[2024] UKUT 00001 (LC)

Mr Jarvis’s submissions broadly followed the grounds in s.84, commencing with obsolescence (ground (a)). He noted that the neighbourhood did not exist in 1980 when the covenant was included in the transfer of the property and the area had changed beyond measure since then. He considered that no reasonable covenantee would have withheld consent to the extensions in 2018. Mr Jarvis also postulated, under the same heading although it was not a matter of obsolescence, that the objectors were well aware of the extensions at the time when they were being built and they had no real interest in preventing them. He drew attention to the decision of the House of Lords in P&A Swift Investments v Combined English Stores Group Plc, [1988] UKHL 3 where it was noted, in a case concerning a covenant in a lease and in particular whether an assignee of the reversion was entitled to the benefit of a surety covenant, the Court of Appeal had held that:

Under the heading of ‘impediment’ his submissions largely aligned with ground (aa). He remarked that the Building Control department of the local authority had no issue with the extensions and neither did any of the neighbours including Mr Anthony Dinshaw. He asserted that the covenant did not secure any practical benefits to the objectors and that money would be adequate compensation to them. However, given that the extensions have not hurt the objectors any compensation should be extremely small.

Mr Jarvis then moved on to the acquiescence said to have been given by the original covenantee in 2018. He noted that Mr Roy Dinshaw was consulted and gave his approval for the extensions. Similarly, Mr Anthony Dinshaw appeared to expressly agree although his consent was verbal. He also referred to Mahon v Sims [2005] 3 E.G.L.R. 67, which he considered relevant in view of the similarity of its circumstances to this case. Hart J held that a freehold restrictive covenant prohibiting building which is not in accordance with plans approved by the person who has the benefit of the covenant will be subject to an implied term that consent will not be arbitrarily or capriciously withheld, nor withheld for improper motives.

In terms of injury (ground (c)), Mr Jarvis said that the original covenantee is no longer in a position to suffer any injury. He considered that objectively it was impossible to recognise how the objectors could suffer any injury because their land has no commercial value. Equally they could not suffer on behalf of other covenantees who have not themselves objected. He concluded that the objectors were motivated by securing substantial compensation for the discharge but there was little or no quantifiable loss. Referring to Stockport Metropolitan Borough Council v Alwiyah Developments [1986] 52 P&CR 278, he noted that the proper assessment of compensation for the purposes of section 84(1) is by reference to the diminution of the value of the land with the benefit of the covenant, rather than the loss of opportunity to extract a share of the development value of the applicant's land.