Lord Stubborn and Baroness Whinge were non parties to the original compact in the conveyance between Annemarie and Michael. Consequently, Lord Stubborn ‘s legal place vis- & A ; agrave ; -vis Baroness Whinge will depend on the nature of the compacts and whether the conditions required by jurisprudence and equity for compacts going attached to and running with the land have been satisfied in order to be enforceable against Lord Stubborn.
The enforceability of compacts against replacements will ab initio depend on the nature of the compact. The original compact between Annemarie and Michael included both positive and negative duties and in the instance of Haywood v Brunswick Permanent Benefit BS it was determined that merely negative compacts could be enforced against a replacement. Furthermore, in the instance of London & A ; South Western Railway, Jessell MR affirmed this rule on the evidences that “ the philosophy of [ Tulk V Moxhay ] , justly considered appears to be either an extension in equity of the philosophy in Spencer ‘s Case to another line of instances, or else, an extension of the philosophy of negative easements. ”
Furthermore, the House of Lords affirmed old instance jurisprudence separating between the enforceability of positive and negative compacts in the instance of Rhone V Stephens, asseverating that where a restrictive compact imposed both positive and negative duties, the restrictive component would be enforceable distinct from the positive duty.
If we apply this by analogy to Lord Stubborn ‘s place, whilst phrased in positive footings, the duty to keep the boundary inherently involves incurring outgo and as such, will indicate towards being a negative duty and as such, potentially enforceable against Lord Stubborn. Furthermore, the prohibition on maintaining hogs and usage of the belongings for any profession or concern will potentially impact Lord Stubborn ‘s legal place sing usage of the Property.
In order for the compact to be enforceable against Lord Stubborn as a replacement to the original covenantee, it will be necessary to set up whether the benefit and the load of the compacts have passed to Baroness Whinge and Lord Stubborn severally. The common jurisprudence prescribes the undermentioned four conditions for finding whether the benefit of a covenant “ runs-with or becomes attached to the land ” :
- The original covenantee had rubric to the legal estate at the clip the compacts were created ;
- The party seeking to implement the compact has legal rubric to the land ;
- The compacts must touch and concern the dominant land ; and
- At the clip the compacts were entered into, there must hold been a clear purpose that the benefit of the compact was to run with the land.
If we consider these rules in context of the current factual scenario, Annemarie had legal rubric to the Property at the clip of the conveyance of the belongings ( the Property ) to Michael incorporating the compacts. Furthermore, the sale of the Property to Baroness Whinge transferred the legal rubric to her the Property, thereby fulfilling the 2nd demand.
With respect to the 3rd demand that the compacts must “ touch and concern ” the dominant tenement, this is finally a inquiry of fact with no difficult and fast regulations. This is evidenced by the instance of Martin V Flight Refuelling Limited where it was stated that that the tribunals will by and large postpone to the averments of a covenantee that the land is benefited without farther probe if the sentiment is non unreasonably held.
If we consider the nature of the compacts, the benefit to the Property is arguably derived from the limitations on maintaining hogs and running a trade or profession in cut downing nuisance and pollution, which is further bolstered by the duty to keep the boundary fencing, which besides protects against trespass. As such, if Baroness Whinge argues that the compacts benefit the Property, the 3rd demand will most probably be satisfied.
With respect to the 4th demand, it has been commented that the purpose component is normally satisfied if the diction of the compact refers to “ replacements in rubric and assigns ” . We are non cognizant of the exact diction of the compacts in the original conveyance between Michael and Annemarie, nevertheless the given in favor of such purpose is provided by Section 78 of the Law of Property Act 1925 ( LPA ) . Section 78 implies the needed purpose that the benefit of the compact was intended to go through if such diction is excluded in the original conveyance ( capable to univocal grounds to the contrary ) . Consequently, capable to any express grounds to the contrary, there will be an implied given that the compact in the original conveyance was intended to go through.
Notwithstanding the conformity with these conditions at jurisprudence, the determination in the instance of Austerberry v Corporation of Oldham created a differentiation between enforceability of compacts at common jurisprudence and in equity. In this instance, it was determined that the load of a restrictive compact will non run with the land in common jurisprudence. As such, whilst the fortunes clearly point towards the benefit of the compact being attached to the Property, Lord Stubborn will merely be bound by the load of the compact under the regulations of equity, which I shall now see.
