The Lands Chamber of the Upper Tribunal (formerly the Lands Tribunal) has the power to discharge a covenant on the ground that it is obsolete, pursuant to section 84(1)(a) of the Law of Property Act 1925.
In 1938, a piece of land was sold subject to a covenant that the purchaser could not erect any buildings other than a maternity clinic, and that any building erected could not be used for anything other than a maternity clinic.
A maternity clinic was built and continued to be used as such until 2005, when the clinic closed. After that time, the building remained vacant. The landowner found a purchaser for the site who wished to use it as a church.
The landowner argued that, because of changes in the way that health services are provided, the provision of a maternity clinic at the property was obsolete, and that the covenant should therefore be discharged. It also pointed out that the purpose of the covenant was to provide a maternity clinic for the local area. It argued that that purpose was not achieved, because the covenant did not positively require the property to be used for that purpose – it merely prevented it being used for any other purpose.
The local council, which had the benefit of the covenant, objected to the application. It submitted that the property should be used for the provision of other health services; in particular publicly funded dental care.
The tribunal rejected the landowner's argument that, since there was no positive obligation to run a maternity clinic, the purpose of the covenant had not been achieved. The reality was that the covenant had had the desired effect because the property had been used for that purpose for many years, until 2005 when the need for that use ceased.
However, the tribunal ruled that if the original purpose of a covenant can no longer be served, it is obsolete. The tribunal found that the property was built before the introduction of the NHS, at a time when most babies were delivered at home and there was concern about the level of infant mortality. The question was whether the covenant was capable of being achieved given that the provision of health care to expectant mothers and babies had changed.
The tribunal ruled that the original purpose of the covenant could no longer be served in a meaningful way. By 2005, of the elements of maternity care which had formerly been carried out at the property, the only one which remained was the distribution of baby food, and this was at a very low level. It was clearly not viable to continue. Because the only use specified in the covenant was a maternity clinic, it followed that since that purpose could no longer be achieved, the covenant should be discharged.
Re Abertawe Bro Morgannwg NHS University Trust's application
Things to consider
Although the facts of this case are particular to it, the case is of interest as it demonstrates the wide range of factors which the tribunal may take into account when deciding an application under section 84(1)(a). The most common ground of application under section 84(1)(a) is that the covenant is obsolete because of changes in the character of the property or the neighbourhood. However, section 84 also allows the tribunal to take into account other material circumstances.
This case demonstrates that wider economic and sociological factors may also play their part in determining the outcome of an application.