28 As I have said, the object of the covenant in the 1971 conveyance
was expressed to be ÔÔso as not to reduce the number of units which the
G
vendor might eventually erect on the retained land under the existing
planning consentÕÕ. The retained land was not deÞned; but Brightman LJ had
held, at p 599, that, on the true construction of the 1971 conveyance to Mill
Lodge, ÔÔthe retained land means the red and the green land and the small
additional areas comprised in the site, other, of course, than the blue and the
pink landÕÕ. So there was no doubt as to the identity of the retained land.
That is important to a proper understanding of the following passage in his
H judgment, at p 604:
ÔÔ[Counsel for Mill Lodge] submitted that there were three possible
views about section 78. One view, which he described as Ôthe orthodox
viewÕ hitherto held, is that it is merely a statutory shorthand for reducing
the length of legal documents. A second view, which was the one that
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[counsel] was inclined to place in the forefront of his argument, is that the A
section only applies, or at any rate only achieves annexation, when the
land intended to be beneÞted is signiÞed in the document by express
words or necessary implication as the intended beneÞciary of the
covenant. A third view is that the section applies if the covenant in fact
touches and concerns the land of the covenantee, whether that be gleaned
from the document itself or from evidence outside the document. For
B
myself, I reject the narrowest interpretation of section 78, the supposed
orthodox view, which seems to me to ßy in the face of the wording of the
section. Before I express my reasons I will say that I do not Þnd it
necessary to choose between the second and third views because, in my
opinion, this covenant relates to land of the covenantee on either
interpretation of section 78. Clause 5(iv) shows clearly that the covenant
is for the protection of the retained land and that land is described in C
clause 2 as Ôany adjoining or adjacent property retained by the vendorÕ.
This formula is su±cient for annexation purposes: see Rogers v Hosegood
[1900] 2 Ch 388. There is in my judgment no doubt that this covenant
Ôrelated to the land of the covenanteeÕ, or, to use the old-fashioned
expression, that it touched and concerned the land, even if [counsel] is
correct in his submission that the document must show an intention to D
beneÞt identiÞed land. The result of such application is that one must
read clause 5(iv) as if it were written: ÔThe purchaser hereby covenants
with the vendor and its successors in title and the persons deriving title
under it or them, including the owners and occupiers for the time being of
the retained land, that in carrying out the development of the blue land
the purchaser shall not build at a greater density than a total of 300
dwellings so as not to reduce, etc.Õ I leave out of consideration section 79 E
as unnecessary to be considered in this context, since Mill Lodge is the
original covenantor.ÕÕ
29 It is clear that the court approached the question of annexation in the
Federated Homes case [1980] 1 WLR 594 on the basis that the density
covenant was taken for the beneÞt of retained land which could be identiÞed
in the 1971 conveyance. Brightman LJ expressed his conclusion in these F
terms, at p 605:
ÔÔIf, as the language of section 78 implies, a covenant relating to land
which is restrictive of the user thereof is enforceable at the suit of
(1) a successor in title of the covenantee, (2) a person deriving title under
the covenantee or under his successors in title, and (3) the owner or
occupier of the land intended to be beneÞted by the covenant, it must, in G
my view, follow that the covenant runs with the land, because ex
hypothesi every successor in title to the land, every derivative proprietor
of the land and every other owner and occupier has a right by statute to
the covenant. In other words, if the condition precedent of section 78 is
satisÞedÑthat is to say, there exists a covenant which touches and
concerns the land of the covenanteeÑthat covenant runs with the land for H
the beneÞt of his successors in title, persons deriving title under him or
them and other owners and occupiers.ÕÕ
There is, in e­ect, statutory annexation of the beneÞt of the covenant to ÔÔthe
land intended to be beneÞted by the covenantÕÕ. The words which I have
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A emphasised, which are incorporated by Brightman LJ in the passage which

