![]() |
[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback] [DONATE] | |||||||||
United Kingdom Upper Tribunal (Lands Chamber) |
||||||||||
PLEASE SUPPORT BAILII & FREE ACCESS TO LAW
To maintain its current level of service, BAILII urgently needs the support of its users.
Since you use the site, please consider making a donation to celebrate BAILII's 25 years of providing free access to law. No contribution is too small. If every visitor this month gives just £5, it will have a significant impact on BAILII's ability to continue providing this vital service.
Thank you for your support! | ||||||||||
You are here: BAILII >> Databases >> United Kingdom Upper Tribunal (Lands Chamber) >> CAMMIADE, Re: 1 Acacia Grove (RESTRICTIVE COVENANT - JURISDICTION - whether a covenant prohibiting registration of a transfer without the consent of the covenantee is a "restriction ... as to the user") [2023] UKUT 96 (LC) (17 April 2023) URL: https://www.bailii.org/uk/cases/UKUT/LC/2023/96.html Cite as: [2023] UKUT 96 (LC) |
[New search]
[Contents list]
[Context]
[View without highlighting]
[Printable PDF version]
[Help]
UPPER TRIBUNAL (LANDS CHAMBER)
LC-2022-593
Royal Courts of Justice,
Strand, London WC2
13 April 2023
TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
RESTRICTIVE COVENANT - JURISDICTION - whether a covenant prohibiting registration
of a transfer without the consent of the covenantee is a “
restriction
… as to the user” of land - whether Upper Tribunal having jurisdiction to discharge such a
restriction
- s.84(
1),
Law of Property Act
1925
- application dismissed
APPLICATION UNDER SECTION 84 OF THE LAW OF PROPERTY ACT 1925
BY:
YOUNG CAMMIADE
Applicant
New Malden, Surrey
Martin Rodger KC, Deputy Chamber President
Determination on written representations
1. Does section 84(1)
of the Law of Property Act
1925
confer power on the Upper Tribunal to discharge a
restriction
arising under a covenant prohibiting the
registration
of a transfer of a
registered
lease without the consent of the covenantee?
2. That is the question which arises under this application by Ms Young Cammiade
to discharge a
restriction
binding her leasehold interest in a flat at No.
1
Acacia
Grove,
New Malden.
3. No. 1
Acacia
Grove
is one of four flats in a two storey block. It is on the first floor, directly above No. 3
Acacia
Grove.
It has been owned by Ms
Cammiade
since 2013 under a lease for a term of 999 years granted on 23 March
1960.
4. In 1983
the
respective
owners of Nos.
1
and 3 entered into a Deed of Covenant which has subsequently been lost. In view of the fact that the flats are each subject to very long leases, it seems likely that the lost Deed contained mutual covenants concerning the occupation, upkeep and management of the building which could be enforced by the two leaseholders without the need to
rely
on their landlord. But as the only document which might provide a clue to the contents of the Deed are the leases themselves, copies of which have not been provided, that is a matter of speculation.
5. The 1983
Deed was discharged by a Deed of
Release
and Substitution made between the same parties and the intending purchaser of No.
1
on 27 September
1988.
By that Deed the purchaser of No.
1
and the then owner of No.3 (
referred
to in the Deed as “the Lower Lessee”) covenanted to observe and perform the covenants in the
1983
Deed. Unfortunately those covenants were not
recited
in the
1988
Deed so its effect
remains
unknown.
6. Presumably to ensure the continuation of the mutual covenants on subsequent disposals, the parties to the 1988
Deed each applied to the
Registrar,
in terms agreed between them and
recorded
in the Deed, for the entry of a
restriction
on their
respective
registers
of title. The
restriction
entered on the title of No.
1
was in these terms:
“Except under an Order of the Registrar
no transfer or lease is to be
registered
without the consent of the Lower Lessee or other the
registered
proprietor for the time being of title number SY245193.”
7. The original title number of No. 3 Acacia
Grove
has since been closed and
replaced
by a new title number and no
restriction
requiring
the consent of the owner of No.
