Clarion Housing Association Ltd v Chitty and others

Restrictive covenants – Discharge – Modification – Section 84(1)(a) and (aa) of Law of Property Act 1925 – Applicant owning land subject to restriction prohibiting use of land other than as “old persons’ warden scheme” – Applicant seeking modification to permit general residential use – Whether restriction obsolete – Whether modification securing no practical benefit to objectors – Application granted Court Lodge, in Wrotham, near Sevenoaks, Kent, was an estate originally comprising around 14 acres in the centre of the village. In 1975, just over two acres (the application land) in the south-west corner of the estate was sold to the local authority. The conveyance limited the use of the site to an old persons’ warden scheme with gardens and ancillary uses. Planning permission was subsequently granted for a warden-controlled housing scheme known as St George’s Court. It was demolished in 2023 and the application land was now a cleared site. The application land was now owned by the applicant, a social housing provider. It said that warden-controlled schemes for older people were no longer viable and secured planning permission for a general residential development and applied to the tribunal to have the restrictions in the conveyance modified or discharged to enable that development to take place relying on section 84(1)(a) (the restriction was obsolete) and (aa) (it impeded a reasonable use of the land and secured no practical benefit to those benefiting from it). The application sought: (i) the modification of clause 2(a) to remove the reference to an “old persons’ warden scheme”, and widen the restriction to provide that the application land would not be used other than for “residential and ancillary purposes”; (ii) the discharge of clause 2(b) to remove the requirement to obtain the vendors’ written consent for the erection or alteration of buildings. Held: The application was granted. (1) If the character of an estate as a whole or of a particular part of it gradually changed, a time might come when the purpose of the restriction could no longer be achieved. When that time came, it might be said that the covenants had become obsolete, because their original purpose could no longer be served and it was in that sense that the word “obsolete” was used in section 84(1)(a). A restriction would therefore be deemed “obsolete”, in the ground (a) sense, if because of relevant changes the objectives for which it was imposed could no longer be achieved: Re Truman Hanbury & Buxton & Co Ltd’s Application [1956] 1 QB 261 considered. In this case, both the applicant and the objectors made the mistake of assuming that the purpose of the restriction was to ensure that the application land was used to accommodate older people. But the purpose of the restriction was not to guarantee that the land would be used for supported housing, but to prevent it from being used for any other purpose. Viewed objectively, the purpose and effect of the restriction was to ensure that land in the centre of the village was not used for any purpose which might have been thought objectionable.  While the applicant’s evidence demonstrated that it was unable to design a development which would be financially viable while remaining within the restriction of use to an old persons’ warden scheme, that was not the issue. The restriction still had the effect of limiting the use which might be made of the application land by prohibiting any use other than for housing for older people and remained fully enforceable. The purpose of the restriction could still be achieved, and it was not obsolete. (2) The applicant, or more realistically another developer, might well be able to undertake a development of the application land for freehold or leasehold sale without any modification of the restriction being required, with a view to replicating the model of a nearby development. It had not been shown that such a development would not be financially viable. Therefore, the tribunal was not satisfied that the case on ground (a) had been made out in relation to clause 2(a). The applicant’s case on ground (a) did not focus in particular on the restriction in clause 2(b), which required the vendors’ written consent to any development of the land. But that restriction was obsolete. The original vendors were dead and could not give their consent. The purpose of the restriction was incapable of achievement, and it had become obsolete. (3) In determining whether a restriction ought to be discharged or modified under ground (aa), the tribunal was required to take into account the statutory development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the area. It also had to have regard to the period at which and context in which the restriction was imposed and any other material circumstances. If the applicant’s proposals were implemented, land which was previously used for residential purposes would resume that use; the only difference would be that those who were accommodated at the proposed development would no longer be exclusively older people. The proposed use was reasonable for the purposes of section 84(1). The restriction also clearly impeded the intended use. While it did not affect the physical building of the new scheme, it would not be restricted to older people, nor would there be a warden, so the applicant would be unable to let or sell the new units as it wished to. The relevant comparison was between the application land developed subject to the restriction, and therefore used only as warden-supported accommodation for older people, and the application land, developed but free of the restriction and occupied by people of any age, including families who might be expected to occupy the proposed two and three-bedroom houses. (4) On the evidence, only the properties that directly adjoined the application land, or were very close to it, might be affected in any way by the new development. But given that the development had been designed to mirror the scale and massing of the previous buildings, there was unlikely to be any discernible effect upon them in terms of amenity or value, and there was no expert evidence from the objectors to suggest otherwise. Therefore, in impeding the proposed development, the restrictions secured no practical benefits of substantial value or advantage to the objectors. Accordingly, the application succeeded in relation to clause 2(a) of the conveyance under ground (aa), and in relation to clause 2(b) under ground (a). An order would be made discharging clause 2(b) and modifying clause 2(a) to provide that the application land would not be used other than for “residential and ancillary purposes”.  No award of compensation was appropriate. Ben Maltz (instructed by Weightmans LLP) appeared for the applicant; the objectors did not appear and were not represented. Eileen O’Grady, barrister Click here to read a transcript of Clarion Housing Association Ltd v Chitty and others