Beeches Capital v Alison Hunt

Under section 84 of the Law of Property Act 1925, a restrictive covenant is not obsolete merely because the land’s use has changed. The relevant question is whether the covenant’s purpose, including control of the appearance and height of buildings, can still be achieved. On ground (aa), a restriction may secure a practical benefit even where that benefit has no measurable effect on market value. Loss of amenity may be compensated in money. Where the benefit is not of substantial value or advantage and compensation is adequate, the Tribunal may modify the restriction, having regard to planning policy, the covenant’s historical context and other material circumstances. Modification may be preferable to discharge where it permits only a carefully specified and conditioned development.

Beeches Capital applied under section 84 of the Law of Property Act 1925 to discharge or modify a 1959 restrictive covenant affecting Beeches Farm. The covenant prevented buildings on the relevant land other than agricultural buildings below specified height limits. The applicant had planning permission to demolish redundant agricultural buildings and construct a rural business and enterprise hub.

The objectors, who owned adjoining land benefiting from the covenant, accepted that the proposed redevelopment was a reasonable use and that the covenant impeded it. They relied on amenity interests arising from the scheme’s appearance, visibility, privacy and disturbance. The central issues were whether the covenant was obsolete, whether it secured practical benefits of substantial value or advantage, whether money would adequately compensate any loss, and whether modification should be granted.

1. Ground (a). Applying the four connected matters identified in Re Fermyn Wood [2018] UKUT 0411, the Tribunal considered the covenant’s purpose, changes in the property and neighbourhood, whether its purpose could still be achieved, and other material circumstances. The covenant’s purpose was to protect adjoining land by controlling the type, height and appearance of buildings. Although agricultural use had ceased, the appearance of the buildings remained within the covenant’s purpose. The relevant neighbourhood had not materially changed. The covenant was therefore not obsolete and ground (a) failed.
2. Ground (aa). The restriction impeded a reasonable use, namely the approved redevelopment. It secured a practical benefit by constraining the type of building visible from the objectors’ field when the existing security fence was removed. That benefit was real but not of substantial value or advantage. Preventing marginal differences in business activity, noise or traffic did not constitute a practical benefit in the circumstances.
3. The Tribunal rejected the submission, based on Blue Angel Properties Ltd v Jenner [2020] UKUT 0360 (LC), that a loss of amenity which did not affect market value could not be compensated in money. Compensation for amenity loss may be assessed even without a diminution in market value. The Tribunal assessed £15,000 as adequate compensation for the marginal amenity loss until approved planting matured.
4. Having regard to section 84(1B), the planning history and the established pattern of granting permission for non-agricultural use, the Tribunal exercised its discretion to modify rather than discharge the covenant. Modification was limited to the approved redevelopment scheme and its conditions, and did not create a precedent for future development. Ground (c) was not made out because the modification would injure the objectors.
5. The restriction was ordered to be modified under section 84(1)(aa), conditional on the applicant accepting the modification and paying £15,000 to the estate’s solicitors within three months. Each party was ordered to bear its own costs.