HL Deb 24 April 1969 vol 301 cc580-600

Powers of Lands Tribunal and court in relation to restrictive covenants affecting land

25.—(1) In section 84 of the Law of Property Act 1925—

  1. (a) for the words "The Authority herein after defined" in subsection (1), and for the words "the Authority" wherever else they occur, (which now refer to the Lands Tribunal) there shall be substituted the words "the Lands Tribunal"; and
  2. (b) there shall be made the further amendments provided for by subsections (2) to (6) below;

and accordingly section 84 shall have effect as it is set out in Schedule 2 to this Act with the amendments made by section 52(1) of the Landlord and Tenant Act 1954 and by this section (and the omission of repealed provisions), subject however to any other enactments affecting the operation of section 84 and to subsection (8) below.

(2) In section 84(1)(a) after the word "that" the second time it occurs, there shall be inserted the words "in a case falling within subsection (1A) below", for the words "the reasonable user" there shall be substituted the words "some reasonable user" and the words "without securing practical benefits to other persons" shall be omitted; and after section 84(1) there shall be inserted as new subsections (1A), (1B) and (1C):—

"(1A) Subsection (1)(a) above authorises the discharge or modification of a restriction by reference to its impeding some reasonable user of land in any case in which the Lands Tribunal is satisfied that the restriction, in impeding that user, either—

  1. (a) does not secure to persons entitled to the benefit of it any practical benefits of substantial value to them; or
  2. (b) is contrary to the public interest;
and that money will be an adequate compensation for the loss or disadvantage (if any) which any such person will suffer from the discharge or modification.

(1B) In determining whether a case is one falling within subsection (1A) above, and in determining whether (in any such case or otherwise) a restriction ought to be discharged or modified, the Lands Tribunal shall take into account the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the relevant areas, as well as the period at which and context in which the restriction was created or imposed and any other material circumstances.

(1C) It is hereby declared that the power conferred by this section to modify a restriction includes power to add such further provisions restricting the user of or the building on the land affected as appear to the Lands Tribunal to be reasonable with the relaxation of the existing provisions, and as may be accepted by the applicant; and the Lands Tribunal may accordingly refuse to modify a restriction without some such addition."

(3) In section 84(2), in the phrase "is affected" in paragraph (a), and in the phrase "is enforceable" in paragraph (b), there shall in each case be inserted after the word "is" the words "or would in any given event be"; and at the end of section 84(2) there shall be added the words:— Neither subsections (7) and (11) of this section nor, unless the contrary is expressed, any later enactment providing for this section not to apply to any restrictions shall affect the operation of this subsection or the operation for purposes of this subsection of any other provisions of this section.

(4) In section 84(3) in the phrase "any local authority" there shall be inserted after the word "any" the words "government department or".

(5) After section 84(3) there shall be inserted as a new subsection (3A):— (3A) On an application to the Lands Tribunal under this section the Lands Tribunal shall give any necessary directions as to the persons who are or are not to be admitted (as appearing to be entitled to the benefit of the restriction) to oppose the application, and no appeal shall lie against any such direction; hut rules under the Lands Tribunal Act 1949 shall make provision whereby. in cases in which there arises on such an application (whether or not in connection with the admission of persons to oppose) any such question as is referred to in subsection (2)(a) or (b) of this section, the proceedings on the application can and, if the rules so provide, shall be suspended to enable the decision of the court to be obtained on that question by an application under that subsection, or by means of a case stated by the Lands Tribunal, or otherwise, as may be provided by those rules or by rules of court.

(6) In section 84(11) after the word "nor" there shall be inserted the words "subject to subsection (11A) below"; and after section 84(11) there shall be inserted as a new subsection (11A):— (11A) Subsection (11) of this section—

  1. (a) shall exclude the application of this section to a restriction falling within subsection (11)(a), and not created or imposed in connection with the use of any land as an aerodrome, only so long as the restriction is enforceable by or on behalf of the Crown; and
  2. (b) shall exclude the application of this section to a restriction falling within subsection (11)(b), or created or imposed in 582 connection with the use of any land as an aerodrome, only so long as the restriction is enforceable by or on behalf of the Crown or any public or international authority."

(7) In section 38(3) of the Requisitioned Land and War Works Act 1945 (under which section 84 of the Law of Property Act 1925 does not apply to a covenant obtained under the Defence Acts, so long as the covenant is enforceable on behalf of the Crown) for the words "any covenant obtained under the Defence Acts" there shall be substituted the words "any restriction created or imposed under the Defence Acts or under section 13 (acquisition of land for oil installations) of the Land Powers (Defence) Act 1958", and for the words "the covenant" there shall be substituted the words " the restriction".

