Graham v Easington District Council

Factual and Procedural Background

This appeal concerns a decision of the Lands Tribunal regarding an application for the discharge of a restrictive covenant under section 84 of the Law of Property Act 1925. The covenant restricted the use of land to a coach depot with an associated bungalow. The appellant, who is both the adjoining landowner and the local planning authority, applied for discharge of the covenant to enable residential development of approximately 30 houses on the site, which is part of an industrial estate in the county of Durham. The council had previously granted outline planning permission for residential development in 2005 but later refused to discharge the covenant. The Lands Tribunal, presided over by Mr Trott FRICS, heard extensive evidence over three days before refusing the discharge. The appellant then appealed this decision.

Legal Issues Presented

1. Whether the Lands Tribunal erred in law in its approach to the discharge of the restrictive covenant under section 84 of the Law of Property Act 1925.
2. Whether the grant of planning permission by the local planning authority is determinative or merely a relevant factor in considering the discharge of the covenant.
3. Whether there had been a substantial change in circumstances since the grant of planning permission that would justify discharge of the covenant.
4. Whether the Tribunal’s conclusion was contrary to the evidence, particularly regarding the availability of industrial land and housing land.

Arguments of the Parties

Appellant's Arguments

• The appellant contended that the council’s refusal to discharge the covenant was inconsistent with its earlier grant of planning permission for residential use.
• It was argued that the council’s position as landowner allowed it a broader approach than as planning authority, but the council had failed to justify the refusal based on changed circumstances.
• The appellant relied on evidence showing a relative surplus of housing land and a shortage of industrial land, which had changed since the planning permission was granted.
• The appellant challenged the Tribunal’s conclusion as being legally incorrect and contrary to the evidence.

Appellee's Arguments

• The council argued that the discharge of the covenant would impede reasonable use of the land and that the covenant secured practical benefits in controlling development and preventing complaints from future residents that could curtail industrial use.
• It was submitted that circumstances had changed since the grant of planning permission, with increased pressure on industrial land supply exacerbated by new redevelopment proposals.
• The council maintained that the grant of planning permission was a relevant but not determinative factor and that the Tribunal was entitled to assess the matter afresh.
• The council contended that the Tribunal’s decision was factually and legally sound.

Table of Precedents Cited

Court's Reasoning and Analysis

The court carefully examined the Lands Tribunal’s application of section 84 of the Law of Property Act 1925, focusing on whether the restrictive covenant impeded reasonable use of the land and whether the practical benefits secured by the covenant were substantial. The Tribunal considered the grant of planning permission by the local planning authority to be highly persuasive evidence that the covenant did not confer substantial practical benefits, as the authority had previously balanced the interests in favour of residential development.

The court acknowledged the dual role of the council as both landowner and planning authority, noting the close alignment between these roles in this case. It found that the Tribunal was entitled to regard the grant of planning permission as "best evidence" of the lack of substantial practical benefit secured by the covenant.

Regarding the alleged change of circumstances, the Tribunal evaluated evidence about industrial land availability and housing supply. Despite some evidence indicating a shortfall of industrial land and a surplus of housing land, the Tribunal concluded these changes were not sufficiently substantial to alter the balance established at the time of planning permission. The tentative nature of proposed developments affecting industrial land availability was given limited weight.

The court also considered criticisms of the Tribunal’s reasoning, particularly the brevity of its conclusions, but found no legal error or perversity in the decision. It emphasized the importance of reading expert tribunal decisions benevolently and found the Tribunal’s conclusion adequately supported by the evidence and law.

Holding and Implications

The court DISMISSED THE APPEAL, upholding the decision of the Lands Tribunal to refuse the discharge of the restrictive covenant.

The direct effect is that the restrictive covenant remains in force, preventing the proposed residential development on the site. No new legal principles or precedents were established by this decision. The ruling confirms the discretion of the Lands Tribunal to weigh planning permission and changed circumstances in covenant discharge applications and affirms the importance of substantiality in assessing changes since planning permission.