Menu

Legal and procedural wrangles: Restrictive covenants and res judicata

Print publication

10/07/2017

Landowners, developers and property professionals will be aware that section 84 (1) of the Law of Property Act 1925 (LPA) provides for the modification or removal, in certain circumstances, of restrictive covenants affecting land both in a freehold and leasehold context; and that section 84 (2) LPA provides for the determination of the nature, extent and enforceability of such a covenant.  They might not be aware, however, of the subtle but crucial distinction that, whereas the Lands Tribunal is afforded jurisdiction under section 84 (1), only the Civil Courts are afforded jurisdiction under both sections.  This distinction can have practical implications when it comes to the determination of disputes between parties in relation to the enforceability of restrictive covenants.

Restrictive covenants and res judicata

The Upper Tribunal (Lands Chamber) has the power to modify or remove restrictive covenants but only the Court has jurisdiction to determine a covenant’s validity and enforceability. This means therefore that any determination made or view expressed by the Upper Tribunal (Lands Chamber) regarding the validity or enforceability of a covenant is not binding on the Court. This was precisely the issue that arose in Doberman v Watson [1].

There is a fundamental principle that there should be finality to litigation, also known as res judicata. It is in the public interest that parties should not face repeated litigation in respect of the same set of circumstances and the Court therefore has the power to strike out claims which amount to an abuse of process. Although there is no specific definition of ‘abuse of process’, this can arise where attempts are made to re-litigate and/or where cases or issues are advanced in a way that is inconsistent with an earlier judgment.

In Doberman v Watson, the Claimants sought a declaration from the Court, under section 84 (2), that their land was no longer affected by a restrictive covenant because the covenant was purely personal and there was no longer any party who was capable of enforcing it. The Defendants applied to strike out the claim on the grounds of res judicata because, in fact, the Upper Tribunal (Lands Chamber) had previously refused an application made by the Claimants’ predecessor in title for removal of the very same covenant under section 84 (1) and, when doing so, had proceeded on the basis that the covenant was one of which all owners of property within the relevant estate enjoyed the benefit, by virtue of an enforceable building scheme.

Outcome

The court refused the Defendants’ application to strike out the claim. Section 84 draws a clear distinction between the functions of subsection (1) and subsection (2) (and, respectively, between the functions of the Upper Tribunal (Lands Chamber) and the Court in determining disputes).  The current claim did not therefore amount to re-litigation or advancing a case in a manner inconsistent with an earlier judgment. This was principally because the Upper Tribunal (Lands Chamber) did not have jurisdiction over the subject matter falling within section 84(2). Even if it had been taken to have made a decision on such matters, such decision was not final and it made no determination upon a question raised in later litigation – it had simply proceeded on a particular footing (that is, that the covenant was enforceable by anyone owing property within the relevant estate), but this bound no one including the Court.  As such, it was not an abuse of process, nor had any estoppel arisen.

WM Comment

The Doberman case and a close analysis of Section 84 demonstrate how a  thorough knowledge of all relevant legal and procedural provisions  is essential to ensure that any strategy in relation to the enforceability or modification or discharge of restrictive covenants is  appropriate to the particular circumstances.

Martin McKeague and David Manda at Walker Morris are experts on restrictive covenants [2] and on real estate litigation and dispute resolution generally.  If you have any queries in relation to this article or indeed any real estate ownership, occupation or development dispute, please contact Martin or David, who will be very happy to help.

________________________

[1] [2017] EWHC 1708 (Ch)
[2] See Martin’s earlier article on restrictive covenants and unlocking value in leasehold land.

Contacts