In a recent case, the Upper Tribunal decided that land benefitting from a restrictive covenant was greater than the land which had the legal benefit. An application to release the covenant was, accordingly, refused.

Facts

In Re Copleston’s Application [2021] UKUT 0018 (LC) the Upper Tribunal (Lands Chamber) considered an application made by a property owner for the variation or release of a restrictive covenant under section 84(1) of the Law of Property Act 1925 (“LPA 1925”).

The applicant obtained planning permission to erect an additional house within the garden of its existing property, but construction of the new house would be in breach of a 1960 restrictive covenant which limited any future construction within the garden to that of “a shed, summerhouse, conservatory, greenhouse or private garage” and, therefore, the applicant sought its release.

A neighbour objected to the removal of the covenant primarily on the ground that construction of the new house would be detrimental to the privacy and enjoyment of their own house. On initial review it appeared as though the neighbour’s ability to object was weakened due to the fact that only the garden of its property actually benefitted from the 1960 covenant whilst their house did not!

The tribunal had to decide whether adjoining land could be taken into consideration where the objecting party owned that land as well as the land with the benefit of the restrictive covenant.

Decision

In order for an applicant to succeed under section 84(1A) of the LPA 1925, the Upper Tribunal had to be satisfied that the covenant did not provide any practical benefits of substantial value or advantage to the beneficiary or that the covenant was contrary to the public interest. In either case, money must be an adequate compensation for the loss or disadvantage (if any) which such person will suffer from the discharge or modification.

The court remarked there was nothing in section 84(1A)(a) limiting the land that can be taken into account for these purposes and, as the neighbours had acquired their land as a single property, the judge thought it appropriate to consider the effects on their property as a whole; the enjoyment of it was not meaningfully divisible into ‘benefitted’ and ‘non-benefitted’ parts. The judge said that different considerations might apply where land had been accumulated over time, and some of it benefitted and some did not.

As a result, it was permissible for the tribunal to consider the effect that relaxing the covenant would have on the whole of the land owned by the neighbours, notwithstanding that only part of their land had the legal benefit of the covenant. In this case the covenant secured a practical benefit to the land and so the application to modify/release the covenant was dismissed.

Conclusion

This case highlights the need for developers to be mindful that where an objection is made to an application under section 84(1) of the LPA 1925, courts are able to construe the beneficiaries’ interests widely. This results in there being a more stringent test to overcome for the release or variation of a restrictive covenant.