Jason Butler v Flagship Housing Group

Under section 84 of the Law of Property Act 1925, establishing a statutory ground gives the Tribunal jurisdiction, but does not require it to discharge or modify a restrictive covenant. The Tribunal retains a discretion at a separate stage.

In exercising that discretion, the very recent origin of a covenant and the applicant’s close connection with the original covenantor may weigh decisively against relief, particularly where there has been no material change of circumstances. Practical benefits may include estate-management benefits enjoyed by a social housing provider, rather than merely financial bargaining leverage. An outline planning permission, with reserved matters unresolved, may make a controlled modification inappropriate.

Jason Butler applied under section 84 of the Law of Property Act 1925 to modify restrictive covenants imposed on six garages purchased at auction by his company from Flagship Housing Group in August 2023. The covenants restricted construction, development, use and related matters. Mr Butler had obtained outline planning permission for a bungalow but required modification of the covenants to implement it.

The Tribunal considered grounds (aa) and (c), including whether the covenants secured Flagship practical benefits of substantial value or advantage, whether their modification would injure Flagship, and whether the Tribunal should exercise its discretion given the recent transfer, the applicant’s connection with the original covenantor and the limited detail in the outline permission.

1. Jurisdiction and discretion. The application was dismissed. Under section 84(1) of the Law of Property Act 1925, the Tribunal first determines whether a statutory ground is established. If so, it must separately decide whether, and to what extent, to exercise its power to discharge or modify the covenant.
2. Ground (aa). The proposed dwelling was a reasonable use and the covenants impeded it. The Tribunal adopted the convenient framework associated with Re Bass’s Application, while emphasising that it was not a rigid checklist. The covenants secured Flagship a practical benefit because they formed part of its wider responsibility to manage a social housing estate and protect tenants’ amenity. Enforcement control alone would not suffice, but the estate-management context provided the necessary additional benefit.
3. The applicant had to demonstrate that the practical benefits were neither of substantial value nor of substantial advantage. In the absence of reliable valuation evidence, and given the unquantified effects on Flagship and its tenants, the Tribunal considered that money might not adequately compensate for the relevant loss. It concluded that the benefits probably were of substantial advantage. Ground (aa) therefore failed, and the parties accepted that ground (c) failed because modification would injure Flagship.
4. Discretionary stage. Even if jurisdiction had been established, relief would have been refused. Mr Butler controlled the company that entered into the transfer and was treated, for discretionary purposes, as standing in the shoes of the original covenantor. The covenant was less than three years old, and development preparations began within days of completion. Those factors justified respecting the parties’ recent bargain, absent any relevant change of circumstances.
5. The outline permission also left all matters reserved. The Tribunal lacked evidence about windows, doors and their effect on neighbours, making a controlled modification difficult. The application was dismissed. The decision was final save as to costs.

This was an application to the Upper Tribunal (Lands Chamber) under section 84 of the Law of Property Act 1925. No lower-court decision was stated. The application was dismissed, subject to the separate costs process.