Fosse Urban Projects Limited v Robert Whyte & Ors

Under the Law of Property Act 1925, jurisdiction to discharge or modify a restrictive covenant does not require the Tribunal to grant relief. Under ground (a), a covenant is obsolete where its original purpose can no longer be achieved because of material changes. Under ground (aa), the Tribunal considers whether the proposed use is reasonable, whether the covenant impedes it, and whether the impediment secures practical benefits of substantial value or advantage. Amenity and privacy may constitute practical benefits even where their financial value is difficult to quantify. A developer who knowingly builds in breach and applies afterwards must explain that conduct. A cynical build-first-and-apply-later approach may justify refusal of relief despite jurisdiction being established.

Fosse Urban Projects Limited applied under section 84 of the Law of Property Act 1925 to discharge or modify a covenant restricting land to garden use connected with adjoining property. A house had already been built on the land in breach of the covenant. The objectors owned neighbouring properties which the Tribunal had previously found to benefit from the covenant. They relied on loss of open aspect, privacy, amenity and value.

The application relied on grounds (a), (aa) and (c). The issues were whether the covenant was obsolete, whether its continuation secured practical benefits of substantial value or advantage, whether the objectors would be injured, and whether relief should nevertheless be granted in the Tribunal’s discretion.

1. Ground (a). The Tribunal held that the covenant was obsolete. The land was formerly near the boundary of the built area but was now encircled by housing. Its likely purpose of preserving that boundary could no longer be achieved.
2. Ground (aa). The proposed residential use was reasonable and the covenant impeded it. Following the sequence in Re Bass Ltd’s Application, the Tribunal held that the covenant secured practical benefits. Retention of an open aspect and prevention of overlooking were practical benefits, even though their financial effect was difficult to isolate.
3. The benefits were not of substantial value or advantage. The evidence did not reliably establish the amount of any diminution in value. The Tribunal therefore had jurisdiction to modify the covenant. Ground (c) was not satisfied because the objectors would nevertheless suffer injury.
4. Discretion. Jurisdiction and the exercise of discretion were distinct stages. The applicant was an experienced, legally advised developer which had built the house before seeking relief and had provided no satisfactory explanation. Applying Royal Mail Group Ltd v Efobi and Ahuja Investments Ltd v Victorygame Ltd & Anor, the Tribunal drew an inference from the absence of evidence. In light of Millgate Developments Ltd and another v Alexander Devine Children’s Cancer Trust, the conduct was characterised as cynical. The application was refused.
5. The Tribunal noted that enforcement or damages claims arising from the breach lay outside its jurisdiction.

First-instance application to the Upper Tribunal (Lands Chamber). The decision records a right of appeal to the Court of Appeal on a point of law, with permission, but no appeal had occurred.