I have just cited, are derived, of course, from section 78(1):
ÔÔFor the purposes of this subsection . . . Ôsuccessors in titleÕ shall be
deemed to include the owners and occupiers for the time being of the land
of the covenantee intended to be beneÞted.ÕÕ
30 The decision of this court in the Federated Homes case leaves open
B
the question whether section 78 of the 1925 Act only e­ects annexation
when the land intended to be beneÞted is described in the instrument itself
(by express words or necessary implication, albeit that it may be necessary to
have regard to evidence outside the document fully to identify that land) or
whether it is enough that it can be shown, from evidence wholly outside the
document, that the covenant does in fact touch and concern land of the
C covenantee which can be identiÞed.
31 It is clear from Brightman LJÕs reference in the Federated Homes case
[1980] 1 WLR 594, 604cÐg to Rogers v Hosegood [1900] 2 Ch 388 that it is
su±cient for the conveyance to describe the land intended to be beneÞted in
terms which enable it to be identiÞed from other evidence. In Rogers v
Hosegood the covenant was given for the beneÞt of the vendors, their heirs
and assigns ÔÔand others claiming under them to all or any of their lands
D adjoining or near to theÕÕ premises conveyed. The Court of Appeal held that
to be a su±cient description, at pp 403Ð404:
ÔÔThe real and only di±culty arises on the questionÑwhether the
beneÞt of the covenants has passed to the assigns of Sir John Millais as
owners of the plot purchased by him on 25 March 1873, there being no
evidence that he knew of these covenants when he bought. Here, again,
E the di±culty is narrowed, because by express declaration on the face of
the conveyances of 1869 the beneÞt of the two covenants in question was
intended for all or any of the vendorÕs lands near to or adjoining the plot
sold, and therefore for (among others) the plot of land acquired by Sir
John Millais . . .ÕÕ
32 The question left open in the Federated Homes case [1980] 1 WLR
F 594 had, I think, already been answered in the judgment of this court in
Marquess of Zetland v Driver [1939] Ch 1, a decision not cited in the
Federated Homes case. The applicable principles were restated in the
following passage, at pp 7Ð8:
ÔÔCovenants restricting the user of land imposed by a vendor upon a
sale fall into three classes: (i) covenants imposed by the vendor for his
G own beneÞt; (ii) covenants imposed by the vendor as owner of other land,
of which that sold formed a part, and intended to protect or beneÞt the
unsold land; and (iii) covenants imposed by a vendor upon a sale of land
to various purchasers who are intended mutually to enjoy the beneÞt of
and be bound by the covenants: Osborne v Bradley [1903] 2 Ch 446, 450.
Covenants of the Þrst class are personal to the vendor and enforceable by
him alone unless expressly assigned by him. Covenants of the second
H
class are said to run with the land and are enforceable without express
assignment by the owner for the time being of the land for the beneÞt of
which they were imposed. Covenants of the third class are most usually
found in sales under building scheme, although not strictly conÞned to
such sales. It is not suggested that the present covenant falls within this
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class. Nor will it assist the appellant if it falls within the Þrst class, since A
he was not the original covenantee or an express assignee from him. If,
therefore, the appellant is entitled to sue on this covenant it must fall
within the second class above mentioned. Such covenants can only be
validly imposed if they comply with certain conditions. Firstly, they must
be negative covenants . . . Secondly, the covenant must be one that
touches or concerns the land, by which is meant that it must be imposed
B
for the beneÞt or to enhance the value of the land retained by the vendor
or some part of it, and no such covenant can ever be imposed if the sale
comprises the whole of the vendorÕs land . . . Thirdly, the land which is
intended to be beneÞted must be so deÞned as to be easily ascertainable,
and the fact that the covenant is imposed for the beneÞt of that particular
land should be stated in the conveyance and the persons or the class of
persons entitled to enforce it. The fact that the beneÞt of the covenant is C
not intended to pass to all persons into whose hands the unsold land may
come is not objectionable so long as the class of persons intended to have
the beneÞt of the covenant is clearly deÞned.ÕÕ (Emphasis added.)
33 In its later decision in the Federated Homes case [1980] 1 WLR 594
this court held that the provisions of section 78 of the 1925 Act had made it
unnecessary to state, in the conveyance, that the covenant was to be D
enforceable by persons deriving title under the covenantee or under his
successors in title and the owner or occupier of the land intended to be
beneÞted, or that the covenant was to run with the land intended to be
beneÞted; but there is nothing in that case which suggests that it is no longer
necessary that the land which is intended to be beneÞted should be so deÞned
that it is easily ascertainable. In my view, that requirement, identiÞed in
Marquess of Zetland v Driver [1939] Ch 1 remains a necessary condition for E
annexation.
34 There are, I think, good reasons for that requirement. A restrictive
covenant a­ecting land will not be enforceable in equity against a purchaser
who acquires a legal estate in that land for value without notice of the
covenant. A restrictive covenant imposed in an instrument made after 1925
is registrable as a land charge under class D(ii): section 10(1) of the Land F
Charges Act 1925 and, now, section 2(5) of the Land Charges Act 1972. If
the title is registered, protection is e­ected by entering notice of the
