Beeches Capital v Hunt and others

Restrictive covenant – Discharge or modification – Applicant obtaining planning consent for demolition of redundant agricultural buildings and erection of modern office unit – Restriction preventing erection of buildings other than those designed and to be used for agricultural purposes – Applicant applying for discharge or modification of restriction – Whether restriction deemed obsolete – Whether restriction securing practical benefit to objectors – Application granted The applicant was a private unlimited company which primarily acted as an investment vehicle for the Dean family and owned the freehold of Beeches Farm, which was situated on the outskirts of Tring on the north side of the B488 Icknield Way, which formed the north western boundary of the town. The application land had been sold away from the surrounding land by a conveyance dated 4 November 1959. The applicant obtained planning permission to demolish former agricultural buildings and redevelop the application land as a rural business and enterprise hub. It applied under section 84(1)(a), (aa) and (c) of the Law of Property Act 1925 for the tribunal to discharge or modify a restriction, imposed by the 1959 conveyance. The restriction prevented the erection of buildings other than those designed for and to be used for agricultural purposes. The original objector to the application owned adjoining land with the benefit of the restriction. After she died, her objection was continued by her personal representatives. The objectors argued that the redevelopment scheme would not be a reasonable use of land in an agricultural area within a natural landscape. It would be visually intrusive, create light pollution and lead to intensification of business use. Held: The application was granted. (1) Section 84(1)(a) was satisfied where it was shown that, by reason of changes in the character of the property or neighbourhood, or other circumstances of the case the tribunal might deem material, the restriction ought to be deemed obsolete. In determining whether ground (a) was satisfied, it was necessary to: (i) identify the purpose or object of the covenant; (ii) determine whether the character of the property or the neighbourhood had changed since the covenant was imposed; (iii) determine whether the restriction had become obsolete by reason of those changes, in that the object for which the restriction was imposed could no longer be achieved; and (iv) determine whether some material circumstance other than a change in the character of the property or the neighbourhood had had that effect: Re Fermyn Wood [2018] UKUT 411 (LC); [2019] PLSCS 10 considered. From its inspection of the property and on the evidence, the restriction was not obsolete. The character of the buildings would not change from that envisaged by the restriction. Whilst their use might no longer be agricultural, their appearance was, and the purpose of the restriction was to control appearance, not use. The conversion scheme was unobjectionable and would not breach the restriction which continued to achieve its purpose in protecting the adjoining and neighbouring land. No other material circumstances had been put forward. (2) By section 84(1A), in a case where condition (aa) was relied upon, the tribunal might discharge or modify the restriction if it was satisfied that, in impeding the suggested use, the restriction either secured “no practical benefits of substantial value or advantage” to the person with the benefit of the restriction, or that it was contrary to the public interest. The tribunal also had to be satisfied that money would provide adequate compensation for the loss or disadvantage (if any) which that person would suffer from the discharge or modification. In determining whether the requirements of section 84(1A) were satisfied, the tribunal was required by section 84(1B) to take into account “the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas, as well as the period at which and context in which the restriction was created or imposed and any other material circumstances”. The objectors accepted that the redevelopment scheme, which had been through the scrutiny of the planning system, was a reasonable use of the application land. It was accepted by the applicant that that use was impeded by the restriction. (3) It would not be appropriate to discharge the restriction. However, modification to permit a carefully specified scheme with 17 conditions attached was a measured step which neither precluded, nor set a precedent for, any future applications on this land or other parcels of land at Beeches Farm which were subject to the restriction. When the restriction was imposed 65 years ago the context of planning policy was very different. In the report recommending that planning permission be granted for the redevelopment scheme the delegated officer explained that redevelopment of a previously developed site was acceptable within the national and local policy framework, subject to conditions. Therefore, the pattern for granting planning permission had been established and the tribunal had not been made aware of other material circumstances. (4) It was possible to assess compensation for a loss of amenity even if the loss of that amenity might not be recognised by a diminution in market value. If the protection afforded by the restriction was of substantial value or advantage, ground (aa) would not be made out. If the protection was not of substantial value or advantage it would be necessary to determine whether its loss would be capable of being adequately compensated for by a payment of money. The tribunal had to form its own view as to whether the loss of amenity was capable of being compensated in money and, if so, what sum would be adequate compensation. In all the circumstances, a sum of £15,000 would be adequate compensation for the loss of amenity the objectors would suffer until tree planting reached maturity. That allowed a little over £2,000 per acre for a marginal loss of amenity to them in their enjoyment of the 7.25 acre field. It would enable them to undertake further tree planting in mitigation of the loss of amenity if they wished. (5) Therefore, the tribunal was satisfied that it had jurisdiction to modify the restriction under ground (aa), to permit the redevelopment scheme, because the restriction did not secure to the objectors any practical benefits of substantial advantage, and it could award a sum in compensation for the marginal loss of amenity they would suffer from the modification.  If followed that ground (c) was not made out because the proposed modification would injure the objectors. Brooke Lyne (instructed by Gardner Leader LLP of Newbury) appeared for the applicant; Richard Power (instructed by Allan Janes LLP of High Wycombe) appeared for the objectors. Eileen O’Grady, barrister Click here to read a transcript of Beeches Capital v Hunt and others