(8) This section applies to restrictions whether subsisting at the time it comes into force or created or imposed thereafter, but—

  1. (a) the coming into force of any provision of this section other than subsection (5) shall not affect proceedings then pending; and
  2. (b) subsection (5) shall not come into force until such date as the Lord Chancellor may appoint by order made by statutory instrument, which shall be laid before Parliament after being made."

The noble and learned Lord said This Amendment is a long one which raises an entirely new question on a new Part of the Bill, so I am afraid I shall have to trouble the Committee with a full explanation of it. It extends and clarifies the jurisdiction of the Lands Tribunal under Section 84 of the Law of Property Act 1925 to modify or discharge restrictive covenants and makes consequential and other minor amendments to Section 84. A new Schedule to be inserted in the Bill as Schedule 2 sets out Section 84 of the 1925 Act as amended by the new Clause 25. The Amendments to Clause 27 and the Title of the Bill are consequential on the clause. The new clause implements, with modifications, the recommendations on the powers of the Lands Tribunal contained in Propositions 9(a) and 11 of the Law Commission's Report on Restrictive Covenants (Law Com. No. 11), enlarges the powers of the court to issue declaratory judgments in accordance with a recommendation in Proposition 10(b) of the Report, and corrects certain anomalies and makes certain improvements in provisions of Section 84 which are not referred to in the Report.

The present law relating to restrictive covenants and its defects are summarised in paragraphs 7 to 26 of the Law Commission's Report. A restrictive covenant may be defined as an agreement made between neighbouring landowners which enables one of them to impose a specific restriction on the use of the other's land and is intended to remain in force between subsequent owners of the relevant land after the parties to the agreement have ceased to own their respective interests in it. Paragraph 15 outlines the jurisdiction conferred by Section 84 on the Lands Tribunal to discharge or modify restrictive covenants and on the High Court to make declarations as to their effect. Paragraphs 20 and 25 criticise the provisions of Section 84 relating to the Lands Tribunal as they have come to be construed, on the ground that they afford insufficient scope to the Tribunal to exercise its jurisdiction, and paragraph 26 suggests that the jurisdiction should be enlarged on the lines indicated in Proposition 9 of the Report.

Details of the current judicial interpretations of Section 84 are given in the notes to Proposition 9. Broadly, the power to modify or discharge can be exercised on four grounds:

  1. (i) that the restriction has become obsolete;
  2. (ii) that the continued existence of the restriction would impede the reasonable user of the land without conferring any practical benefits on any persons;
  3. (iii) that all concerned have agreed, and
  4. (iv) that the persons who benefit from the restrictions will not suffer any harm.
These grounds have been strictly interpreted, so that in practice it is rare for a restriction to be modified or discharged unless it is obsolete or of no value to the persons entitled to enjoy its benefit. In consequence, the development of land is often either frustrated by restrictive covenants or carried out in breach of them. Sometimes excessive sums have to be paid to obtain release from covenants which are reflected in inflated prices charged for the developed land when it comes to be sold.

Proposition 9 of the Law Commission Report recommends that the Lands Tribunal should have power to modify or discharge a restrictive covenant which is of value to those benefiting from it, if it impedes the reasonable use of the land so as to be contrary to the public interest and if money can be adequate compensation for the loss of its benefit. The Proposition also specifies various factors which the Lands Tribunal should consider when exercising its jurisdiction it should be empowered to direct inquiries to be made of Government Departments.

The Lands Tribunal is hampered in the exercise of its powers by uncertainty as to the extent to which it can decide questions of law. Proposition 11 of the Law Commission Report recommends that whilst substantive legal questions concerning the validity or Enforceability of covenants are to be determined by the court, the Lands Tribunal should be empowered (subject to a right of appeal to the court on points of law) to decide who is to be entitled to be a party to the proceedings in order to object to an application for modification or discharge.

The declaratory jurisdiction of the court, conferred by subsection (2) of Section 84, is of particular importance because, unlike other declaratory orders of the court, orders made under this provision are, by Section 84 (5) binding on everyone and do not bind merely the parties to the proceedings. They operate in rem. It is recommended in Proposition 10 (b) that the power to make such binding declarations should be exercisable in relation to the future effect of restrictive covenants.

