In this case, the developer Fosse Urban Projects Ltd.’s application to discharge a covenant was refused, after the developer failed to persuade the Upper Tribunal to exercise its discretion. The Tribunal’s decision departs from the authority of Kay v Cunningham and another, where the Upper Tribunal ruled in favour of an application where the applicant was able to demonstrate there was an altruistic aspect to their breach. This could be seen as contrast to the case of Fosse, suggesting that a purely commercial approach, may not always be the best approach, where the Tribunal is concerned.

BACKGROUND

In this case, South Norfolk Council granted planning permission to build a single house on the land in question back in July 2021, subject to a covenant contained in the first schedule of a conveyance dated 19 December 1996 which read as follows:

"not to use the land hereby conveyed other than as garden land in connection with the adjoining property”.

Following this, in October 2022, an application to discharge the covenant was filed by the developer, under section 84(1) of the Law of Property Act 1925 (LPA), which affords the Lands Tribunal power to wholly or partially discharge or modify any restriction on the use of freehold land in certain circumstances.

The jurisdictional basis that developer sought to discharge the covenant as per section 84(1) was as follows:

a) The character of the land had considerably changed from ‘rural’ to ‘urban’,

b) There were no practical benefits of substantial value or advantage to the objectors which would be lost if the restriction was to be discharged,

c) The discharge would not injure the persons entitled to the benefit of the restriction.

The issue of the developer’s conduct arose as, when the hearing to discharge the covenant took place in September 2023, the developer had already built the property on the land, breaching the covenant in question and rendering the hearing retrospective.

DECISION

The Tribunal held that the developer did establish:

a) that the character of the land had changed and thus would render the covenant obsolete;

b) that although the purpose of the covenant (to limit the extent of residential development on the land) was still identifiable, the evidence produced by the objectors/adjacent landowners (Mr and Mrs O'Raw and Dr Helen Bell) namely that the new property diminished the value of their properties and caused a loss of privacy, was insufficient and thus was finding in favour of the developer.

Ultimately however:

c) The developer’s conduct was significant in the failure to persuade the Tribunal to satisfy the second aspect of the legal test under section 84(1) LPA, namely that the developers hasty building of the property on the land before the hearing had even commenced was characterised by the Tribunal as “cynical” and so the tribunal declined to exercise its discretion on the basis of the evidence submitted and the developer's conduct.

FUTURE IMPLICATIONS

Developers must be aware that a hasty approach will not be taken lightly by the Tribunal when making an application under section 84 (1) of the LPA, even where it appears the application will be successful. The developer should make an actual application to discharge the covenant and have that discharge communicated by the Tribunal prior to commencing works.