Domus Living Limited v Edward VII Estates Limited

Under Law of Property Act 1925, s 84, an unsupported concern about a possible future planning response does not establish injury from discharging a covenant; freedom from worry about an unevidenced risk is not a practical benefit. If discharge will not injure the beneficiary under ground (c), the covenant cannot confer a practical benefit of substantial value or advantage under ground (aa). A covenant may be obsolete where its original purpose has ended. Compensation for the covenant’s effect on the original price requires evidence that the land could in fact have sold for more in the market without it.

Domus Living Limited owned Southwood, a plot on the former King Edward VII hospital estate. It had built a larger house than the 2014 planning permission allowed, contrary to a covenant requiring development in accordance with that permission. Edward VII Estates Limited, the objector and former estate owner, agreed to discharge a separate consent covenant but opposed discharge of the planning covenant, asserting that the breach could affect future enabling development and seeking compensation.

Some remaining residential development land had been transferred to Edward VII Estates Two Limited, a related company to which the covenant’s benefit had not been assigned. Domus applied to the Tribunal under s 84 of the Law of Property Act 1925 to discharge or modify the planning covenant. The issues were whether a statutory ground for jurisdiction was established, whether the Tribunal should exercise its discretion to discharge the covenant, and whether compensation was payable.

1. Jurisdiction and injury. The Tribunal explained that a s 84 application involves two stages: the applicant must first establish a statutory ground for jurisdiction, after which the Tribunal decides whether to exercise its discretion. The objector’s asserted planning risk was unsupported. Its valuer assessed the yard on assumptions that residential permission would be sought and granted and that the breach would reduce the permission available elsewhere, rather than valuing the retained land on the basis of a risk. There was no evidence supporting those assumptions or that the objector would suffer injury. The nearby presence of similarly sized houses also weakened the claim that development was limited to the precise amount needed to fund the conservation deficit. Freedom from worry about an unevidenced risk was not a practical benefit. Ground (c) was met, and the Tribunal stated that success under ground (c) necessarily meant success under ground (aa), since a covenant that would cause no injury could not confer a practical benefit of substantial value or advantage.

2. Obsolescence and discretion. The covenant’s original purpose was to protect the grant of permission for enabling development. The objector would carry out no further residential enabling development because the relevant land had passed to E7E2 without the covenant’s benefit being assigned. The covenant therefore had no remaining purpose and was obsolete. The Tribunal rejected allegations of concealment and cynical breach. Although it did not accept that the director’s solicitors had failed to explain the covenants, it found that he had not understood or taken in that advice and was unaware of the planning covenant until the sale in 2024. This differed from Alexander Devine Children’s Cancer Trust v Housing Solutions [2020] 1 WLR 4783, where development proceeded in full knowledge of the covenant. The Tribunal left open whether the director’s carelessness would weigh against discharge if ground (aa) alone applied. Given the absence of injury or practical benefit and the covenant’s obsolescence, it exercised its discretion to discharge it.

3. Compensation and order. No compensation was payable for loss or disadvantage caused by discharge. For compensation based on the effect of the restriction when imposed, the question was whether the land could in fact have been sold for more without the covenant, having regard to the market. The objector bore the burden of proving that possibility. The sales particulars did not mention the covenant, the price was unchanged after the purchaser learned of it, and the expert valuation did not overcome the evidence of the actual marketing history. The objector did not prove that a higher price could have been achieved. The consent covenant was discharged by agreement; the planning covenant was discharged; no compensation was payable.

This was an original application under s 84 of the Law of Property Act 1925. The Tribunal had refused Edward VII Estates Two Limited’s application to join as an additional objector by order dated 5 November 2025.