restrictive covenant on the register: section 50 of the Land Registration Act
1925 and, now, section 11 of the Land Registration Act 2002. Where
practicable the notice shall be by reference to the instrument by which the
covenant is imposed and a copy or abstract of that instrument shall be Þled
at the registry: section 50(1) of the Land Registration Act 1925 and G
section 3(5) of the Land Charges Act 1972. It is obviously desirable that a
purchaser of land burdened with a restrictive covenant should be able not
only to ascertain, by inspection of the entries on the relevant register, that
the land is so burdened, but also to ascertain the land for which the beneÞt of
the covenant was takenÑso that he can identify who can enforce the
covenant. That latter object is achieved if the land which is intended to be
H
beneÞted is deÞned in the instrument so as to be easily ascertainable. To
require a purchaser of land burdened with a restrictive covenant, but where
the land for the beneÞt of which the covenant was taken is not described in
the instrument, to make inquiries as to what (if any) land the original
covenantee retained at the time of the conveyance and what (if any) of that
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A retained land the covenant did, or might have, ÔÔtouched and concernedÕÕ
would be oppressive. It must be kept in mind that (as in the present case) the
time at which the enforceability of the covenant becomes an issue may be
long after the date of the instrument by which it was imposed.
35 In Marquess of Zetland v Driver [1939] Ch 1 the vendor was tenant
for life of settled land at Redcar in Yorkshire. By a conveyance dated
10 September 1926 a part of that land (subsequently known as no 200, Lord
B
Street) was conveyed to a purchaser, Mr David Goodswen. The purchaser
covenanted
ÔÔto the intent and so as to bind as far as practicable the said property
hereby conveyed into whosesoever hands the same may come and to
beneÞt and protect such part or parts of the lands in the Borough
Township or Parish of Redcar . . . now subject to the settlement (a) as
C shall for the time being remain unsold or (b) as shall be sold by the vendor
or his successors in title with the express beneÞt of this covenant . . .ÕÕ
that he would observe the restrictions and stipulations set out in the second
schedule to the conveyance. Those restrictions included a restriction on use
which, in the opinion of the vendor, might be detrimental to him or the
owners or occupiers of any adjoining property in the neighbourhood. In
D 1935 Mr Goodswen conveyed no 200, Lord Street to the defendant,
Mr Driver, who thereafter sought to use it for the sale of fried Þsh. The
plainti­, as successor to the original covenantee, took the view that that use
was detrimental to adjoining property in the neighbourhood and sought to
enforce the covenant.
36 After setting out the principles in the passage to which I have already
E referred, the Court of Appeal said, at pp 8Ð9:
ÔÔApplying these conditions to the present case, the covenant sued upon
appears to comply with them. The covenant is restrictive; it is expressly
stated in the conveyance to be for the beneÞt of the unsold part of the land
comprised in the settlement and such land is easily ascertainable, nor is it
suggested that at the date of the conveyance the land retained was not
F
capable of being beneÞted by the restrictions, and lastly the appellant is
the successor in title of the original covenantee and as such is the estate
owner of part of the land unsold which is subject to the settlement.ÕÕ
(Emphasis added.)
But the court went on to say, at p 10:
ÔÔIt is to be noticed in the present case that the beneÞt of the covenant is
G not intended to pass to a purchaser without express assignment. It is not
necessary for us to express any opinion as to what would be the e­ect of a
sale of part of the settled property with an express assignment of the
covenant; but, if such a purchaser could enforce the covenant, it could
only be for so long as some successor in title of the original covenantee
retained some part of the settled property, since such a person alone can
form the requisite opinion. For these reasons the appeal must be allowed.
H
The appellant is entitled to the injunction which he seeks subject to two
limitations. In the Þrst place the injunction must be limited to fried
Þsh . . . because the opinion of the appellant as to the nuisance was
conÞned to fried Þsh, and secondly, the period of the injunction must be
conÞned to so long as the appellant or some successor in title of the
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original vendor retains unsold any part of the settled property for the A
beneÞt of which the covenant was imposed.ÕÕ (Emphasis added.)
It is important to keep in mind that the covenant was taken to beneÞt such
part or parts of the lands subject to the settlement ÔÔas shall for the time being
remain unsoldÕÕ. The words which I have emphasised make clear that the
land intended to be beneÞted may be deÞned so as to exclude land
subsequently sold o­ from the vendorÕs estate. That principle was B
recognised in the recent decision of this court in Dano Ltd v Earl Cadogan
[2003] EWCA Civ 782.
37 To my mind, the decision in Marquess of Zetland v Driver [1939]
Ch 1 goes much of the way to answer a second question which this court did
not need to address in the Federated Homes case [1980] 1 WLR 594:
whether the e­ect of the section 78 of the Law of Property Act 1925 is
displaced by a contrary intention manifested in the instrument itself. But C
that question was addressed, speciÞcally, in Roake v Chadha [1984] 1 WLR
40, to which I now turn.
38 In Roake v Chadha land forming part of what was formerly known
as the Sudbury Court Estate in North Wembley was laid out in lots and the