Besides giving effect to these recommendations of the Law Commission the clause also corrects a few defects in the operation of Section 84 and its application. Obsolete terms or references are brought up to date only where this can be done by a simple substitution. The clause does not seek to achieve any modernisation or general amendment of a more far-reaching kind because that would involve rewriting language which has been the subject of much judicial interpretation and is familiar to the legal and surveyors' professions. An attempt has been made to do so, but it was not welcomed and has been dropped.

I ought to say a word about the new subsections. Subsection (1) substitutes "the Lands Tribunal" for "the Authority" throughout Section 84 and introduces the substantive Amendments contained in the clause. The subsection also provides that the amended Section 84 is to have effect as set out in Schedule 2 to the Bill. Paragraph (a) of the subsection substitutes" the Lands Tribunal "for" the Authority " throughout Section 84. Jurisdiction to modify or discharge covenants was in 1925 conferred on "The Authority", meaning the Official Arbitrators appointed for purposes of the Acquisition of Land (Assessment of Compensation) Act 1911. Their jurisdiction was transferred to the Lands Tribunal under the Lands Tribunal Act 1949. Paragraph (b) and the concluding words of the subsection are machinery designed to bring the Amendments to Section 84, and the new Schedule 2, into effect. The concluding words also preserve the effect of existing enactments affecting Section 84, notably enactments which exempt particular types of restriction wholly or partly from the operation of the section (for example, Section 19 (6) of the Land Commission Act 1967, Sections 5 (2) (b) of the Forestry Act 1967).

Subsection (2) substitutes the words "some reasonable user" for" the reasonable user" in the existing subsection (1)(a) of Section 84 and inserts three new subsections in the section: first, to widen the power of the Lands Tribunal to modify or discharge restrictive covenants; secondly, to specify certain factors which the Tribunal are to take into account in the exercise of these wider powers; and thirdly, to ensure that the Tribunal's power to modify restrictions includes the power to substitute other restrictions. The change of the wording of the existing subsection (1)(a) from" a reasonable user " to some reasonable user" will have a material effect. It will no longer be necessary for a person seeking to have a covenant discharged to show that the restriction impedes all reasonable use of the land, but only that some other use which is also reasonable will be impeded.

Where it is shown that some reasonable use would be impeded by a restriction, the new subsection (1A) of Section 84 provides additional grounds upon which the Lands Tribunal can discharge or modify that restriction. It may do so if the restriction is either not of substantial value or contrary to the public interest and if money would be adequate compensation for the loss of the benefit. The new subsection implements the recommendation in the first part of paragraph (a) of Proposition 9 in the Law Commission's Report. At present restrictions are rarely discharged under the second limb of Section 84(1)(a), partly because the paragraph is interpreted as requiring the Tribunal to be satisfied that the use proposed by the applicant for discharge or modification is the only reasonable use, and partly because it is also necessary to show that the covenant confers no practical benefit (in which case it will usually be obsolete or capable of discharge by agreement and so dischargeable under the remaining provisions of Section 84(1)). Under the new subsection (1A) the Tribunal is enabled to discharge or modify a restriction impeding reasonable user not only where it is of no value, or even of no substantial value, but also where it is of substantial value but its discharge would be in the public interest. The term " public interest "is not defined. It will be left to the Tribunal to hold the right balance between public and private interest where they conflict. In doing so the Tribunal is required to have regard to planning, considerations by the new subsection (1B).

The new subsection (1B) of Section 84 requires the Lands Tribunal, in determining whether a reasonable user is impeded and in the exercise of its powers under the new subsection (1A), to take into account a variety of factors, including planning policy as evidenced by the planning authority's development plan for the area and any known or published policy or directives for the grant or refusal of planning permissions. The subsection, which implements the recommendations in the second part of Proposition 9(a) of the Law Commission Report, is designed as a guide and not as a directive to the Tribunal which will be able to take other matters into consideration and give them such weight as it thinks appropriate.

The new subsection (1C) of Section 84 provides that the Tribunal's power to modify a restriction includes a power to substitute other restrictions as a condition of the modification. The subsection is inserted at the request of the Lands Tribunal to resolve a doubt whether the Tribunal's powers include a power of substitution. The imposition of an alternative restriction is often essential to do justice between the parties, as where a restriction of user for residential purposes only is replaced by use for non-industrial purposes thus letting in business but not factory use. The subsection does not authorise the imposition of positive obligations (like an obligation to screen off new buildings) but will not prejudice the practice of the Lands Tribunal to impose such positive obligations in appropriate cases. Doubts on the validity of such obligations cannot be resolved until the enforceability of positive covenants has been regulated by Statute.