Equity prescribes two regulations for enforceability of restrictive compacts. Under the first regulation, Baroness Whinge could implement any breach of the compacts by Lord Stubborn straight against Michael under the “ concatenation of insurance ” regulation set out in the Austerberry instance. This rule entitles a replacement to the original covenantee to action the original covenantor irrespective of whether the breach of compact is in fact caused by a replacement covenator. If we apply this to the current scenario, in the event that Baroness Whinge sued Michael, Lord Stubborn would so be potentially apt to indemnify Michael under the concatenation of insurance rule for any compensation Michael had to pay to Baroness Whinge as a direct consequence of Lord Stubborn ‘s breach.
Under the 2nd demand, the philosophy established in Halsall V Brizell would entitle Baroness Whinge to implement the compact on the footing that rights granted in a conveyance are capable to the axiom that “ he who takes the benefit besides takes the load ” .
In this regard, equity sets out four pre-conditions to set up the running of the benefit of a compact. The first three pre-requisites are the same as for the common jurisprudence. The 4th demand specifies three methods of transportation in order for the benefit of a restrictive compact to run as follows:
- Assignment ;
- Annexation ; or
- Constructing Scheme.
Furthermore, the instance of Miles v Easter set out five conditions for finding the cogency of an just assignment:
- the compact must be for the benefit of the covenantee ;
- the land must place and discoverable with certainty ;
- the dominant land must be owned by the complainant ;
- the dominant land must be capable of profiting from the compact ; and
- the assignment of the compact and conveyance must both be contemporary.
In the current scenario we are non cognizant of the existent diction of the conveyance, nevertheless in the absence of any grounds to the contrary, this analysis will go on on the given that the Miles v Easter conditions have been satisfied.
With respect to designation, in the instance of Newton Abbot Co-operative Society Ltd v Williamson & A ; Treadgold Ltd, it was held that if the benefited land could be identified with sufficient certainty from mention to extrinsic grounds, so the assignment could be held to hold passed the benefit of the compact to a replacement. Applied to Lord Stubborn ‘s place, the contemporary nature of the transportation and the compacts included in the conveyance will indicate to the benefit of the compact passing to Baroness Whinge.
With respect to appropriation on the other manus, this operates to “ associate ” the compact to the dominant land. This was evidenced in the instance of Rogers v Hosegood, via the tribunal ‘s reading of the compact ‘s phrasing, which it was asserted must expose a clear purpose that the benefit of the compact was intended to go through. Furthermore, subdivision 78 ( 1 ) of the LPA enables statutory appropriation of a compact and Smith remarks that the application of subdivision 78 in visible radiation of the determination in Federated Homes instance operates to make automatic appropriation. However, it is likely that the original conveyance would chiefly be relied upon in the current scenario to show that the benefit of the compact has passed.
The taking instance of Tulk V Moxhay established five conditions which must fulfill in order for the load of the compacts to run in equity ; viz. :
- The compact itself must be negative ;
- There must be an identifiable piece of “ dominant ” land ;
- The compact must touch and concern the dominant land ;
- There must hold been purpose that the benefit was to run with the land ;
- The load of the restrictive compact will non run unless registered.
If we apply this by analogy to the current scenario, the first three demands are satisfied and Section 79 of the LPA will connote the 4th demand topic to show purpose to the reverse. However, as the Property is unregistered, the compact should hold been registered as a Class D ( two ) land charge in order to be enforceable against Lord Stubborn.
In drumhead, the factual scenario clearly points to a decision that the benefit and load of the compacts created in the original conveyance have run with the land to be enforceable against Lord Stubborn by Baroness Whinge in equity. Furthermore, Lord Stubborn could potentially be apt to indemnify Michael under the concatenation of insurance rule if Baroness Whinge brings a claim against Michael as original covenantor. However, Lord Stubborn will non be apt for breach of the compacts if the compact was non registered as a Class D ( two ) land charge.
Legal observers have observed the legal uncertainness that has been perpetuated by ad hoc determinations sing instances of undue influence in the context of mortgages, which have arguably placed mortgage holders in an equivocal place sing their rights and duties. This is farther evidenced by the two chief methods relied on to dispute mortgage cogency. The first method discussed by Smith is the premiss that a mortgage holder owes a direct responsibility of attention towards a mortgager. However, as Smith remarks, this averment has rarely been upheld and Lord Denning’s proposition of a rule of “ inequality of dickering power ” in such instances was rebuffed by the House of Lords in National Westminster Bank plc 5 Morgan.
Furthermore, the House of Lords farther rejected any impression of a “ particular equity theory ” as propounded by Lord Denning. This is arguably necessary in continuing certainty in applications and avoiding floodgate claims disputing mortgage cogency on evidences of unequal bargaining power, which per se operates in the mortgager ‘s favor. Indeed in the instance of Cornish v Midland Bank plc, it was stated that the cogency of a mortgage could non be undermined notwithstanding the gross carelessness of a mortgage adviser ( who would however be personally apt in amendss to a claimant ) .
