Covenant in UK Law

For myself, I reject the narrowest interpretation of section 78, the supposed orthodox view, which seems to me to fly in the face of the wording of the section. Before I express my reasons I will say that I do not find it necessary to choose between the second and the third views because, in my opinion, this covenant relates to land of the covenantee on either interpretation of section 78.

In otherwords, if the condition precedent of section 78 is satisfied - that is to say, there exists a covenant which touches and concerns the land of the covenantee - that covenant runs with the land for the benefit of his successors in title, persons deriving title under him or them and other owners and occupiers.

The reason is because it is so difficult to draw the line between information which is confidential and information which is not: and it is very difficult to prove a breach when the information is of such a character that a servant can carry it away in his head. The difficulties are such that the only practicable solution is to take a covenant from the servant by which he is not to go to work for a rival in trade.

The basis of it is that the landlord, by letting the premises, confers on the tenant the right of possession during the term and impliedly promises not to interfere with the tenant's exercise and use of the right of possession during the term. I think the word "enjoy" used in this connection is a translation of the Latin word "fruor" and refers to the exercise and use of the right and having the full benefit of it, rather than to deriving pleasure from it.

The main intention of section 62 was to provide a form of statutory shorthand rendering it unnecessary to include such words expressly in every conveyance. It is a matter of debate whether, in the context of the section, the words "rights…appertaining to the land" include rights arising under covenant as opposed to strict property rights. However, I will assume, without deciding, that rights under covenant are within the words of the section.

It appears that the judge's reference to a legal assignment was brought about by the citation to him in argument of the decision of this court in Shaw v. Applegate [1977] 1 WLR 970, where, at p 979H, Goff LJ, relying on the judgment of Farwell J. in Osborne v. Bradley [1903] 2 Ch 446, 451, expressed the view that it is easier to establish a case of acquiesence where the right is equitable only.

However, that view was rejected in Jaggard v. Sawyer by both Sir Thomas Bingham MR and Millett LJ who, agreeing with Megarry VC in Tito v. Waddell (No. 2) [1977] Ch 106, 335, thought that Brightman J's approach had been compensatory, in that the damages awarded were intended to compensate the plaintiffs for not having obtained the price they would have been able to obtain for giving their consent, had they been asked to give it.