Blumenthal v Church Commissioners for England

Section 84 of the Law of Property Act 1925 gives the Lands Tribunal jurisdiction over restrictions on land use, not positive obligations enforceable in contract. A user covenant may have both positive and negative effects. Its legal character depends on the substance and context of the lease and the parties’ intention when it was granted. The court should not adopt a construction that makes a tenant liable for circumstances outside the tenant’s control where that produces an unreasonable result, unless the lease clearly requires it. Active wording is not conclusive. The covenants were restrictive because they limited use to specified occupations, so the Tribunal had jurisdiction to modify them.

The Church Commissioners appealed from a preliminary decision of the Lands Tribunal, given by His Honour Judge Michael Rich QC. The Tribunal held that it had jurisdiction under section 84 of the Law of Property Act 1925 to consider Alexis Blumenthal’s application to modify user covenants in a long lease of residential premises.

The landlord argued that the covenants imposed positive obligations to keep and use parts of the premises for specified occupations, rather than restrictions on use. The central issue was whether, properly construed in the context of the lease and its surrounding circumstances, the covenants were restrictive covenants within section 84.

The Court of Appeal unanimously dismissed the appeal. Sir William Aldous gave the judgment, with Lord Justice Waller and Lord Justice Carnwath agreeing.

1. Section 84 of the Law of Property Act 1925 confines the Lands Tribunal’s jurisdiction to restrictions arising under covenant as to the use of land. Positive obligations enforceable in contract fall outside that jurisdiction, even where performance also has a negative effect.
2. The character of a user covenant depends on construction in the context of the particular lease and the parties’ intention when the covenant was created. The court must consider substance rather than form. Active wording and isolated expressions are not conclusive.
3. The landlord’s construction would have made the tenant liable for continuing breaches if the Royal Society of Literature ceased occupation or a caretaker was not living in the premises, although those events were outside the tenant’s control. That unreasonable consequence was unlikely to have been intended. If a positive obligation had been intended, the lease would have stated it clearly. This approach was consistent with the principle stated in F.L.Schuler AG v Wickman Machine Tools Sales Limited [1974] AC 235.
4. Read as a whole and in context, the covenants limited the permitted uses of the premises and were restrictive, notwithstanding their active wording and structure. The Lands Tribunal therefore had jurisdiction. The order dismissing the appeal was made.

• Court of Appeal (Civil Division) dismissed the landlord’s appeal and upheld the Tribunal’s jurisdiction.
• Lands Tribunal, sitting on a preliminary issue, held that the user covenants were restrictive covenants within section 84 of the Law of Property Act 1925.