Restrictive covenant: not discharged but modified

In an application under section 84 of the Law of Property Act 1925, Andrew and Veronica Pethick applied to the Upper Tribunal (Lands Chamber) to discharge a restriction, relying on grounds (a), (aa), and (c) of section 84(1) of the Law of Property Act 1925.

The application in Re Gipsy Lane was in respect of the rear garden of a property in Cornwall. The applicants wished to build a new house on the application land and were prevented from doing so by a restriction in a transfer which limited development to the house already built at number 15.

The beneficiaries of the restriction, admitted by the applicants to be potential objectors to the application, were the owners of 11, 17 and 21 Gipsy Lane; and two properties on New Road. Despite correspondence between the applicant and the various potential objectors, only one objection was submitted to the Tribunal, by Mr and Mrs Bowker of 17 Gipsy Lane, but this was subsequently withdrawn upon them selling their house. All other potential objectors either confirmed their agreement to the application or did not engage with the Tribunal.

The application therefore proceeded unopposed and was considered under the Tribunal’s written representations procedure. In such cases, the Tribunal would usually issue a formal decision without providing reasons; however, in this case, a decision was given because the application was originally opposed and because the Tribunal did not assume that, in the absence of participation, all those entitled to object were necessarily content to lose any benefits conferred by the covenant.

The substance of the case revolved around ground (a) in that the restriction is obsolete, and ground (c) in that its discharge would not cause injury to the beneficiaries of the restriction.

It was decided that the differing ground levels between Gipsy Lane and the New Road frontage to the application land was striking, to the extent that the Tribunal was satisfied that the construction of a house on the application land as proposed would have little effect on the covenant holders.

However, the application was to discharge the covenant and the Tribunal was not wholly convinced that it should be discharged, despite the lack of objections. It said that a higher building might not be acceptable, and that the restriction continued to perform a valuable function in preventing intrusive development which might cause injury to the beneficiaries.

It was decided that, in the absence of any objections to the application to discharge, a limited modification of the covenant could hardly be considered unacceptable to the occupiers of the neighbouring properties. Accordingly, the Tribunal said that the appropriate order was to modify the restriction to allow the construction of a house as proposed under the planning permission.