Plot bought from local authority restricted to garden use only – Buyer seeking release for urgent family reason – Authority demanding high price for release even though no benefit derived from restriction – Whether authority having power to adopt same negotiating tactics as other property owners
Over a period of some 20 years as a council tenant of his house the plaintiff had been in dispute with the council over their neglect of a plot of land lying to the rear of his garden, which they allowed to be used for the dumping of rubbish. During 1984, and while he was proceeding to buy the house under the right-to-buy provisions of the 1980 Housing Act, he reached an agreement subject to contract to buy the plot from the council together with an access way, also in dispute, for £650 on the firm understanding that it would be for general domestic use and allow for the erection of a garage. To his anger and surprise the draft contract contained two restrictions: the first stipulating use as a garden only; the second prohibiting the erection of any building on the plot. Through solicitors he negotiated an amendment of the second restriction to the effect that consent to the erection of a building would not be unreasonably withheld. The purchase went ahead after verbal assurances from his solicitors and the council that there would no objection to building a garage on the plot. In 1988 he sought the council’s consent to build a bungalow on the plot, pointing out his need to provide a home for his son who had become seriously disabled as a result of an accident.
The council advised him to obtain planning permission, but having acted on that advice he was then told, correctly, by the council that the user restriction was unaffected by the amendment to the other clause. After a two-year correspondence the council offered to relax the user covenant for a consideration of £17,500, subsequently admitted to be the highest opening figure they could think of.
In July 1993 the plaintiff applied to the Lands Tribunal for discharge of the covenant under section 84 of the Law of Property Act 1925 whereupon the council lowered its asking price £5,125. Following the plaintiff’s refusal of that offer the council withdrew their opposition to the section 84 application, thus leaving the plaintiff free to build, but bereft of the necessary funds. His present claim for damages alleged various misrepresentations and numerous instances of callousness and insensitivity displayed by the council in its dealings over some 30 years.
Held The action was dismissed.
1. Although the plaintiff had established various instances of deplorable conduct on the part of certain council officers with whom he dealt from time to time, his misfortunes disclosed nothing to support a claim for damages whether for misrepresentation or otherwise. Nor could he point to any legal principle which subjected local authorities to standards of fair dealing higher than those applicable to property owners in general, since a council enjoyed the same freedom as any other negotiating party to resile from bargains made subject to contract, and were likewise free to open negotiations at price levels which they knew to be unrealistic.
2. Although it was not necessary to decide the point, it could well be that the duty of a council under the Local Government Act 1972 section 123 not to dispose of land for a consideration less than the best that can be reasonably obtained, extended to the release of a restrictive covenant.
The plaintiff appeared in person; Timothy Mould (instructed by Stonehams, of Croydon) appeared for the council.
