Stafford Flowers v Linstone Chine Management Company Ltd

In an application to discharge a restrictive covenant, the practical benefit of substantial value or advantage may include preserving the integrity, character and use of a wider building scheme. The tribunal may consider whether a seemingly minor discharge could encourage later applications, alter the context of future decisions, affect the market, or increase enforcement and infrastructure burdens. Each application remains fact-sensitive. One discharge does not bind the tribunal in later cases, although it may change the practical context. The thin-end-of-the-wedge issue is evaluative and principally one of fact. Appellate intervention is limited where a specialist tribunal has addressed it rationally. A planning certificate or weak planning enforcement does not eliminate the covenant’s independent practical benefit.

The appellant owned a freehold bungalow on a holiday estate subject to a restrictive covenant, reflecting a planning condition, which prohibited occupation during specified winter periods. After obtaining a Certificate of Existing Lawful Use under the Town and Country Planning Act 1990, he applied under section 84 of the Law of Property Act 1925 to discharge the covenant. By consent, the restriction was modified to prohibit only overnight occupation during those periods.

The Upper Tribunal dismissed the application, holding that the restriction preserved the estate’s character and secured a practical benefit of substantial value because discharge could become the thin end of the wedge. The appeal challenged the Tribunal’s treatment of the planning position, its assessment of future applications and the sufficiency of its reasoning.

The Court of Appeal, in the judgment of Lady Justice Arden with which Lord Justice Sales agreed, dismissed the appeal.

1. The appellant had established that the covenant impeded reasonable residential use. The decisive issue under section 84(1)(aa) and section 84(1A) of the Law of Property Act 1925 was whether the covenant secured a practical benefit of substantial value or advantage to its beneficiaries. The Upper Tribunal was entitled to find that it did.
2. The thin-end-of-the-wedge principle can apply where an individual use causes little immediate harm but discharge may encourage similar applications and undermine the integrity or character of a wider scheme. The tribunal must determine each application on its facts and merits. An earlier discharge does not bind the tribunal in a later case, but it may alter the context in which later applications are assessed. The court relied on McMorris v Brown [1999] 1 AC 142 and Re Snaith and Dolding’s Application (1996) 71 P&CR 104.
3. The assessment is evaluative and principally one of fact rather than law. An appellate court should exercise caution when reviewing a specialist tribunal’s assessment of the evidence and should not intervene merely because another conclusion is possible. The reasoning was rational and adequately supported by witness evidence. The approach in Shephard v Turner [2006] 2 P & CR 611 was applied.
4. The planning position did not remove the covenant’s independent practical benefit. The Tribunal was entitled to look to the future, to take account of the limited likelihood of effective planning enforcement, and to consider the effect on owners, purchasers, enforcement costs and estate infrastructure.
5. The obsolescence argument had been overtaken by the concession limiting the restriction to overnight occupation. Once the practical-benefit requirement failed, the claim under section 84(1)(c) could not succeed.

• Court of Appeal (Civil Division): appeal dismissed on 29 March 2017.
• Upper Tribunal (Lands Chamber): application to discharge the restrictive covenant dismissed, [2015] UKUT 82 (LC).