individual lots sold o­ to purchasers in the 1930s. The individual lots were
conveyed using a standard form of transfer. The schedule to the transfer D
contained a restriction on building on the land conveyed; in particular it
required that no building should be erected other than one private dwelling
house at a cost of not less than £500 and that plans drawings and elevations
should Þrst be submitted for approval by the vendor company. The
covenant was imposed in the following terms:
ÔÔAnd the purchaser to the intent and so as to bind (so far as E
practicable) the land hereby transferred into whosoever hands the same
may come . . . hereby covenants with the vendors but so that this
covenant shall not enure for the beneÞt of any owner or subsequent
purchaser of any part of the vendorÕs Sudbury Court Estate at Wembley
unless the beneÞt of this covenant shall be expressly assigned that he the
purchaser and his successors in title will observe and perform all and
every the provisions conditions and stipulations set out in the F
schedule hereto so far as they relate to or a­ect the premises hereby
transferred or any part thereof.ÕÕ
The defendants were successors in title to the purchaser of one of the former
lots (no 4, Audrey Gardens) which had been sold and conveyed by a transfer
dated 4 April 1934. They proposed to erect an additional house on that
land. It was common ground that that would be in contravention of the G
restriction in the conveyance. The plainti­s were the successors in title to the
purchasers of two other lots on the estate (no 1, Audrey Gardens and
no 104, Abbotts Drive), which had been conveyed by transfers dated,
respectively, 28 May 1934 and 22 March 1935. Neither transfer contained
an express assignment of the beneÞt of the covenant imposed by the transfer
of 4 April 1934, nor had the beneÞt of that covenant been expressly
H
transferred by any other instrument. Nevertheless, the plainti­s sought a
declaration that they were entitled to the beneÞt of that covenant and an
order restraining the defendants from building in breach of it.
39 It was accepted on behalf the plainti­s that the express words of the
covenant appeared to exclude annexation. It was accepted, also, that their
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A case could not be advanced on the basis of a building scheme. But it was said
that, nevertheless, the covenant imposed by the transfer of 4 April 1934 had
become annexed to the land then forming part of the Sudbury Court Estate
and subsequently conveyed out of that estate by the transfers of 28 May
1934 and 22 March 1935 by the operation of section 78 of the 1925 Act.
Reliance was placed on the contrast between the language of section 78 and
section 79 (burden of covenants relating to land) of that Act. Section 79(1) is
B
in these terms:
ÔÔA covenant relating to any land of a covenantor or capable of being
bound by him, shall, unless a contrary intention is expressed, be deemed
to be made by the covenantor on behalf of himself his successors in title
and the persons deriving title under him or them, and, subject as
aforesaid, shall have e­ect as if such successors and other persons were
C expressed.ÕÕ (Emphasis added.)
It was pointed out, correctly, that the words which I have emphasised are not
found in section 78(1) of the Act. So, it was said, the legislature must have
intended the provisions of section 78 (beneÞt of covenants relating to land)
to be mandatory; it must have intended that those provisions could not be
excluded by a contrary intention, however clearly expressed.
D 40 Judge Paul Baker QC, sitting as a judge of the High Court, rejected
that submission. After analysing the judgment of Brightman LJ in Federated
Homes Ltd v Mill Lodge Properties Ltd [1980] 1 WLR 594, and pointing
out that no reason of policy had been suggested to explain why section 78 of
the 1925 Act should be mandatory, the judge said [1984] 1 WLR 40, 46:
ÔÔI am thus far from satisÞed that section 78 has the mandatory
E operation which [counsel] claimed for it. But if one accepts that it is not
subject to a contrary intention, I do not consider that it has the e­ect of
annexing the beneÞt of the covenant in each and every case irrespective of
the other express terms of the covenant. I note that Brightman LJ in the
Federated Homes case did not go so far as that, for he said, at p 606: ÔI Þnd
the idea of the annexation of a covenant to the whole of the land but not
F
to a part of it a di±cult conception fully to grasp. I can understand that a
covenantee may expressly or by necessary implication retain the beneÞt of
a covenant wholly under his own control, so that the beneÞt will not pass
unless the covenantee chooses to assign; but I would have thought, if the
beneÞt of a covenant is, on a proper construction of a document, annexed
to the land, prima facie it is annexed to every part thereof, unless the
contrary clearly appears.Õ So at least in some circumstances
G Brightman LJ is considering that despite section 78 the beneÞt may be
retained and not pass or be annexed to and run with land. In this
connection, I was also referred by [counsel for the defendants] to
ElphinstoneÕs Covenants A­ecting Land (1946), p 17, where it is said in a
footnote: Ôbut it is thought that, as a covenant must be construed as a
whole, the court would give due e­ect to words excluding or modifying
the operation of this section . . .Õ The true position as I see it is that even
H
where a covenant is deemed to be made with successors in title as
section 78 requires, one still has to construe the covenant as a whole to see
whether the beneÞt of the covenant is annexed. Where one Þnds, as in the
Federated Homes case, the covenant is not qualiÞed in any way,
annexation may be readily inferred; but where, as in the present case, it is
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Chadwick LJ

