All England Tennis Club served an ace after council grants planning permission

You may have seen the news reports about the All England Lawn Tennis Club receiving a boost to its plans to develop 67 hectares of land located between Wimbledon and Wandsworth, after Merton London Borough Council reportedly granted planning permission for the development. This was despite the land being subject to restrictive covenants, reportedly enforceable by the Council, which ought to prevent the same development.

What was the nature of the covenants?

It is understood that the covenants, granted in 1993 when the Council sold the land in question to the Club, sought to prevent any future major development of the land.

Up to now the covenants have not been an issue as the land has been kept as open space and used by Wimbledon Park Golf Club under a lease granted by the Club.

However, following the Club’s decision to buyout Wimbledon Park Golf Club’s lease in 2018 for circa £65 million, and extinguish the lease, the Club has announced its plans to develop the area with a £100 million Show Court, potentially in contravention of the restrictive covenants.

Why did the Council grant planning permission given the restriction on development?

It is important to remember that, in law, a restrictive covenant is rarely a material planning consideration in a planning application assessment.  In this respect, council planners are required to assess an application for planning in accordance with national and local planning policy and legislation.  Restrictive covenants are a separate matter, albeit in this instance there is a coincidence of the Council also having the potential ability to enforce the restrictive covenants to stop the development.

But will the granting of planning permission have the effect of waiving the restrictive covenants?

No, the granting of planning permission will not in itself mean that the Council is no longer entitled to benefit from the restrictive covenants in place, providing the Council still benefits from the covenants of course (i.e. the benefit has not passed to others on the sale of Council land in the area for instance).

However, whilst the existence of a restrictive covenant is unlikely to be material to the  consideration of a planning application, the granting of planning permission is an important factor to be considered when assessing whether the restrictive covenants ought to remain enforceable or whether they might be liable for discharge or modification pursuant to s.84 of the Law of Property Act 1925.

Under s.84 of the Law of Property Act 1925, a covenant over freehold land may be modified or discharged where:

• the covenant is obsolete;
• the covenant impedes some reasonable use of the land;
• the beneficiary expressly or impliedly agreed to the modification or discharge; and
• no injury will be caused by the modification or discharge.

There are additional rules that apply where modification or discharge is considered over leasehold land.

The Court of Appeal has previously considered the situation where a Council’s planning department granted planning permission for a development before the Council later sought to enforce a restrictive covenant in order to prevent the same development from going ahead (Graham v Easington District Council  [2008] EWCA Civ 1503). In doing so the Court of Appeal held that, notwithstanding that the Council had already granted planning permission “the grant of planning permission by [an] authority is a relevant factor but it is not a determinative factor” when considering the enforceability of restrictive covenants.

What does this mean for the proposed development?

The effect of the above is that, regardless of the granting of planning permission for the development, the Club may still face difficulty in proceeding with its development plans if they breach the terms of the covenants.

Consequently, unless the Council (and/or any other party benefitting from the restrictive covenants) decided to release the restrictions imposed under the covenants, the options open to the Club would be to first consider whether they could argue that the development does not actually breach any of the covenants or look to apply to the Upper Tribunal to modify or discharge the covenants.  In doing so, the Club would likely look to argue that the granting of planning permission is a factor that ought to be taken into account in support of the discharge of the covenant.

If you have any queries in relation to covenants affecting you or your property, wish to make an application to modify or discharge a restrictive covenant, or wish to discuss any other aspect of property litigation or planning law, please get in touch with Sharon Mathieson or Kamran Hyder.