Newton Poppleford and Harpford Parish Council v Winifred Preston & Anor

For the purposes of Law of Property Act 1925, s.84(7), a disposition is not gratuitous where the recipient assumes substantial positive obligations, even if the transferor receives no money. Negative covenants restricting how transferred land may be used do not themselves prevent a disposition from being gratuitous.

A restriction is not obsolete merely because no person currently wishes to use land for the sole permitted purpose. Obsolescence requires the restriction to have ceased to serve a practical purpose, or the original purpose to have become impossible. Where a restriction impedes a reasonable use without securing practical benefits of substantial value or advantage, the Tribunal may modify it after considering the statutory and contextual matters relevant to its discretion.

In 1983 George Compton transferred land to Newton Poppleford and Harpford Parish Council for a doctors’ surgery. The Council covenanted to construct the surgery and restricted use of the land to that purpose. After the medical practice left in 2022, no replacement doctor could be found.

The Council applied under s.84 of the Law of Property Act 1925 to modify the covenant so that the building could be used for other medical or health services. The adjoining landowners, Winifred Preston and John Preston, objected. The issues were whether s.84(7) excluded the Tribunal’s jurisdiction, whether the restriction was obsolete under s.84(1)(a), whether it impeded a reasonable use without securing practical benefits under s.84(1)(aa), and whether the discretion to modify should be exercised.

1. Jurisdiction. The transfer was a disposition for public purposes, but it was not gratuitous within s.84(7) of the Law of Property Act 1925. The Council assumed substantial positive obligations, principally to construct the surgery within three years and also to undertake future works and payments. A negative obligation restricting use would not prevent a disposition from being gratuitous, but a positive obligation to incur expense or do something would. The Tribunal applied the distinction supported by Midland Bank Trust Co. v Green [1981] AC 513 and City of Westminster v Duke of Westminster (1991) 23 HLR 174.
2. Obsolescence. The restriction was not obsolete under s.84(1)(a). Lack of demand for the permitted use did not by itself make the restriction obsolete. Obsolescence requires the restriction to have ceased to serve any practical purpose, or circumstances to have changed so substantially that achieving the original purpose has become impossible. Neither condition was established.
3. Reasonable use and practical benefit. The proposed ancillary medical and health services were reasonable uses of the building. The restriction impeded those uses, but secured no practical benefit of substantial value or advantage to the persons entitled to enforce it. Ground (aa), read with s.84(1A), was therefore made out.
4. Discretion and order. The Tribunal considered the statutory development and planning matters, the period and context of creation, and other material circumstances under s.84(1B). The Council’s role as original covenantor was relevant, but the building’s continuing vacancy, expense and potential community benefit outweighed the objections. The restriction was modified without compensation to permit use as a doctors’ surgery or for any other medical or health service.