expressly provided: Ôthis covenant shall not enure for the beneÞt of any A
owner or subsequent purchaser of any part of the vendorÕs Sudbury Court
Estate at Wembley unless the beneÞt of this covenant shall be expressly
assigned . . .Õ one cannot just ignore these words. One may not be able to
exclude the operation of the section in widening the range of the
covenantees, but one has to consider the covenant as a whole to
determine its true e­ect. When one does that, then it seems to me that the
B
answer is plain and in my judgment the beneÞt was not annexed. That is
giving full weight to both the statute in force and also what is already
there in the covenant.ÕÕ
41 I respectfully agree, Þrst, that it is impossible to identify any reason
of policy why a covenantor should not, by express words, be entitled to limit
the scope of the obligation which he is undertaking; nor why a covenantee
should not be able to accept a covenant for his own beneÞt on terms that the C
beneÞt does not pass automatically to all those to whom he sells on parts of
his retained land. As Brightman LJ pointed out, in the passage cited by Judge
Paul Baker QC, a developer who is selling o­ land in lots might well want to
retain the beneÞt of a building restriction under his own control. Where, as
in Roake v Chadha [1984] 1 WLR 40 and the present case, development
land is sold o­ in plots without imposing a building scheme, it seems to me D
very likely that the developer will wish to retain exclusive power to give or
withhold consent to a modiÞcation or relaxation of a restriction on building
which he imposes on each purchaser; unfettered by the need to obtain the
consent of every subsequent purchaser to whom (after imposing the
covenant) he has sold o­ other plots on the development land. I can see no
reason why, if original covenantor and covenantee make clear their mutual
intention in that respect, the legislature should wish to prevent e­ect being E
given to that intention.
42 Second, it is important to keep in mind that, for the purposes of its
application to restrictive covenantsÑwhich is the context in which this
question arises where neither of the parties to the dispute were, themselves,
party to the instrument imposing the covenant or express assignees of the
beneÞt of the covenantÑsection 78 of the 1925 Act deÞnes ÔÔsuccessors in F
titleÕÕ as the owners and occupiers of the time being of the land of the
covenantee intended to be beneÞted. In a case where the parties to the
instrument make clear their intention that land retained by the covenantee at
the time of the conveyance e­ected by the transfer is to have the beneÞt of
the covenant only for so long as it continues to be in the ownership of the
original covenantee, and not after it has been sold on by the original
covenanteeÑunless the beneÞt of the covenant is expressly assigned to the G
new ownerÑthe land of the covenantee intended to be beneÞted is identiÞed
by the instrument as (i) so much of the retained land as from time to time has
not been sold o­ by the original covenantee and (ii) so much of the retained
land as has been sold o­ with the beneÞt of an express assignment, but as not
including (iii) so much of the land as has been sold o­ without the beneÞt of
an express assignment. I agree with the judge in Roake v Chadha [1984]
H
1 WLR 40 that, in such a case, it is possible to give full e­ect to the statute
and to the terms of the covenant.
43 This approach to section 78 of the 1925 Act provides, as it seems to
me, the answer to the question why, if the legislature did not intend to
distinguish between the e­ect of section 78 (mandatory) and the e­ect of
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Chadwick LJ