However, instances affecting undue influence are a different animate being and as such, it has been necessary to develop some legal protectionist mechanisms in the mortgage context. As such, the 2nd most common method of assailing the cogency of a mortgage is through using a given that a mortgage holder is in some manner complicit in the undue influence of a mortgager. If this given can be satisfied in the affirmatory, the mortgage itself will be declared invalid.
For illustration, Lindley J presiding in the instance of Allcard V Skinner stated that the philosophy of undue influence was rooted in the premiss that “ it is right and expedient to salvage ( individuals ) from being victimised by other people. ” However, this averment has been criticised for making ambiguity due to the fact that finding undue influence is per se a inquiry of fact determined by the specific fortunes of every single instance. Whilst necessary to guarantee equality of weaponries before the jurisprudence, this creates uncertainness as to the exact parametric quantities of the pertinence of undue influence. Indeed it has been commented that “ there is exactly no defined jurisprudence puting bounds to the just legal power of……..undue influence. ”
In the instance of Bank of Credit & A ; Commercial International SA V Aboody, the Court of Appeal set out the following two separate classs of undue influence:
- Actual undue influence ; and
- Presumed undue influence.
Presumed undue influence farther screens two distinguishable headers ; viz. , given of undue influence by virtuousness of certain relationships between complainant and suspect and secondly, that the relationships between the parties demonstrated by the facts of the instance clearly point towards a given of undue influence.
With respect to the first class, the types of relationship where presumed undue influence will run affect the operation of trust and assurance, which is by and large of a fiducial nature and will non include familial relationships such as that of hubby and married woman. This is evidenced in the instance of Lloyds Bank Limited V Bundy, where the suspect and complainant were banker and client severally, and as such, the tribunals found in favor of presumed undue influence in visible radiation of the complainant ‘s trust on the suspect as a regular client for many old ages.
The 2nd class of presumed undue influence requires the complainant to show that the nature of the relationship with the suspect and the facts of the instance affect trust whereby undue influence can be presumed. This caput of presumed undue influence has been most troublesome for mortgage holders, which is evidenced by the Bundy instance. In this determination, Lord Hoffman commented that the relevant consideration was whether the complainant “ had surrendered relevant determination making…… and there exists a trust and assurance, which leads one party to trust entirely on the other party ” .
Ultimately, the load of cogent evidence under this class lies with the complainant, nevertheless the range of relationships covered is really broad as evidenced by the determination in Aboody which held that presumed undue influence could be between hubby and married woman.
However, the potentially wide scope of relationships covered by presumed undue influence has been compounded by the issue as to whether the dealing itself must besides be “ obviously disadvantageous ” as was suggested by the House of Lords in the instance of National Westminster Bank plc 5 Morgan. This issue has continued to exert the tribunals and in the instance of CIBC Mortgages plc V Pitt the House of Lords obfuscated the affair by saying that this demand was non applicable to existent undue influence, but failed to clear up the boundaries of its application to assume undue influence.
The issue of “ manifest disadvantage ” was once more considered in the instance of Barclays Bank plc V Coleman where Nourse LJ questioned its relevancy in instances of presumed undue influence. Nourse LJ ‘s remarks were farther welcome in naming for the House of Lords to clear up the parametric quantities of the manifest disadvantage demand and in any event non to widen its application.
Indeed, the House of Lords reconsidered the demand in the instance of Bank of Scotland v Etridge, assailing the manifest disadvantage demand. Furthermore, the House of Lords asserted that one time the facts of the instance pointed to a relationship of trust and assurance, coupled with trust on this trust, it was non necessary to show a manifest disadvantage, and to make so would ensue in reversal of cogent evidence incorporated through the back door.
The House of Lords determination was clearly welcome in clear uping the place which in bend facilitates legal certainty. Furthermore, the manifest disadvantage demand would efficaciously ensue in a given in favor of mortgage holder runing against the just aim of undue influence as a protection mechanism. However, conversely, the mortgage holder is arguably placed in a hard place further compounded by the determination in Barclays Bank v O’Brien asseverating the rule of constructive notice in such instances.
The Barclays determination farther implemented a given of undue influence where there is a matrimonial relationship, foregrounding the trouble of efficaciously turn toing conflicting involvements in such instances. As such, the best pattern that mortgage holder ‘s must follow systematically to guarantee maximal protection of its involvements in instances affecting possible undue influence is to interview parties to a mortgage application individually, explicating the hazards involved and promote both parties to seek independent legal advice.