Subsection (3) makes two changes in Section 84(2). First, it enables the court to make a declaration as to whether in the event of specified happenings land would be affected by a restriction or the restriction would be enforceable and, if so, by whom. Secondly, the subsection provides that subsections (7) and (11) of Section 84 (which exempt certain restrictions from the operation of the section) and any provisions in other Acts which disapply the section shall not exempt the restrictions to which they relate from the declaratory jurisdiction of the court under Section 84(2).

In empowering the court to make declarations regarding future situations, the subsection implements the recommendation to that effect in Proposition 10(b) of the Report. By virtue of Section 84(5), such declarations will be binding on all persons, whether parties to the proceedings or not. The Amendment will assist developers who want to know in advance of proposed development what restrictions may be enforceable against them. In extending the jurisdiction of the court under Section 84(2) to cover restrictions exempt from the section, subsection (3) corrects an apparent anomaly. It cannot have been intended to exempt the relevant restrictions not merely from the jurisdiction of the Lands Tribunal to modify or discharge them but also from the jurisdiction of the court to make binding declarations as to their validity or enforceability.

Subsection (4) enables the Lands Tribunal, in exercising its jurisdiction under Section 84, to direct inquiries to be made of Government Departments. The subsection implements the third paragraph of Proposition 9(a) of the Report. Though expressed in general terms, the Amendment is designed to complement the Tri- bunal's existing power to direct inquiries of local authorities and is primarily aimed at eliciting information concerning planning circulars or directives issued by the Ministry of Housing and Local Government.

Subsection (5), which introduces a new subsection (3A) to Section 84, requires the Lands Tribunal to give directions as to the persons who may oppose an application for modification or discharge. Such a direction is not to be appealable, but where the direction involves taking a view on any legal issue on which the court has jurisdiction under Section 84(2), the new subsection (3A) enables the proceedings to be suspended, in accordance with rules for that purpose, in order that the court's decision may be obtained. The subsection implements Proposition 11 of the Report with certain modifications and is designed both to preserve the existing jurisdiction of the court to determine issues of law and at the same time to ensure that the Lands Tribunal can for practical purposes decide who are to be parties to the proceedings before them without trespassing on the court's jurisdiction.

The subsection aims to dispel the doubts raised by the decision of the Court of Appeal in Re Purkiss' Application [1962] I.W.L.R. 902, as to the extent to which the Lands Tribunal can decide who is entitled to oppose an application, where that question involves, as it often will, a decision as to the validity of a restriction or who is entitled to the benefit of the restriction. The subsection expressly enables the Tribunal to decide who may oppose an application, but requires rules to be made for the proceedings to be suspended, with a view to obtaining the determination by the court of any questions of law underlying the Tribunal's decision. By leaving rules to govern the detailed provisions, both on the circumstances in which proceedings are to be adjourned and on the method of reference of legal points to the court, the subsection provides a flexible machinery. It is intended that Lands Tribunal Rules will require the Tribunal to refer legal issues to the court whenever a party so requests and will give the Tribunal a discretion to do so of its own motion.

Subsection (6) amends subsection (11) of Section 84 which sets out restrictions in favour of the Crown which are exempt from the Lands Tribunal's jurisdiction. The subsection limits the duration of exemptions accorded to restrictions imposed for the benefit of the Armed Forces or for certain civil aviation purposes. By virtue of paragraph (a) of a new subsection (11A) to be inserted in Section 84, restrictions (not affecting aerodromes) imposed for the benefit of any of the Armed Forces are to be exempt only so long as the restriction remains enforceable by the Crown; by virtue of paragraph (b) of the new subsection (11A) restrictions affecting aerodromes or imposed for civil aviation purposes are to be exempt only so long as the restrictions remain enforceable either by the Crown or by any public or international authority.

The subsection corrects an anomaly inherent in Section 84(11) whereby restrictions created or imposed for defence or civil aviation remain exempt even when those purposes are no longer applicable: for example. because the benefited land has been sold to a private individual for residential or agricultural purposes. Section 84(11) is brought into conformity with Section 38(3) of the Requisitioned Land and War Works Act 1945 (itself amended by subsection (7) of the clause) which exempts from the operation of Section 84 covenants obtained under the Defence Acts so long as the covenant is enforceable by a Minister against the persons for the time being entitled to the land adversely affected thereby.

The provision made in paragraph (b) of the new subsection (11A) for restrictions affecting aerodromes or imposed for civil aviation purposes ensures that these remain exempt so long as they are enforceable either by the Crown or by a public or international authority. This provision covers the cases in which, for instance, a military aerodrome is sold to a local authority for use as a civil aerodrome, a civil aerodrome is sold to the Ministry of Defence, or air traffic control installations are transferred to an international organisation. In such cases the restrictions remain exempt notwithstanding the failure of the precise purpose for which they were imposed.

