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Background:
Property may be subject to a restrictive covenant preventing it being used for a particular purpose. If a landowner wishes to use the land in contravention of the covenant, he may seek a release from the party who has the benefit of the covenant. Obviously, this can be expensive.
Furthermore, it may not be possible to secure a full release if the identity of all the beneficiaries of the covenant cannot be established. It may also be possible to obtain restrictive covenant indemnity insurance to guard against the risk of enforcement of the benefit of a covenant. There is another way to procure the release of a covenant. The landowner may apply to the Lands Tribunal to have the covenant discharged or modified under s.84(1) Law of Property Act 1925. The Lands Tribunal may modify or discharge the restriction on any of the following grounds:
the covenant is obsolete;
it impedes some reasonable use of the land;
the parties with the benefit of the covenant have agreed, expressly or by implication, to discharge or modify the covenant; and
no injury will be caused to the beneficiaries as a result of the release or modification.
The case of Hotchkin v McDonald [2004] EG 100 (CS), has considered the relationship between the modification of a restrictive covenant to which a property was subject and the scope of a right of way which the property enjoyed.
Facts:
A property was subject to a restrictive covenant preventing its use for any purpose other than offices and ancillary use. The property had the benefit of a right of way over a drive (owned by Mr Hotchkin) for all purposes in connection with the use of the property in accordance with that covenant.
Buyers of the property wished to develop it, partly for use as holiday lettings and partly as a commercial health and fitness centre. They applied to the Lands Tribunal for the discharge or modification of the covenant to allow it to be used for these purposes.
Mr Hotchkin brought proceedings in which he argued that, even if the covenant were discharged or modified, the drive could no longer be used for access, since such use would be excessive and outside the scope of the right of way. The Lands Tribunal proceedings were stayed, pending a court decision on the correct construction of the easement. The case was heard by the High Court and, when it ruled against Mr Hotchkin, he appealed to the Court of Appeal.
Decision:
The Court of Appeal dismissed the appeal. The right of way was linked to the use of the property. Consequently, if the use of the property changed, the scope of the right of way should also change. If the Lands Tribunal were to decide to discharge or modify the covenant, the permitted use of the right of way should be altered to reflect the change of character of the property.
Comment:
The case shows the dangers of linking the scope of a right of way to a restrictive covenant. If the covenant is modified by the Lands Tribunal, the scope of the right of way might also change. In order to guard against this risk, the scope of the right of way should be set out expressly in the wording of the grant.
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