1
appears on that title. But the
restriction
quoted above
remains
on Ms
Cammiade’s
title and has proved an obstacle to her ability to sell her flat. Terms were agreed with a prospective purchaser last year and Ms
Cammiade’s
solicitors wrote to the
registered
proprietors of No. 3 in September and again in October
2023
asking for their consent to the
removal
of the
restriction.
No
response
was
received
to either of those
requests.
8. On 24 November 2022 Ms Cammiade
applied to the Tribunal under section 84 for the discharge of the
restriction.
Section 84(
1)
is in the following terms:
“The Upper Tribunal shall (without prejudice to any concurrent jurisdiction of the court) have power from time to time, on the application of any person interested in any freehold land affected by any restriction
arising under covenant or otherwise as to the user thereof or the building thereon, by order wholly or partially discharge or modify any such
restriction
on being satisfied … [there then follow the conditions for the exercise of the power]”
9. The power to modify or release
restrictions
affecting freehold land is extended by section 84(
12)
to leasehold covenants where the land is subject to a term of forty years or more, of which more than twenty-five years have expired.
10. The Tribunal’s Registrar
responded
to the application by pointing out to Ms
Cammiade’s
solicitors that the its jurisdiction to discharge extends only to
restrictions
“as to the user” of land and he invited submissions addressing whether a
restriction
limiting the circumstances in which a transfer may be
registered
was within that power. When these were
received
the Tribunal directed service of the application on the current owners of No. 3
Acacia
Grove
at the address given for them by Ms
Cammiade’s
solicitors. Once again, they have not
responded.
11. In Westminster City Council v Duke of Westminster [1991]
4 All ER
136
the High Court was asked to consider whether the Lands Tribunal (the statutory predecessor of this Tribunal, in which the power under section 84 was then vested) had power to modify a covenant
requiring
the Council to use land gifted to it by the Duke as “housing for the working classes”. Harman J interpreted the covenant as one imposing a positive obligation on the Council to use the land for the stated purpose and said, at page
147f,
that “the Lands Tribunal can only modify
restrictive
covenants”. By that he meant a covenant
restrictive
“as to the user” of land. To the same effect, in
Re
Blyth Corporation’s Application (
1962)
14
P & CR 56 the Lands Tribunal dismissed an application to discharge a covenant to erect and maintain a boundary fence on the grounds that it fell outside the jurisdiction.
12. There is no doubt that the Tribunal cannot discharge a positive covenant, one requiring
the covenantor to do something. But the
restriction
in this case is not of that kind. It is entirely negative in form and effect. It prevents the doing of something, namely,
registration
of a transfer or a lease without the consent of the owner of No. 3.
13. The short question in this case is whether such a restriction
is a
restriction
“as to the user” of land. If it is, the Tribunal will have jurisdiction to discharge the
restriction
on being satisfied of one of the statutory grounds. If it is not, the Tribunal will have no power to assist Ms
Cammiade
whether it would like to or not.
14. I am not aware of any reported
decision on the question, and none is
referred
to by Ms
Cammiade’s
solicitors or mentioned in the leading textbooks.
15. The question did arise directly in Re
Milius’s Application (
1995)
70 P & CR 427 but was dodged by the Lands Tribunal (Judge Marder QC, President). That case concerned a covenant imposed on the sale of a flat by a local housing authority pursuant to the statutory right to buy conferred by section
157,
Housing Act
1985.
The covenant prohibited any
disposal of the land without the consent of the authority (which would be given only if the intended disposal was to a person already living or working in the immediate locality). It was said by the applicant that the restriction
prevented any prospective purchaser from obtaining a mortgage and he sought its
removal
under section 84.
16. One point taken on behalf of the local authority in opposing the application was that the covenant “was not a restriction
on user but a
restriction
on disposal”. In his decision, at page 432, the President said that he had entertained “considerable doubt” as to whether the covenant “falls within the jurisdiction conferred by section 84(
1)
which, he explained, “means that the Tribunal may only consider a covenant which has the effect of imposing a
restriction
on the user of the land or of the buildings on the land”. Describing the question as “not without difficulty” the President suggested that it was “perhaps arguable that the user of the property may in practice be limited or
restricted
by the
restriction
on free disposition of a legal interest.”