The subsection does not amend references to the Commissioners of Works and the Air Navigation Act 1920 in Section 84(11) despite the fact that they are obsolete. The Commissioners' functions are now exercisable by the Minister of Public Building and Works and the Air Navigation Act 1920 has been superseded by the Civil Aviation Acts 1949–1968. The reference to the Commissioners is retained because most, if not all, of the restrictions imposed for the protect ion of Royal Parks and Gardens under statutory powers were in fact imposed by the Commissioners, so that reference to them is necessary in any event and under the rules of interpretation they will be taken to include reference to their successors. The reference to the Air Navigation Act 1920 is retained because many existing restrictions were imposed under that Act and because the pro visions authorising these restrictions are not exactly reproduced in the current legislation, so that a simple substitutional amendment is not possible without the risk of including inappropriate restrictions. The possibility of a more elaborate up-to-date reference to current legislative provisions is, however, still being considered by the Departments concerned.

Subsection (7) amends Section 38(3) of the Requisitioned Land and War Works Act 1945, whereby covenants obtained under the Defence Acts are exempt from Section 84. The amendment substitutes for any covenant obtained under the Defence Acts" the words "any restriction created or imposed under the Defence Acts or under Section 13 of the Land Powers (Defence) Act 1958" and makes a consequential change.

The amendments serve a dual purpose. First, restrictions imposed in connection with the acquisition of land by the Minister of Power for oil installations under powers conferred by Section 13 of the Land Powers (Defence) Act 1958, are brought within the exemption. Section 13 enables the Minister of Power to acquire, (i), land for the construction of oil installations necessary for the defence of the realm; (ii), land on which there are oil installations which were Government war works; and (iii), any right restrictive of the user of land essential to the enjoyment of the land acquired under the section. The last-mentioned rights may be acquired by agreement, but they are closely akin to restrictions acquired under the Defence Acts, and subsection (7) accordingly brings them within the ambit of the exemptions conferred by Section 38(3) of the Requisitioned Land and War Works Act 1945. Secondly, the amendment, by referring to "restrictions" instead of "covenants ", is intended to silence any possible argument that restrictions created by methods other than contracts under seal (like informal contracts or deeds poll) are not exempt.

Subsection (8) provides that the provisions of new Clause 25 are to apply to all restrictions within the ambit of Section 84, whether created before or after the clause comes into effect. Pending proceedings are not to be affected except by the procedural provisions of subsection (5), which is to come into effect on a date appointed by the Lord Chancellor. The remaining provisions of the clause will come into effect three months after the Bill becomes law, in accordance with Clause 27(2). In providing that new Clause 25 is to apply to restrictions created before the clause comes into force, subsection (8) follows recommendations in Propositions 9(a) and 11(d) of the Law Commission's Report. An "appointed day" provision is needed for subsection (5), to ensure that adequate time is available for the drafting of the rules of procedure required under that subsection. The subsection follows standard practice in not permitting substantive changes of the law to affect pending proceedings, but the procedural provisions of subsection (5) are to be applied to such proceedings as soon as they come into effect.

I know that many of your Lordships have been anxious to see legislation of this kind for some time, and I am glad that the opportunity has been afforded in the course of this Bill. I apologise to the Committee for having been so long in introducing this new clause, but I know that very often a full explanation given at the time, and which is on record, may save Amendments which are really designed to elicit what is behind the clause. So I thought that in the end it might save time if I made a full statement in moving this Amendment. I beg to move.

4.41 p.m.

VISCOUNT COLVILLE OF CULROSS

There may be other noble and learned Lords who would like to speak on this subject, but perhaps I may say a few words first. I am sure that the noble and learned Lord the Lord Chancellor is quite right in having given to the Committee a full explanation of this new clause. A great deal of what he said does not appear in the Law Commission's Report; indeed, some of the material is altogether new. I should be surprised if any great dispute arose on subsections (6), (7) or (8) of the new clause that he is proposing, but I would say a few words about the earlier parts. Perhaps the easiest thing to do is to look at the noble and learned Lord's Keeling Schedule, and deal with the bits that are printed in heavy type.

