Legal Principles and Key Points
- In the case of Elliston v Reacher 1908 2 Ch 374 it was found that there are 4 necessary concomitants for valid building schemes.
Facts of the Case
- A building society acquired part of an estate in 1869.
- In the same year, part of the estate was plotted out for sale in numbered lots which were shown on a sale plan of the society, on which were printed the conditions on which it was proposed to sell the estate.
- The conditions were as contained in the engrossment however they did not state with whom the restrictive covenant contained in the proposed deed were to be entered, but the plan was identical with the plan annexed to the engrossment.
- The society did not complete its title to the property until January of 1861 when the estate was vested in R. and C who were trustees for the society.
- After the engrossment was prepared with the date January 16th, 1861, with an indenture between the persons whose names and seals were stated to be but were not subscribed in the second schedule with R. and C.
- Each party was to covenant with the other of them and separately with R. and C. to observe the restrictions in the first schedule to the engrossment.
- The plan annexed shewed the F. estates part of which was plotted out for sale in numbered lots and the rest marked as reserved.
- One restriction was that on no lot should any hotel, tavern, public house, or beer house be built, or any house used as such without the vendors consent.
- R. and C by deed, conveyed two of the numbered lots of predecessors in title of the defendants, subject to the covenant of the grantee thereinafter contained to observe the restrictions contained in an indenture of January 16th, 1861.
- By deeds executed in December 1861, contained identical covenants, other numbered lots were conveyed by R. and C. to predecessors in title of the claimants.
- All four conveyances were identical.
- Some defendants were owners of the lots and the others, lessee, used the buildings on the lots as a hotel.
- C. in 1880 was party to conveying part of the land on which the hotel stood to a predecessor in title of the claimants other than E., which predecessor entered restrictive covenants which did not extend to a hotel.
Issues in Elliston v Reacher 1908 2 Ch 374
- The issues in this case relate to whether the claimant could restrict the building and use of a hotel on the property.
- Whether the covenant had passed in law with the land through the different owners of the property.
Held by High Court (Chancery Division)
- Held that both parties could rely on the benefit of the covenant and that the claimant could rely on an injunction to prevent the building and use of a hotel on the property.
- Parker asses that there were four necessary concomitants of a building society:
- The owners derived title under a common vendor.
- The vendor laid out a defined portion of land in its lots for sale subject to restrictions intended to be imposed on all the lots which are to be consistent with the general scheme of development.
- mutual restrictions which are indented by the vendor to be for the mutual benefit of all the plots to be sold
- the benefit of the restrictions is to be known to the purchaser.