Upper Tribunal Analyzes Discharge of Restrictive Covenant in Property Law Case

Citation: [2024] UKUT 1 (LC)
Judgment on

Introduction

In the case of Anthony Rogers & Anor v Michael Dinshaw & Ors [2024] UKUT 00001 (LC), the Upper Tribunal (Lands Chamber) grapples with the application of restrictive covenants in the context of property law. The Tribunal analyzes the grounds under which a restrictive covenant may be discharged or modified under section 84 of the Law of Property Act 1925. The decision explores principles including obsolescence, practical benefits, consent, and injury as they relate to modifications of property use restrictions.

Key Facts

The applicants, Anthony and Patricia Rogers, seek the discharge of a restrictive covenant that prevents the construction of extensions to their property without prior consent. The covenant, dating from 1980, is breached by the Rogers when they construct two extensions in 2018 without such approval. The objectors, descendants of the original covenantors, oppose the discharge, invoking the covenant’s protective benefits for the character and environment of their land.

An inspection of the property and thorough consideration of the case’s factual matrix informs the decision. The applicants argue the covenant is now obsolete, impedes reasonable use of the property, was acquiesced to by non-objection from one of the original covenantees, and discharging the covenant would not injure the objectors. The objectors claim significant benefits from the covenant and urge maintenance of the status quo.

Obsolescence (s.84(1)(a))

The principle of obsolescence requires consideration of changes in the character of the property or the neighborhood, which may render a restriction outdated. The Tribunal finds the covenant is not entirely obsolete as it retains utility for those other than the objectors, such as preventing unapproved development that might not require planning permission.

Practical Benefits (s.84(1)(aa))

To modify or discharge under this ground, a covenant must not provide ‘practical benefits of substantial value or advantage’. The Tribunal concludes that the potential to prevent retention of the extensions does not offer any practical benefits to the objectors, and any future development that might impact them is deemed unlikely.

This principle requires all those entitled to the benefit of the restriction to have agreed to the modification, either expressly or impliedly. Although there are assertions that the original covenantor approved the extensions, the lack of formal consent from all benefitted parties ultimately leads the Tribunal to find this ground unmet.

Injury (s.84(1)(c))

The ground of injury examines whether the proposed modification or discharge will cause harm to those entitled to the benefit of the restriction. The Tribunal determines that there is no injury, as the objectors’ land has not depreciated in value, and their concerns about other plots are unfounded.

In related precedents, P&A Swift Investments v Combined English Stores Group Plc discusses the enforcement of covenants that ‘touch and concern’ land. Mahon v Sims addresses whether consent may be unreasonably withheld and establishes that refusal of approval is unreasonable only if no reasonable covenantee would refuse it.

Outcomes

The Tribunal grants a modification (not a discharge) of the covenant enabling the retention of the two constructed extensions. It does not support a claim for compensation and dismisses concerns of establishing a harmful precedent.

Conclusion

The Tribunal’s decision underscores a measured approach in handling restrictive covenants, acknowledging their purpose and potential obsolescence while balancing them against current beneficial use of property. Upholding the covenant in a modified form retains protection for the community without unnecessarily impeding the applicants’ use of their property. The case exemplifies an application of nuanced legal doctrine, adjudicating between parties’ competing interests within the framework of property law.

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