The Committee will know that there are really two forums before which these matters of restrictive covenants are dealt with: the Lands Tribunal and the Chancery Division. I must say that I am always much too frightened to go to the latter, though I sometimes go to the former. The role that they each play is quite different, and is retained as quite different in this new modification of the law. The first thing that occurs is the widening of the power of the Lands Tribunal. I heard what the noble and learned Lord said about putting right the drafting of Section 84 itself. I do not know who it was that he asked, but had he asked some of those who perhaps go more frequently to the Lands Tribunal than to the Chancery Division I think he would have found that the words in the proviso to Section 84(1) about compensation are not perhaps so straightforward or so well understood as he may have been told by some others.

No doubt he has thought of those who practise there, but the truth of the matter is that, apart from some very exceptional cases indeed, it is now so well known that under the present law the Lands Tribunal does not give compensation at all, because it can only modify the covenants if they are of no use to anybody and therefore, of course, no question of compensation arises, that nobody in recent years has ever bothered to look at all at the words relating to compensation, or so I venture to suggest. Now it is going to become extremely difficult, because an entirely different situation will arise whereby, although the Lands Tribunal can examine the value of covenants, it will have a different jurisdiction to override them, among other things, in the public interest; and for that it is going to be able to pay compensation in suitable cases.

The new subsection (1A) says that "Subsection (1)(a) above authorises the discharge" in certain circumstances," and that money will be an adequate compensation". Is the noble and learned Lord sure that the provisions about compensation in the proviso to subsection (1) are really clear? They are tied up with all sorts of restrictions and difficulties, and, if we are going to have an entirely new system whereby a much greater field is being taken into account by the Lands Tribunal, I should have thought that we ought to make quite sure that the rules as to the availability of compensation are not too closely bound to terms which were useful only in relation to the older and much more restricted form of jurisdiction. There is no new provision in the proposals in this new clause which increases the discretion of the Lands Tribunal about the things that it can take into account when assessing compensation and that sort of thing, and I should have thought that this ought to have been looked at again because the whole thing has been in a state of desuetude for a very long time.

The second point which I should like to raise comes under the new subsection (1B). As I have always understood the situation in the past, one of the things that the Lands Tribunal has made quite clear is that it does not very much matter what the local planning authority has said about the use of the land in granting planning permission: the Lands Tribunal is going to look at the question in the light of the situation arising under the covenant. You can go there and tell them to your heart's content that you have planning permission for a block of flats 563 feet high, but they will not modify a covenant which says that the land shall not be occupied by more than one house unless they do so within the terms of the covenant and in the context in which the covenant was imposed.

All that goes. The new subsection (1B) is a major change which allows them to take into account, for the first time, the development plan, and, indeed, a pattern of individual permissions that have been given. This is immensely important on questions like density—" How many houses should there be on this site although there is a covenant which says that there shall only be two?", or" How many flats?" and questions of that sort. I think there is a danger here—I may be wrong but I put this forward for consideration—that one is going a little too far. if the Lands Tribunal is allowed to say that the covenant can be discharged because it is contrary to the public interest, and it then looks at an actual planning permission that has been given for a site which is in conformity with a development plan which says that when the area is re-developed the density shall be 140 persons to the acre and sees that there has been one other planning permission for an individual curtilage to be redeveloped in this way, it may well be that we shall swing too far the other way. We shall cease to take account at all of the character of the area which the covenant sought to set up.

People have bought their houses in this area—not only the people next door; it may be people from outside who are not enabled to benefit from the specific covenant. Perhaps their land was sold at slightly the wrong time before the covenant was first imposed. Nevertheless, they are, I think, sometimes entitled to a little of the consideration in the public interest as well. There are peon le who have gone there because it is an area of low density development I am basing this to a certain extent on the sort of case that I have met, but it is applicable in other spheres as well—and it may well be that the Lands Tribunal, in view of the words of this Amendment, will start to think that it is no longer at all important to take into account the context of the covenant. The only thing it has to do instead is to see whether or not it approves of the view taken by the local planning authority. I should not think that this is what the noble and learned Lord and those who advised him really want.

Probably what is wanted is a mixture of the two concepts. Do not rule out the local planning authority's view—let us give that its proper role in the consideration—but, equally, do not let us go overboard on it. Let us also take account of what the covenant could have been intended to achieve and what, indeed, it may have achieved in preventing redevelopment over a rather long period of time. I should like to see a balance of that sort, which may not occur in the administration of this particular phraseology.

