Rose Builders (Properties) Limited v Alpha Trust

A restrictive covenant expressed to secure a personal financial share in development value is not annexed to land where it confers no benefit on other land. Its benefit may be transferred only in accordance with the Law of Property Act 1925, section 136: a clearly identified written assignment and express notice are required. A recital in a later deed cannot cure the absence of transfer or establish estoppel by deed where it rests on an unexpressed assumption and is not certain, precise and unambiguous.

For overage, Existing Use Value is the value of the relevant land alone as agricultural land, without hope value. Enhanced Value is assessed at the Price Notice date by reference to the specified planning permission, without ransom value from earlier permissions. A developer may abandon a permitted development and need not serve a request for variation or pay the price if it does not proceed.

This first-instance Part 8 claim concerned restrictive covenants and overage provisions affecting two parcels: the Green Land, transferred by Manningtree High School Limited to Rose Builders, and a later Sliver transferred by Alpha Trust. Manningtree High School Limited subsequently transferred its undertaking, assets and liabilities to Alpha and was dissolved.

The court had to decide whether Alpha acquired the Green Land covenant and, for the Sliver, how Existing Use Value, Enhanced Value, ransom value, development costs, deductions and the valuation date were to be determined. It also had to decide whether Rose, having begun a wider development, was obliged to continue the release process, serve a Request or pay the Variation Price.

The claim was determined in part for each party. Alpha Trust was not entitled to the covenant over the Green Land, but was entitled to the covenant over the Sliver.

1. The Green Land covenant was personal to Manningtree High School Limited and secured a share in development value. It was not annexed to school land. The School Transfer Agreement was wide enough in principle to include the benefit, but the benefit was a thing in action. Section 136 of the Law of Property Act 1925 required a clearly identified written assignment and express notice. Those formalities were not proved.
2. The recital in the Deed of Variation could not itself transfer the benefit. Estoppel by deed was interpreted restrictively. The court applied the approach in Re Distributors and Warehousing Limited [1985] 1 BCC 995570 and approved the consistent reasoning in Reeve v McDonagh [2024] EWHC 439 (Ch): a recital must state specific facts with certainty, precision and clarity and cannot depend on an unexpressed assumption. Manningtree High School Limited was not a party to the deed and no detrimental reliance was shown.
3. Because Manningtree High School Limited had been dissolved, clauses 26.2 and 27 of the Land Swap Agreement left no person entitled to enforce the Green Land covenant. Rose could terminate the agreement and remove the restriction.
4. For the Sliver, Existing Use Value meant the value of the relevant land alone as agricultural land at the Price Notice date, without hope value. Enhanced Value was assessed by reference to the March 2023 Planning Permission and the relevant land alone. No ransom value arose from Phase 4a or other planning permissions. Access costs were attributed to the Green Land alone, the contractual deductions were taken from the 50 per cent difference, and the amended Price Notice date of 31 May 2023 was the appropriate valuation date.
5. Planning permission did not oblige Rose to complete the whole permitted development. Applying Hillside Parks Ltd v Snowdonia National Park Authority [2022] UKSC 30, partial compliant development remained lawful. Contractually, the release machinery did not oblige Rose to serve a Request or pay the Variation Price if it chose not to proceed. Payment was the condition for Alpha’s deed of variation, not an independent obligation.

Declarations were made accordingly.

not stated in the judgment.