17. In the event the application was dismissed as the Tribunal was not satisfied that the grounds relied
on were established by the evidence, so it was not necessary to determine the logically prior question whether the covenant was within the scope of section 84(
1)
at all. The single sentence in which the President suggested a possible argument in favour of the Tribunal having jurisdiction nevertheless
represented
the high point of the submissions provided by Ms
Cammiade’s
solicitors.
18. Section 84(1)
allows the modification or discharge of a
restriction
affecting land where the
restriction
is “as to the user thereof or the building thereon”. The section as a whole is concerned with what may lawfully be done on land, and in that context both “user thereof” and “building thereon” appear to be intended to
refer
directly to the activity being conducted on the land and for which it is being used. The same focus on physical activity is apparent in Shephard v Turner [2006] 2 P & CR 28, at [58], where Carnwath LJ said that the
reference
in ground (aa) of section 84(
1)
to “
reasonable
user” “seems to me to
refer
naturally to a long-term use of land, rather than the process of transition to such a use”.
19. In my judgment the restriction
in this case is clearly not a
restriction
“as to the user” of No.
1
Acacia
Grove.
It is concerned only with the completion of a disposition by
registration
in the
register
of title. It does not impinge, directly or indirectly, on what the flat may lawfully be used for. I am not persuaded that the effect of such a
restriction
in limiting who may become the
registered
proprietor of the flat is
relevant
or that any possible practical impact which such a limitation may have on the use which may be made of the flat is sufficient to bring the
restriction
within the Tribunal’s power. Even if, in practice, the effect of the
restriction
was that the flat could not be sold and was left unoccupied for a time, that would not demonstrate that the
restriction
itself was a
restriction
on the use of the land.
20. I regret
therefore that the Tribunal cannot assist and that the application must be dismissed.
21. By way of consolation, I would point out that the applicant’s advisers appear to have taken an excessively pessimistic view of the meaning and legal effect of the restriction
which may have caused them to knock on the wrong judicial door in search of
relief.
In Ms
Cammiade’s
statement of case, settled by counsel, it is asserted that the
restriction
gives the owners of No. 3
Acacia
Grove
“a wholly unfettered ability to
refuse
consent” to a
request
to allow a
disposition to be registered.
That seems a surprising construction of the covenant. The purpose of the
restriction,
as I have said, was probably to shore up the mutual covenants in the
1988
Deed (some perhaps positive in nature) by preventing a transfer of title and so providing an opportunity for a
replacement
deed to be entered into by the proposed transferee. In that context a
refusal
of consent which was unrelated to that purpose might well be thought to be outside the intention of the covenanting parties. Where a contract confers a discretion on one party (such as to
refuse
consent for something the other party wants to do), and the exercise of that discretion may adversely affect the interests of the other party, it will usually be implied that the discretion must be exercised honestly and rationally and for the purpose for which it was conferred (see Lewison: The Interpretation of Contracts, at para.
14.11).
It would be odd for the
restriction
in this case to be interpreted differently.
22. I would also point out that the three letters sent by Ms Cammiade’s
solicitors to the
registered
proprietors of No. 3 (including giving notice of this application) were to the address given for them in the
register
of title more than twenty years ago. That may still be their address, or it may not, but in any event, as it is not far from her own flat, Ms
Cammiade
might think it worthwhile to find out and, if possible, to explain to them in person what assistance she would like them to provide.
Martin Rodger KC,
Deputy Chamber President
Right of appeal
Any party has a right of appeal to the Court of Appeal on any point of law arising from this decision. The right of appeal may be exercised only with permission. An application for permission to appeal to the Court of Appeal must be sent or delivered to the Tribunal so that it is received
within
1
month after the date on which this decision is sent to the parties (unless an application for costs is made within
14
days of the decision being sent to the parties, in which case an application for permission to appeal must be made within
1
month of the date on which the Tribunal’s decision on costs is sent to the parties). An application for permission to appeal must identify the decision of the Tribunal to which it
relates,
identify the alleged error or errors of law in the decision, and state the
result
the party making the application is seeking. If the Tribunal
refuses permission to appeal a further application may then be made to the Court of Appeal for permission.