I have no comment to make about subsection (1C), particularly having heard that it is put in at the request of the Lands Tribunal itself. It seems to me entirely sensible. The last point which I should like to raise is on the new subsection (3A). There has been no doubt at all that since the decision of the Court of Appeal in the Purkiss case, what has happened in the Lands Tribunal is that those who wished to apply for the modification or removal of restrictive covenants have been told that, for the purposes of that hearing in the Lands Tribunal—not necessarily anywhere else —they have simply got to accept that everybody who turns up to object is entitled to the benefit of the covenant. Sometimes, of course, they win, and sometimes they do not. But at least there is one thing that is quite clear at the moment: nobody spends any time at all in the Lands Tribunal going into questions of whether or not land is benefited, whether or not the covenant has been annexed, whether or not there is a building scheme, whether or not the people have bought with an express assignment of the covenant, and all the highly technical matters of that sort which the Court of Appeal have said ought to be dealt with by the Chancery Division and which always are dealt with by the Chancery Division.

I am a little afraid that when the new procedure which is adumbrated here comes into force—and it will of course be extended when the Lands Tribunal Rules and the Rules of the Supreme Court are produced—the Lands Tribunal may in fact spend a great deal of time on these preliminary points, which will in the end have to go to the Chancery Division anyway under the case stated procedure. I think it is a little unfair on the Lands Tribunal, but the Court of Appeal indicated in the Purkiss case that perhaps the people to deal with these technical points of covenant law were the High Court of Justice, and not some of the members of the Lands Tribunal. I do not know whether or not that is justified: I am sure that they would deal with it extraordinarily well.

The fact of the matter is that I feel that this matter may have to be gone over twice, because people will not accept what the Lands Tribunal have said, and they will want a case stated to go to the Chancery Division under the adjournment procedure in Section 3A. That will be a waste of time. One has to balance this against the question of whether or not the present system, which accepts everybody who turns up as being a proper objector and entitled to the benefit of the covenant, prevents covenants being revoked or modified when they otherwise would be. Does the presence and the objection of those persons, whether or not they are entitled, in fact stop the proper use of land? I just do not know. I do not know in how many cases the balance has turned on what has been said by an objector who if one had sorted the thing out beforehand one would have discovered had no right whatever to be there. I think that is really the point. If one is going to find that a great deal more time is going to be spent on this without any substantive difference in the answer, except in so far as the powers are changed, then I wonder whether this is a good thing to do.

I simply put this point forward, but I should very much like to consider it further. I have to some extent, but I think it is something which ought to be discussed. I should like to go on discussing it, but since this is really a Second Reading debate I do not propose to go into any further detail at this particular juncture. However, I think it is something which ought to be returned to, and that we ought to consider again at the next stage of the Bill; and I hope the noble and learned Lord will not mind if I put down some Amendments on this in due course.

4.54 p.m.

LORD WILBERFORCE

I shall endeavour to keep my observations on this Amendment shorter than the Amendment itself, but there are one or two things I should like to say about it. The noble and learned Lord the Lord Chancellor, in introducing the Amendment, referred to the fact that at a previous stage it had been sought to deal with this matter by means of a comprehensive new provision which would start again and clean the whole thing up. One must agree—and I think the noble and learned Lord probably agrees—that as a matter of technique, that would be a very much better way of dealing with this section than that which has been found possible, because we are here dealing with a fairly old provision into which a number of new enactments are being poured; and I certainly share some of the doubts expressed by the noble Viscount who has just spoken whether the old bottle will really hold this new vintage which has been put into it.

However, one must agree, having seen, as I had an opportunity of seeing, the earlier draft, that as a matter of substance what is here suggested is very much better and more practical than what was contained in the earlier proposition, and I would certainly give my recognition to the extent to which the noble and learned Lord has consulted expert opinion in Lincoln's Inn and elsewhere, and has, I think, obtained their substantial agreement to what is in this Amendment. So with some reluctance, which I would imagine is probably shared by those advising the noble and learned Lord, I would be prepared to accept the way in which this has been done; namely, by taking the structure of the existing section and doing the best one can with it.

I have one or two observations on the provisions which are now inserted into it. First of all, subsection (1A). I am using, as the noble Viscount did, the Keeling Schedule, which we have so conveniently got. As a matter of drafting, I wonder whether it would not be preferable to divide that into two, because, as the noble and learned Lord the Lord Chancellor pointed out, there are really four cases in which restrictive covenants can be modified, not three. Paragraph (a) is really separable into two quite separate cases. One is where it is obsolete, and the other is where some reasonable user is impeded. The case for doing that becomes very much greater now that one has the new subsections (1A) and (1B), which deal with the second limb of Section 84(1)(a), and not with the first, and therefore as a matter of convenience, I should have thought it would be much more easily understood if the second limb of (1)(a) were made into a separate provision. However, that is only a matter of presentation, although I would suggest possibly not an unimportant one.