A section 79 (subject to contrary intention), it did not include the words

ÔÔunless a contrary intention is expressedÕÕ in the Þrst of those sections. The
answer is that it did not need to. The qualiÞcation ÔÔsubject to contrary
intentionÕÕ is implicit in the deÞnition of ÔÔsuccessors in titleÕÕ which appears
in section 78(1); that is the e­ect of the words ÔÔthe land of the covenantee
intended to be beneÞtedÕÕ. If the terms in which the covenant is imposed
showÑas they did in Marquess of Zetland v Driver [1939] Ch 1 and in
B
Roake v Chadha [1984] 1 WLR 40Ñthat the land of the covenantee
intended to be beneÞted does not include land which may subsequently be
sold o­ by the original covenantee in circumstances where (at the time of
that subsequent sale) there is no express assignment of the beneÞt of the
covenant, then the owners and occupiers of the land sold o­ in those
circumstances are not ÔÔowners and occupiers for the time being of the land
C of the covenantee intended to be beneÞtedÕÕ; and so are not ÔÔsuccessors in
titleÕÕ of the original covenantee for the purposes of section 78(1) in its
application to covenants restrictive of the user of land.
44 By contrast, the deÞnition of ÔÔsuccessors in titleÕÕ for the purposes of
section 79(1) appears in subsection (2) of that section: ÔÔthe owners and
occupiers for the time being of such landÕÕ. In that context ÔÔsuch landÕÕ
means ÔÔany land of a covenantor or capable of being bound by him [to
D which the covenant relates].ÕÕ The counterpart in section 79 of ÔÔland of the
covenantee intended to be beneÞtedÕÕ (in section 78(1)) is ÔÔsuch landÕÕ. ÔÔSuch
landÕÕ in that context means the land referred to in section 79(1); that is to
say ÔÔany land of a covenantor or capable of being bound by himÕÕ. But
section 79(1) imposes two qualiÞcations; (i) the land must be land to which
the covenant relates and (ii) there must be no expression of contrary
E intention. The section could, perhaps, have described the land as ÔÔland of
the covenantor (or capable of being bound by him) intended to be
burdenedÕÕ. But the e­ect would have been the same. If the parties did not
intend that land, burdened while in the ownership of the covenantor, should
continue to be subject to the burden in hands of his successors (or some of his
successors), they could say so. On a true analysis there is no di­erence in
treatment in the two sections. There is a di­erence in the drafting technique
F used to achieve the same substantive result. That may well simply reßect the
legislative history of the two sections. Section 78(1) of the 1925 Act
re-enacted section 58 of the Conveyancing and Law of Property Act 1881
(44 & 45 Vict c 41) as applied by section 96(3) of the Law of Property Act
1922 and amended by section 3 of, and paragraph 11 of Schedule 3 to, the
Law of Property (Amendment) Act 1924. Section 79 was a new provision,
G Þrst introduced in the 1925 Act.

Is the beneÞt of the covenants annexed in the present case?

45 As I have said, there is no express annexation of the covenants
contained in the two Arthur conveyances (dated 2 February 1928 and
15 February 1933) or in the Þrst of the Roberts conveyances (dated
21 November 1930). The question, in relation to those three conveyances, is
H
whether the land intended to be beneÞted can be identiÞed (from a
description, plan or other reference in the conveyance itself, but aided, if
necessary, by external evidence to identify the land so described, depicted
or otherwise referred to) so as to enable statutory annexation under
section 78(1) of the 1925 Act to have e­ect. The land conveyed by the two
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Chadwick LJ

Arthur conveyances is described by reference to plots numbered 5 and 6 on A

the Fee Farm Estate at Claygate; but there is nothing in either conveyance
which points to an intention that the covenant is taken for the beneÞt of
other land (and, if so, what other land) on the Fee Farm Estate; and nothing
in either conveyance which enables the Fee Farm Estate to be identiÞed.
There is no reference to the Fee Farm Estate in the Þrst (or the second) of the
Roberts conveyances.
B
46 The covenants in the two Humphreys conveyances (dated 22 August
1928 and 3 November 1933) and in the second of the Roberts conveyances
(dated 3 November 1933) did contain express words of annexation: ÔÔFor the
beneÞt of the property at Claygate aforesaid belonging to [the company] or
the part thereof for the time being remaining unsoldÕÕ (emphasis added). The
question, in relation to those three conveyances, is whether the e­ect of the
words which I have emphasised is to limit annexation to so much of the land C
belonging to the Mitchell Brothers company at the time of the conveyance as
thereafter remained for the time being unsold.
47 In my view the beneÞt of the covenants is not annexed to the land
now owned by Mrs McAllisterÑthat being land sold o­ by the original
covenantees in 1936 under the Wing conveyance. I reach that conclusion for
the following reasons.
D
48 It seems to me that the e­ect of the express words of annexation
contained in the two Humphreys conveyances and in the second of the
Roberts conveyances was to identify the land of the covenantee intended to
be beneÞted, for the purposes of section 78(1) of the Law of Property Act
1925, in terms which excluded land which was in the ownership of the
company at the time of the relevant conveyance but which, thereafter, was
sold o­ by the company. That, I think, is the clear meaning of the words ÔÔthe E
property at Claygate aforesaid belonging [to the company] or the part
thereof for the time being remaining unsoldÕÕ. The property conveyed is
described by reference to plots ÔÔbeing part of the Fee Farm Estate Claygate
SurreyÕÕ. In that context ÔÔthe property at Claygate aforesaid belonging [to
the company]ÕÕ must exclude so much of the Fee Farm Estate as had already
been sold o­Ñand so does not belong to the company at the date of the
F
conveyance. In the circumstances that the conveyance is made pursuant to a
contract (to which reference is made in the recitals to the conveyance) it
seems to me reasonably clear that the words ÔÔbelonging [to the company]ÕÕ
have the e­ect of excluding, also, the land conveyedÑas the parties must be
taken to have intended in any event. It was submitted to us that that was the
object and e­ectÑand the only object and e­ectÑof the words ÔÔremaining
unsoldÕÕ. That submission might have some forceÑalthough not, I think, G
much forceÑif it were not for the additional words ÔÔfor the time beingÕÕ.
Taken as a whole the description of the land to be beneÞted does not read ÔÔso
much of the Fee Farm Estate as remains unsold after this conveyanceÕÕ; it
reads ÔÔso much of the Fee Farm Estate as for the time remains unsoldÕÕ. In
that context, as it seems to me, ÔÔfor the time beingÕÕ means ÔÔfrom time to
timeÕÕ. And that, of course, makes good sense for the reason to which I have
H
already referred. Where development land is sold o­ in plots without
imposing a building scheme, it is likely that the developer will wish to retain
exclusive power to give or withhold consent to a modiÞcation or relaxation
of a restriction on building which he imposes on each purchaser; unfettered
by the need to obtain the consent of every subsequent purchaser to whom
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[2004] 1 WLR Crest Nicholson Ltd v McAllister (CA)
Chadwick LJ

