Restrictive covenant – Application to modify restriction – Section 84(1)(a) and (aa) of Law of Property Act 1925 – Long leases of chalets in holiday park subject to restriction requiring non-occupation for two-month period in winter – Condition in planning permission for park varied to remove such requirement – Whether restriction obsolete – Whether securing practical benefit of substantial value or advantage to freeholders – Application dismissed
The appellants were the lessees of 67 chalets in a holiday park. Each of their 999-year leases contained a restrictive covenant that prevented the use of the chalets for any purpose other than a holiday chalet and prohibited living in or occupying them in January and February. That covenant partly reflected the terms of the original 1974 planning permission for the holiday park. In 2006, the permission had been varied to remove the requirement for non-occupation during that period, while retaining the requirement for holiday use only. The applicants applied, under section 84(1) of the Law of Property Act 1925, for the restrictive covenant to be modified to remove the exclusion of occupation during January and February. The owners of the holiday park, who had acquire the freehold in 2008, objected to the application.
The applicants contended that: (i) the restriction had become obsolete, within section 84(1)(a), since it had been imposed solely to secure compliance with the condition in the original planning permission and had not been enforced by the previous freeholder; and (ii) it impeded a reasonable user of the land and did not secure to the freeholders any benefits of substantial value or advantage, within section 84(1)(aa). In support of the latter ground, they argued that lessees were entitled to, and often did, carry out maintenance work on their chalets in January and February, such that the freeholders could not close the park completely during those months. The freeholders contended that having a two-month winter shutdown was advantageous to them as landlords because it permitted maintenance and improvement works to be carried out more conveniently and economically and enable other savings to be made in respect of staff and other costs.
Held: The application was dismissed.
(1) Where a lessee applied to discharge or modify restrictions contained in a lease, the landlord’s interest should be borne in mind. In the instant case, it was relevant that the freeholders held the reversionary interest not only in each of the chalets, including those that were not the subject of the application, but also an interest in possession in the remainder of the park. As landlords, they had obligations under each lease to maintain the estate, including the drainage, grassed areas, footpaths, roadways and car parks and any amenity centre. As freeholders, they had an interest in ensuring that the park was maintained and operated so that they could maximise the value of any new lodges or chalets that might be built and of existing chalets whose leases might become liable to forfeiture. The ability to have a winter shutdown was of real potential benefit, and landlords in their position might want to have such a shutdown to save staffing and other costs and to simplify the carrying out of maintenance and other works, for which the site rules might not be adequate. Accordingly, the restriction conferred a practical benefit of substantial value or advantage to the freeholders, and the ground in section 84(1)(a) was not made out.
(2) Nor could the applicants show that the restriction had become obsolete within section 84(1)(a). The test of obsoleteness was whether the purpose for which the restriction was imposed could still be achieved: Re Truman, Hanbury Buxton & Co Ltd’s Application (1955) 166 EG 564 applied. Since the covenant did not incorporate the precise words of that planning condition, that suggested that its purpose was not only to ensure compliance with the condition. Moreover, the benefits that the landlords might derive from a winter shutdown would have been perceptible from when the planning permission was granted in 1974. Accordingly, it could not be concluded that the only reason for the restriction was to ensure compliance with the relevant planning condition. It followed that the variation effected by the 2006 planning permission had not rendered the restriction obsolete.
Rawdon Crozier (instructed by Wolferstons, of Plymouth) appeared for the applicants; Ewan Paton (instructed by Meade King, f Bristol) appeared for the objectors.
Sally Dobson, barrister