More significant, perhaps, is to be sure that we understand the extent to which the Amendments to the second limb of (1)(a) together with the new subsection (1A), really go. The noble Viscount pointed out some of the changes, but they really are very radical. The existing power to modify restrictive covenants under the second limb was limited to the case where "the reasonable user " of the land would he impeded without securing substantial benefit. That has been replaced by "some reasonable user", any reasonable user, which is very much wider; and, as regards the benefit to the owner,. it now has to be "benefits of substantial value", which one gets from (1A)(a). In addition to that, as pointed out under the new subsection (1B), the Lands Tribunal is given very wide powers to take into account the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions …". I think one has to face the fact drat this makes such a substantial inroad into existing restrictive covenants that the whole nature of them is really changed to the detriment of the persons now entitled to the benefit of them, and I do not think it is very easy to see that from the way in which this is presented. When one looks simply at Section 84(1)(a) or the first Amendment, it does not look as if very much amendment is being made, but when you add it all up one sees how very substantial the inroad into this particular kind of right is.

Coming to (1C), I should like make two points. I quite agree with the thought behind it, that if you are modifying restrictions or taking them away it may be a good idea to give power to put some new restriction on. But I have doubts as to whether the machinery as suggested here is sufficient to do the work. When one is modifying a covenant or removing it, there is subsection (5) of this section, which goes on to say what the effects of the discharging or modifying or dealing with a restriction is, and says it is binding on all sorts of persons, whether they are parties to the proceedings or not. But I do not find anything comparable, which does the same thing, in relation to a new restriction on user or on building on the land affected which is introduced by the Lands Tribunal under (1C), and I should have thought that it would be desirable to add something which spells out what the effect on the owner of the land and on the persons entitled to the benefit is to be if such a new covenant is introduced. It is quite easy to say that it shall take effect as a new restrictive covenant which is binding on all persons, and so on, perhaps capable of registration as such. But it seems to me that at the moment it is left in the air under (1C).

As to the drafting of (1C), I must say that I find the language in the fourth line of that subsection a little curious. It reads: …as appear to the Lands Tribunal to be reasonable with the relaxation of the existing provisions, … I suppose that what is meant is "to be reasonable having regard to the relaxation of the existing provisions " or "… as compared with the relaxation". But I should not have thought that "to be reasonable with the relaxation" was tight enough. I suggest that the noble and learned Lord might look at that again.

I have no comment on the rest of the clause. It goes rather far; its presentation is not ideal; but the subject is an important one, and I think the noble and learned Lord was right to introduce it, even at this late stage. But I would join in commending to him reconsideration of it in one or two respects both in substance and in drafting.

THE LORD CHANCELLOR

I am grateful to the noble and learned Lord and to the noble Viscount for the consideration they have given to this clause. I will take into account the three points that the noble Viscount made: first, on compensation and the proviso; secondly, whether the new subsection (1B) leaves things too open to the Lands Tribunal; and, thirdly, how far the new subsection (3A) may lead to people going over everything twice. As the noble and learned Lord, Lord Wilberforce, knows, I should have preferred to introduce something on a larger scale dealing with the whole of positive covenants or land obligations. As he also knows, an attempt was made to do so; but unfortunately it foundered. And difficulties are being experienced on the second attempt, even by the chief draftsman himself. It is no doubt a very difficult subject. But I will carefully take into account all the observations which the noble and learned Lord, Lord Wilberforce, was good enough to make with a view to seeing whether or not Amendments should be made at a later stage.

On Question, Amendment agreed to.

Clauses 25 and 26 agreed to.

Clause 27 [Short title, commencement and extent]:

THE LORD CHANCELLOR

This Amendment is purely consequential; but there is an error in the printing of the Marshalled List. It is intended to except only subsection (5) of the new clause. I should have thought that the (5) would have come after the word "section". But I am told that it should read " Powers of Lands Tribunal Court in relation to restrictive covenants affecting land) (5) " I beg to move.

Amendment moved— Page 15, line 25, after ("Act") insert ("except section (Powers of Lands Tribunal and Court in relation to restrictive convenants affecting land)") (5). —(The Lord Chancellor.)

On Question, Amendment agreed to.

Clause 27, as amended, agreed to.

Schedule I agreed to.

TIIE LORD CHANCELLOR

I beg to move Amendment No. 10, which is simply the Keeling Schedule reprinting Section 84 as amended

Amendment moved—

After the Schedule insert the following new Schedule:

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