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Re Quaffers Ltd’s Application(1988) 56 P & CR 142, Lands Tr.
LAND LAW – RESTRICTIVE COVENANT – DISCHARGE FOR OBSOLETENESS
The claimant’s land was bound by two restrictive covenants prohibiting business use of the land and the sale of alcohol. The land in the locale had once been an open area, but since then had been closed off by a series of dual carriageways. One covenant had been granted prior to the motorway’s construction, while the other was granted at the same time.
S.84 of the Law of Property Act 1925 grants the Upper Tribunal (formerly the Lands Tribunal) the discretion to alter or completely discharge restrictive covenants in any of four circumstances: the restriction should be considered obsolete due to changes in the character of the locale or other relevant circumstances, its continued existence would impede some reasonable user, those with the benefit of the covenant agree to the discharge or alteration, or the proposed discharge or alteration will not injure the beneficiaries. The court has a discretion to also award compensation.
The issue in this case was whether the restrictive covenants should be discharged on the grounds that they were ‘obsolete’.
The Land Tribunal discharged the covenants absolutely, without compensation.
The Tribunal considered that due to the development of the motorway, the land retained by those with the benefit of the covenant could not longer benefit from the restriction. In the case of the later covenant, this made it obsolete as soon as it was granted: it did not matter that there had been no passage of time or change in the neighbourhood between its grant and the application to discharge it.
In addition, since the owners of the retained land could no longer benefit from the restriction, there was loss of amenity warranting compensation.
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