Many developers have a fairly blasé attitude towards restrictive covenants, often pushing ahead with development projects in breach of such restrictions in the belief that they can easily be removed or modified by an application to the Lands Tribunal. In most situations the worst case envisaged by developers is that they might have to pay minor damages for the breach of a restrictive covenant. But in George Wimpey Bristol Limited v Gloucestershire Housing Association1 the Courts and Tribunal made it clear that developers can no longer ignore restrictive covenants and assume damages will be ordered in lieu of an injunction. In October 2006 George Wimpey Bristol Limited ('Wimpey) obtained planning permission on land it had purchased for development purposes. However, there was an issue with the site due to the existence of a restrictive covenant on part of the land that stated that no building should be erected. Despite the existence of the covenant Wimpey commenced with building work on the restricted land, and continued even after solicitors instructed by the party having the benefit of the restrictive covenant had communicated a request for them to cease construction. This was a deliberate strategy by Wimpey, carried out in the belief that by forcing through the development and altering the character of the land that the Land Tribunal would be persuaded to allow them to continue with the development. Not surprisingly the complainants commenced legal proceedings seeking an injunction to prevent development, and in response Wimpey made an application to the Lands Tribunal to modify the restrictive covenant under section 84(1)(aa) of the Law of Property Act 1925. The Tribunal agreed that the proposed use of the land by Wimpey was reasonable, but this was not enough for them to succeed. The key consideration was whether the covenant secured any practical benefit of substantial value or advantage to those in objection. The Tribunal held that it did, and that the practical benefits were of substantial value and advantage to the persons in benefit. Most significantly the Tribunal took an extremely dim view of the manner in which Wimpey had conducted themselves throughout the proceedings. It was evident Wimpey had deliberately flouted their legal obligations in the belief that their actions would lead to a finding in their favour. The Tribunal made it clear that even if Wimpey had succeeded in their case to modify the restrictive covenant, the Tribunal would not have exercised its discretion to modify the covenant as they were not inclined to reward parties who deliberately flout their legal obligations in this way. This decision makes it clear that it is no longer safe for developers to assume that they can build first and buy their way out of trouble later on the assumption that damages will be awarded in lieu of an injunction. The judgment of the Tribunal highlights the discretionary nature of its powers and also emphasises that the conduct of the applicant will have an impact on the decision reached. Restrictive covenants affecting development land are common and a cavalier attitude taken by developers could result in expensive consequences in having to undo any construction in breach and put the land back in the original condition. Gepp & Sons has a team of specialist solicitors who regularly advise CLA members on trees and a wide range of other rural issues. Contact Edward Worthy on 01245 493939 The above is not legal advice; it is intended to provide information of general interest about current legal issues.
Respect required for restrictive covenants.