Background
Domus Living owned Southwood, a plot within the redevelopment of the former King Edward VII Hospital estate at Midhurst. Its predecessor bought the plot subject to covenants requiring any house to follow a 2014 planning permission and restricting material external alterations without the transferor’s consent.
Domus obtained a fresh 2017 planning permission and built a six-bedroom house substantially larger than the house approved in 2014. When a prospective purchaser withdrew in 2024 because of the covenant breach, Domus applied under section 84 of the Law of Property Act 1925 to discharge or modify the covenants. Edward VII Estates consented to discharge of the consent covenant but opposed discharge of the planning covenant and sought compensation.
The Court’s Holding
The Upper Tribunal discharged the planning covenant. It held that discharge would not injure Edward VII Estates, that the covenant gave it no practical benefit of substantial value or advantage, and that it was obsolete. The objector had transferred the remaining residential-development land to a related company that did not have the covenant’s benefit.
The alleged risk that a planning authority might reduce future enabling development on the retained land was unsupported by evidence. The objector’s valuation evidence assumed, rather than assessed the likelihood of, future residential permission and a resulting loss. The Tribunal also rejected the allegation of a cynical breach: although Mr Henderson should have known of the covenant, the evidence did not establish dishonesty, concealment, or development undertaken in full knowledge of its effect.
Key Takeaways
- A section 84 application succeeds on ground (c) where discharge will not injure the beneficiary; this also established ground (aa) here.
- Speculative planning risk, without evidence of intended development, likely permission, or actual value impact, cannot show practical benefit or injury.
- No compensation was payable because the objector proved neither loss from discharge nor that the covenant reduced the 2015 sale price.
Why It Matters
The decision illustrates the evidential burden on a covenant beneficiary resisting discharge. A concern about possible effects on future planning negotiations is insufficient without reliable evidence connecting the breach to a real financial or land-use disadvantage.
It also distinguishes carelessness from the deliberate, informed conduct that may justify refusing relief under the discretionary stage of section 84.