A (after imposing the covenant) he has sold o­ other plots on the development
land. If it were otherwise he would create a situation in which the ability of a
purchaser of one plot to enforce covenants against the owner of another plot
depended on the order in which the plots had been sold o­; a situation
described by Ungoed-Thomas J in Eagling v Gardner [1970] 2 All ER 838,
846d, as ÔÔa building scheme in AliceÕs WonderlandÕÕ.
49 In reaching the conclusion which I have as to the e­ect of the words
B
of annexation in the three conveyances in which there are such words, I have
had regard to the decision of this court in Whitgift Homes Ltd v Stocks
[2001] EWCA Civ 1732. The words of annexation in the relevant
conveyances in that caseÑthat is to say, in the conveyances dated
respectively 11 March 1932 and 23 March 1932 to the predecessors in title
of the defendants to the actionÑappear at para 32 in the judgment of
C Jonathan Parker LJ:
ÔÔFor the beneÞt of the companyÕs estate at Croydon the purchaser . . .
covenants with the company that the purchaser will observe and perform
the stipulations and conditions set out in the second schedule hereto . . .ÕÕ
The principal issue on the appeal was whether the estate had been sold o­
under a building schemeÑit was held that there was no building schemeÑ
D
but the question of annexation arose in relation to the alternative claims of
three of the 55 claimants who derived title from conveyances which were
later in date than the two which I have mentioned. In addressing the
annexation issue in that context, Jonathan Parker LJ observed, at para 104:
ÔÔThe reference to Ôthe companyÕs estate at CroydonÕ and to Ôthe
vendorsÕ estate at CroydonÕ are in my judgment entirely apt to refer to
E
such parts of that estate as were retained by the developer, and by virtue
of section 78(1) the covenants are deemed to have been made with the
developer and its successors in title.ÕÕ
That observationÑwhich, if I may respectfully say so, seems to me entirely
consistent with earlier authorities, including those to which I have referred
in this judgmentÑis of no assistance to Mrs McAllister in the present case.
F
The relevant words of annexation in the present case (in those conveyances
in which there are express words of annexation) are not ÔÔfor the beneÞt of
the companyÕs Fee Farm Estate at ClaygateÕÕ; they are ÔÔfor the beneÞt of . . .
the part thereof for the time being remaining unsoldÕÕ. There was evidence in
the Whitgift case that some conveyances of plots on the vendorsÕ Croydon
estate had additional words in that formÑsee para 45 in the judgment of
G Jonathan Parker LJÑbut those conveyances were not under consideration in
relation to the annexation issue and the observation to which I have referred
is not directed to them.
50 It seems to me that there is nothing in the Þrst of the Roberts
conveyances (dated 21 November 1930) which enables the court to identify,
even with the aid of external evidence to assist general words of description,
what land (if any) was intended to be beneÞted by the covenants. As I have
H
said, there is no reference in that conveyance to the Fee Farm Estate or to
plots on that estate. The reason is that the dwelling house known as
ÔÔMorwennaÕÕ had already been built on the land conveyed by that
conveyance, and the land was described by reference to that name and by
reference to a plan. The plan contained no reference to the Fee Farm Estate.
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It showed land adjoining the plot conveyed to be in the ownership of the A

