UK: Discharge Under Law Of Property Act 1925

Case name and reference

Re Morningside (Leicester) Ltd [2014] UKUT 0070 (LC)

Summary

The applicant sought to discharge certain restrictive covenants on the basis of grounds (a) and (c) of the Law of Property Act 1925. Since the property had been used in breach of one of the restrictions – prohibiting use of the property other than as a private dwelling house - for a prolonged period, the Tribunal discharged this element of the restriction since it no longer served its original purpose. However, the restrictions as to building lines would remain in place since these had not been breached and, in view of the lack of information concerning the applicant's plans for the land, it could not be said that the discharge of the covenant would not injure the persons entitled to its benefit.

Facts

The applicant's freehold property was subject to restrictive covenants contained in conveyances made in 1864 and 1881. The 1864 covenants included a restriction on building within 50 feet from certain boundaries and stated that "no buildings except private Dwellinghouses with the necessary outbuildings thereto should be erected" on the land. The 1881 covenant was more limited and simply restricted buildings beyond a certain line close to the boundaries.

The existing building on the application land was a three storey end of terrace building, apparently reconstructed as a house in the late 19th century. The property also contained a two storey element and a more modern single-storey extension and some car parking spaces. The property had been used for many years as a doctor's surgery in breach of the 1864 covenant (although with planning permission), although this use had ceased at around the date of the application in July 2012 and the property was vacant.

Issues

The Tribunal was required to determine whether the applicant satisfied grounds (a) and/or (c), as follows:

1. Ground (a): "that by reason of changes in the character of the property or the neighbourhood or other circumstances of the case which the, Tribunal may deem material, the restriction ought to be deemed obsolete"

2. Ground (c): "that the proposed discharge modification will not injure persons entitled to the benefit of the restriction"

Decision

In relation to ground (a), the Tribunal noted that a covenant becomes obsolete when its original purpose can no longer be served. The Tribunal noted that the intended purpose of the 1864 covenant was stated to be that no buildings except private dwelling houses (with necessary outbuildings) should be erected. The Tribunal accepted that the character of the main adjoining road had changed since the covenants were made, since it now comprised a wide range of commercial and retail uses and former houses had been converted into flats. However, it found that there was still a relevant area containing properties which were predominantly residential. The Tribunal therefore rejected the applicant's assertion that dwelling houses "would and do look out of place and character" in the area.

The Tribunal noted that the land appeared to have been used as a doctor's surgery for a prolonged period, with those enjoying the benefit of the 1864 covenant having acquiesced to the open and obvious breach for a long time. The Tribunal therefore considered that the 1864 covenant no longer served its original purpose in terms of the use of the application land as a private dwelling house and it found that part of the covenant to be obsolete. However, the Tribunal noted that the restriction in the 1864 conveyance against building within a certain area of the street frontage had not been breached. Since there remained a clear building line, the Tribunal allowed this part of the restriction to remain and only partly discharged the 1864 covenant.

The Tribunal noted that the building line set by the 1881 covenant also did not appear to have been breached. It therefore considered that the covenant continued to serve its original purpose and did not consider that it should be deemed obsolete under ground (a).

In relation to ground (c), the Tribunal noted that it had received very limited information from the applicant as to its proposals for the application land and how these might affect the existing building/building line. (During the hearing, the applicant said that he intended to open a pharmacy, but no details were provided to support this or to explain how the existing building on the land would be affected by the applicant's plans and there was no planning permission for such a use.) Accordingly, the Tribunal held that it could not be said that the proposed discharge of the covenant would not injure the persons entitled to the benefit of the remaining part of the 1864 covenant and the 1881 restriction. It was therefore not satisfied that ground (c) had been established.

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