Derreb Ltd v Blackheath Cator Estate Residents Ltd

Restrictive covenant – Discharge – Modification – Section 84 of Law of Property Act 1925 – Restriction limiting use of land to use for sports ground or erection of detached houses for use as private residences only – Land derelict with no prospect of future use for sports ground – Land zoned for residential development – No prospect of planning permission for development of solely detached houses – Applicant applying for discharge or modification of restrictions – Applicant willing to accept addition of further restrictions under section 84(1C) – Application granted in part The applicant, as freehold owner of a five acre site known as the Huntsman, 106, Manor Way, Blackheath, London SE3, applied to the tribunal, under section 84 of the Law of Property Act 1925, for an order discharging, or alternatively modifying, certain restrictions arising under a 1956 conveyance as to use of the land. The conveyance prohibited the use of the land for any purpose other than as a sports ground or for the erection of detached houses for use as private residences only and required the plans for any such building first to be submitted to the vendor’s surveyor. The applicant sought the order to enable it to proceed with a scheme of development involving a residential development on the land by the construction not solely of detached houses but a mixture of buildings, including semi-detached and terraced houses and flats in apartment blocks. The land had not been used as a sports ground since 1999 and was overgrown and derelict. The land was no longer designated as open space but was zoned for residential development in the local plan and in the supplementary planning document. The applicant contended that there was no prospect either as a matter of planning or market demand that the land would ever again be actively used as a sports ground and that the appropriate use of the land was for residential development, Although the restrictions in the covenant prevented the land being developed for anything other than detached houses, planning policy demanded mixed development of substantial density which could incorporate detached houses but also had to incorporate semi-detached/terraced houses and flats. An impasse had been reached which, unless solved by the tribunal, would result in the land being left in its unused and unkempt state indefinitely or until the local authority made a compulsory purchase order. Held: The application was granted in part. (1) Section 84(1)(a) of the 1925 Act contained various disjunctive elements each of which could lead to a conclusion that the restriction ought to be deemed obsolete. It was necessary to consider changes in the character of the property, the character of the neighbourhood and any other circumstances of the case which the tribunal might deem material. The tribunal had power to discharge or modify any relevant restriction wholly or partially. In the present case, having inspected the land, the tribunal accepted that the site was substantially overgrown and retained no sports facilities. Having regard to its existing state, the relevant planning policies and the lack of any demand for renewed use of the land as a sports ground, there was effectively no prospect that the land would once again be used as a sports ground. In all the circumstances, a restriction to use as a sports ground ought to be deemed obsolete within section 84(1)(a): Re Greaves’ Application (1965) 17 P & CR 57 and Re Forestmere Properties Ltd’s Application (1980) 41 P & CR 390 considered. (2) It was no longer possible to identify any person as being the relevant vendor’s surveyor because the vendor was dead and there were no other owners for the time being of the estate. Therefore, the restriction requiring the built development to be erected in accordance with plans submitted to and approved by the vendor’s surveyor ought to be deemed obsolete within section 84(1)(a). (3) The restriction to detached houses only was not one which was, by reason of changes in the character of the property or the neighbourhood or other circumstances of the case, to be deemed obsolete. If the restriction were discharged, it would be open to a developer to build on the land in a manner which was inconsistent with the neighbouring development on the estate. The purpose of the restriction was to limit development to detached houses only and for there still to be control over what should be built if detached houses only could no longer be achieved. A covenant might still serve a useful purpose even if the purpose originally contemplated could no longer be achieved because the covenant enabled those entitled to the benefit of it to keep control of what was built. They might no longer be able to require that solely detached houses were built, but they might be able to prevent a development prejudicial to them even though, as a matter of planning, such a development might be acceptable: Re Truman, Hanbury Buxton & Co Ltd’s Application [1956] 1 QB 261, Driscoll v Church Commissioners for England [1957] 1 QB 330, (1965) 16 P & CR 89, Re Greaves’ Application (1965) 17 P & CR 57, Re Forestmere Properties Ltd’s Application (1980) 41 P & CR 390 and Re Marcello Developments Ltd’s Application [2002] RVR 146 considered. (4) The applicant’s proposed construction scheme was a reasonable user of the land. The continued existence of the restriction would, unless modified, impede that reasonable user under section 184(1)(aa). (5) On the basis that the applicant accepted a further provision restricting the use of the estate roads, the restriction in impeding the proposed scheme did not secure any practical benefit of substantial value or advantage under section 84(1A)(a) and the objectors would not suffer any loss or disadvantage from the modification of the restriction. (6) In the circumstances, the Upper Tribunal would exercise its discretion and make an order under section 84 discharging the restriction regarding the approval of the vendor’s surveyor under section 84(1)(a) and modifying the restriction regarding the construction solely of detached houses under section 84(1)(aa) so as to allow the proposed scheme to proceed. It was clearly unsatisfactory for the land to remain a derelict and undeveloped site. Planning policy indicated the site should be developed for residential use and all three objectors had ultimately recognised, in the light of concessions made by the applicant, that the proposed scheme should not be prevented. Janet Bignall QC (instructed by Derreb Ltd) appeared for the applicant; Timothy Mould QC (instructed by Blackheath Cator Residents Ltd) appeared for the first objector; the second and third objectors appeared in person. Eileen O’Grady, barrister Read a transcript of Derreb Ltd v Blackheath Cator Estate Residents Ltd here