Mitchell Brothers; but that land did not extend to the land of which
Mrs McAllister is now owner. In those circumstances section 78 of the Law
of Property Act 1925 is of no assistance to Mrs McAllister. She cannot show
that she is the owner or occupier of ÔÔland of the covenantee intended to be
beneÞtedÕÕ.
51 The position in relation to the land conveyed by the two Arthur
B
conveyances is less obvious. As I have said, in the Þrst of those conveyances
the land conveyed is described as ÔÔsituate and being plot no 6 and part of
plot no 5 on the Fee Farm Estate at ClaygateÕÕ; and, in the second, the land
conveyed is described as ÔÔsituate and partly in the rear of plot no 6 and
partly in the rear of plot no 5 on the Fee Farm Estate at ClaygateÕÕ. In each
case the land conveyed is deÞned, by measurement, on a plan drawn on the
conveyance. In neither case does the plan show any other numbered plots, C
or even refer to the Fee Farm Estate. In the case of the Þrst conveyance the
plan shows no other land said to be in the ownership of the Mitchell brothers
or their company. There is nothing in that conveyance to show what land (if
any) the brothers or their company own in the neighbourhood; in particular,
there is nothing to show whether, at the date of that conveyance, they own
any part of the Fee Farm Estate. In the case of the second conveyance the
plan does show land in the ownership of the company on each side of, and D
adjoining, the land conveyed. But the adjoining land shown by the plan to
be in the ownership of the company does not extend to the land now owned
by Mrs McAllister.
52 In those circumstances I have reached the following conclusions in
relation to the land conveyed by the two Arthur conveyances: (i) there is no
su±cient indication, in either conveyance, that the covenants are taken for E
the beneÞt of land comprising the whole (or such parts as remained unsold)
of the Fee Farm EstateÑalthough, if there had been, evidence as to the extent
of the Fee Farm Estate then unsold would, I think, have been admissible;
(ii) there is no su±cient indication in the Þrst conveyance (standing alone)
that the covenant is taken for the beneÞt of any land then owned (and to be
retained) by the Mitchell brothers or their company; (iii) there is some
indication in the second conveyance that the covenant is taken for the beneÞt F
of the adjoining land shown on the plan as being in the ownership of the
company; (iv) it could be said that the e­ect of the second conveyance was to
rea±rm, by reference to the plan drawn on that conveyance, the covenants
in the Þrst conveyance; but (v) the land shown on the plan drawn on the
second conveyance as being in the ownership of the company does not
extend to the land now in the ownership of Mrs McAllister. It follows that, G
in relation to the Arthur conveyances also, section 78 of the Law of Property
Act 1925 is of no assistance to Mrs McAllister. She cannot show that she is
the owner or occupier of ÔÔland of the covenantee intended to be beneÞtedÕÕ.

The meaning and e­ect of the restrictions

53 It follows from the conclusion which I have reached in relation to
H
annexation that I Þnd it unnecessary to decide either (i) whether the e­ect of
the user restriction is to preclude the use of each of the plots conveyed to that
of a single private dwelling house (or for professional purposes) or
(ii) whether the e­ect of the building restriction is now spent. For
completeness, however, I would add that I see no reason to di­er from the
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[2004] 1 WLR Crest Nicholson Ltd v McAllister (CA)
Chadwick LJ

A conclusions reached by the judge on those issues. On those issues I think

that he was right for the reasons which he gave. But, of course, he was not
asked to consider the question of annexation which, to my mind, makes his
conclusions on those issues academic.

Conclusion
B 54 I would allow this appeal and make no order on the cross appeal.
I would vary the judgeÕs order so as to declare that the covenants in the Þrst
six conveyances listed in the schedule to the claim form are not enforceable
by Mrs McAllister as the owner of Newlyn.
ARDEN LJ
55 I agree.
C
AULD LJ
56 I also agree.
Appeal allowed.
No order on respondentÕs notice.
Permission to appeal refused.
D
14 July. The Appeal Committee of the House of Lords (Lord Hope of
Craighead, Lord Scott of Foscote and Lord Walker of Gestingthorpe)
dismissed a petition by the defendant for leave to appeal.
Solicitors: Davies Arnold Cooper; Mundays, Cobham.

E
JRS

F
House of Lords

*Shamil Bank of Bahrain EC v Beximco Pharmaceuticals Ltd

and others
2004 July 20 Lord Nicholls of Birkenhead, Lord Ho­mann
G and Lord Scott of Foscote

PETITION by the defendants for leave to appeal from the decision of the
Court of Appeal [2004] EWCA Civ 19; [2004] 1 WLR 1784
Leave to appeal was refused.