Upper Tribunal backs bid by parish council for modification of covenant on gifted land

Deputy chamber president Martin Rodger KC said in his ruling that although the covenant limiting the building’s use to a doctor’s surgery had not become obsolete, it should still be lifted because it impeded its use for ancillary medical or health services, while conferring no practical benefits on those entitled to enforce it.

“Those are precisely the circumstances in which Parliament intended the tribunal to have the power to discharge or modify a restriction,” Mr Rodger said.

Neighbours Winifred and John Preston both objected to Newton Poppleford and Harpford Parish Council’s bid to lift the restriction.

In 1983 local builder George Compton donated land to the council for the surgery.

It functioned as such until 2022, after which no doctor could be found to take it over.

The council therefore wanted it used for other medical purposes such as audiology or chiropody, but the covenant did not permit use other than by a doctor.

Mr Preston spoke on behalf of himself and his mother and the Upper Tribunal also heard from their lay representative, Mr Robert Compton, wo is one of the sons of the original donor.

Mr Rodger said: "Along with three other members of his family he filed an objection of his own to the application but neither he nor the other members of the Compton family were admitted by the Tribunal as parties to the proceedings because, unlike the Prestons, they own no land which has the benefit of the covenant. Nevertheless, the Compton family members would like the surgery to be returned to them if it can no longer be used for its original intended purpose."

Mr Rodger said he was asked to exercise the tribunal’s power under section 84(1), Law of Property Act 1925, to permit use for other medical purposes.

Mr Rodger said it was clear that George Compton had made a disposition for a public purpose and he therefore had to decide whether the transfer was made "gratuitously or for a nominal consideration".

If so, the tribunal had no power to vary the covenant. The council argued it was not gratuitous as it had made commitments and provided benefits in return for the land.

Mr Rodger said the council’s case on this point had “included elements which could not conceivably convert a gratuitous disposition into one made for more than nominal consideration”.

He explained: “Whether the promises made by the parish council were of benefit to Mr Compton is irrelevant when considering whether the transfer was gratuitous.

“It is not the receipt of a benefit by one party to a transaction which prevents it from being gratuitous, it is the fact that the other party incurs a cost or assumes a liability or obligation which enables them to say that they have given something in return for what they have received. If a seller transfers land to a buyer in return for a donation to the seller's favourite charity, the transfer is not gratuitous although the seller does not benefit from the transaction.”

He found the council entered into significant obligations when it received the land and so the transaction was not gratuitous.

The lack of interest from other donors in taking over the surgery did not in itself render the covenant obsolete, Mr Rodger said, but he found the restriction prevented other medical uses for no practical benefit to anyone and so should be modified.

Mr Rodger said a revised restriction should read: ”Not at any time to carry on or permit to be carried on upon the land hereby transferred any trade or business whatsoever or to use any building erected or to be erected upon the land hereby transferred or permit the same to be used for any purpose other than as a Doctors Surgery or for any other medical or health service".

Mark Smulian