Roland Stafford Flowers v Linstone Chine Management Company Ltd

Permission to appeal may be granted where the proposed grounds disclose a real prospect of success. In an application under section 84(1) of the Law of Property Act 1925, the planning position is a material consideration. An arguable failure to evaluate planning restrictions, and their effect on whether a scheme of restrictive covenants would be undermined, may satisfy the permission threshold. A new argument involving mixed law and fact cannot properly be raised for the first time in the Court of Appeal.

The appellant sought to vary or discharge restrictive covenants affecting a holiday bungalow under section 84(1) of the Law of Property Act 1925. The Upper Tribunal (Lands Chamber) refused the application, principally because success might encourage applications by other bungalow owners and undermine the estate-wide scheme. Permission to appeal was refused on paper by Burnett LJ. On renewal, the appellant argued that the Upper Tribunal had failed properly to assess existing planning restrictions, which made full-time residential use unavailable to most owners. A further ground challenged reliance on a members’ vote, alleging that members had misunderstood the position. The central issues were whether the proposed appeal had a real prospect of success and whether the further ground could be raised for the first time in the Court of Appeal.

The renewed application for permission to appeal was granted in part. Permission was granted on the proposed grounds other than ground 4.

1. The relevant threshold was whether the proposed appeal had a real prospect of success. The uncontested evidence was that there was no realistic prospect of the existing planning restrictions being lifted. The appellants were in the unusual position that the restrictions could not be enforced against them because of their long occupation, while they continued to apply to most other bungalow owners. It was therefore arguable that the management company’s concern that removing the covenant would lead to the estate becoming a full-time housing estate was misplaced.
2. In determining an application under section 84(1) of the Law of Property Act 1925, the Upper Tribunal was required to have regard to the planning position. Although the Tribunal had summarised that position, it appeared to have played no significant part in its actual decision. The submission that the Tribunal had therefore failed properly to evaluate the planning restrictions and their effect on the covenant scheme disclosed a sufficient prospect of success.
3. Permission was refused on ground 4. That ground challenged reliance on the outcome of the management company’s members’ vote, based on an alleged misunderstanding caused by a letter sent before the meeting. It was a new argument of mixed law and fact. There was no reference to it in the Upper Tribunal’s decision or in the appellant’s submissions below, and it could not properly be raised for the first time in the Court of Appeal.

The merits of the proposed appeal were not determined at this stage.

1. Court of Appeal (Civil Division): Burnett LJ refused permission to appeal on the papers. On renewal, Lord Justice David Richards granted permission except on ground 4.
2. Upper Tribunal (Lands Chamber): Mr P R Francis FRICS refused the application to vary or discharge the restrictive covenant.