Re Thames Valley Holdings Ltd (2011)
The Upper Tribunal (Lands Chamber) determined that a freeholder's application for the modification of restrictive covenants which impeded its proposed housing development should not be struck out as an abuse of process. Although similar applications had been refused in previous years, the freeholder had a realistic prospect of showing that the circumstances had changed to an extent that might lead the tribunal to reach a different decision.
The Upper Tribunal was required to determine, as a preliminary issue, whether it should strike out an application made under the Law of Property Act 1925 s.84(1) by the applicant freeholder (T). T's land was situated near a Grade I listed building. The building was privately owned, but the National Trust had the benefit of restrictive covenants which prevented development of the surrounding land without its consent. T applied under s.84(1)(aa) and (c) for modification of the restrictions to enable housing development to be carried out on its land. Section 84(1) applications had been made on two previous occasions for the same purpose, but each had been refused. In light of those refusals, the trust sought to have the instant application struck out as an abuse of process. Alternatively, and relying on Martin's Application, Re (1989) 57 P & CR 119 CA (Civ Div), it sought to have ground (aa) struck out from the application on the basis that T could not show that money would be an adequate compensation for the loss or disadvantage that the trust would suffer from the modification. T submitted that circumstances material to each of the grounds now relied upon had changed since the earlier applications. It further argued that a reasonable sum of money could be awarded to the trust in compensation for any loss which it could then use towards its general expenses of protecting and promoting the United Kingdom's heritage in other localities or in other ways.
(1) Under the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 r.8(3)(c) it would generally be appropriate to strike out a s.84 application where an earlier application had been determined by the tribunal on the same grounds and there was no realistic prospect of showing that circumstances had changed to an extent that might lead the tribunal to reach a different decision. In the instant case, however, it could not be said that T had no realistic prospect of showing that circumstances had changed in that way. Ground (aa) of T's application was that the restriction impeded development that would constitute a reasonable user of the land and in doing so would be contrary to the public interest. The public interest case was based on planning need, and it was the nature of the assessment of planning need that it changed over time. It was entirely plausible that the need for housing land in the locality had changed during the period between the earlier decisions and the instant application. Inevitably, the land itself would have changed and planning policy was also different. Moreover, T's proposal was for a scheme producing many more houses, some of which would be affordable housing, the need for which had not been under consideration at the time of the earlier decisions. The parties' planning experts would of course differ as to the implications of present planning policy and on the current need to release the land for development and consequently on whether it would be contrary to the public interest to prevent its development, but those were matters that could not be said to have been decided previously. In relation to ground (c), although it would be unlikely that T would be able to establish that the modification sought would cause no injury at all, it would not be appropriate to strike out that ground given that it would not be appropriate to strike out ground (aa) (see paras 20-22 of judgment). (2) The question whether in any particular case money would be adequate compensation was a question of fact. The passage in Martin's Application where Fox L.J. stated that when the interest sought to be protected by the covenant was the interest of a body in its capacity as custodian of the public interest, money could not be adequate compensation for the modification of the restriction, did not form part of the ratio of the decision. It was, however, a significant dictum. The point was obvious: if the purpose of the restriction was to protect the public interest, and if the benefit of the restriction to the covenantee body lay solely in its ability to enforce the restriction, the mere payment of money to the covenantee would do nothing to alleviate the loss of the benefit. The public interest, the sole concern of the covenantee, would have suffered, and the mere payment of money to the covenantee would not make up for that. It was not known how far T would want to go in seeking to establish how the trust might apply any money awarded in its favour in order to show that the public interest that was of concern to the trust would derive a commensurate benefit to set against the loss or disadvantage caused by the modification. However, the contention was properly arguable and T ought not to be debarred from advancing it, Martin's Application considered (paras 34-37).
Preliminary issue determined
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16 Aug 2011
Upper Tribunal (Lands Chamber)
George Bartlett QC (President L Tr)
LTL 30/8/2011 :  UKUT 325 (LC)
John McGhee QC