UPPER TRIBUNAL (LANDS CHAMBER)

	
UT Neutral citation number: [2010] UKUT 325 (LC)
	UTLC Case Number: LP/44/2009

	TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007
	
RESTRICTIVE COVENANT – preliminary issues – 2 previous unsuccessful applications – National Trust objecting – whether application should be struck out – held it should not be – compensation – whether ground (aa) should be struck out on basis that money would not be adequate compensation – held it should not be – Law of Property Act 1925 s 84(1)(aa) and (c)

	IN THE MATTER OF AN APPLICATION UNDER SECTION 84 OF THE 
LAW OF PROPERTY ACT 1925

BY

	THAMES VALLEY HOLDINGS LIMITED	

	
	Re:	Land at Ockwells Road
	Cox Green
	Maidenhead
	Berkshire

	
	Before: The President

	Sitting at: 43-45 Bedford Square
	London WC2A 3AS
	on 27 April 2011

Michael Barnes QC and Eian Caws instructed by Watson Farley Williams for the applicant
John McGhee QC instructed by Burges Salmon solicitors of Bristol for the objector

The following cases are referred to in this decision:

Re Bovis Homes Southern Ltd (LP/21/1979, 20 February 1981, unreported)
Re Thames Valley Holdings Ltd (LP/12/1991, 26 October 1992, unreported)
Gee v National Trust [1966] 1 WLR 170
Re Martin (1987) 53 P & CR 146); (1988) 57 P & CR 119
Re Houdret and Co Ltd (1989) 58 P & CR 310
Re Towner (1989) 58 P & CR 316
Re Whiting (1989) 58 P & CR 321
Re Quartley (1989) 58 P & CR 518
Re Hopcraft (1993) 66 P & CR
Re Bewick (1997) 73 P & CR 240
Re Willis (1997) 76 P & CR 97
Re Zenios [2010] UKUT 260 (LC) 
Stockport Metropolitan Borough Council v Alwiyah Developments (1986) 52 P & CR, 278

The following further cases were referred to in argument:

Barras v Aberdeen Steam Trawling and Fishing Co Ltd [1933] AC 402
Dexter v Vlieland-Boddy [2003] EWCA Civ 14
Fletcher Estates (Harlescott) Ltd v Secretary of State for the Environment [2000] 2 AC 307
Henderson v Henderson (1843) 3 Hare 100
Johnson v Gore Wood & Co (No 1) [2002] 2 AC 1
Re Beecham Group Ltd (1981) 41 P & CR 369
Slack v Leeds Industrial Cooperative Society Ltd No 1 [1923] 1 Ch 431
Transport for London v Spirerose Ltd [2009] 1 WLR 1797
R v Warner (1664) 1 Keble 67
Quinn v Leatham [1901] AC 774
Pretoria City Council v Levinson [1949] (3) SA 305
Behrends v Bertram Mills Circus [1957] 2 QB 1
West Midlands Baptist (Trust) Assoc (Inc) v Birmingham Corpn [1968] 2 QB 188
Baker v The Queen [1975] AC 774
Robinson v Harman (1848) 1 Exch 850
IRC v Glasgow and South-Western Rly Co (1887) 12 App Cas 315
Spicer v Martin (1888) 14 App Cas 12
Elliston v Reacher [1908] 2 Ch 274
Wrotham Park Estates Co Ltd v Parkside Homes Ltd [1974] 1 WLR 793
Re Vertical Properties Ltd [2010] UKUT 51

DECISION ON PRELIMINARY ISSUES
1.	The land which is the subject of this application is an area of 22.6 acres on the southern edge of Maidenhead.  The applicant is the freehold owner and wishes to develop the land for housing.  The land lies immediately to the north of a road called Ockwells Road (previously called Ockwells Lane).  Immediately to the south of Ockwells Road there stands within its own grounds Ockwells Manor, a richly decorated half-timbered house of the 15th century.  It is a Grade I listed building in private ownership.  The National Trust has the benefit of restrictive covenants that would prevent the development of the land without its consent, and the application, under section 84 of the Law of Property Act 1925, seeks the modification of the restrictions on grounds (aa) and (c) of section 84(1) to enable housing development to be carried out.  The National Trust objects to the application.
2.	On two previous occasions section 84 applications have been made for the same purpose.  Each of these was refused.  In the light of these previous refusals the Trust now seeks to have the present application struck out as an abuse of process.  Further or alternatively it seeks to have struck out from the application ground (aa).  It is a requirement of ground (aa) that money should be adequate compensation for any loss or disadvantage suffered as a result of the modification by the person having the benefit of the restriction.  The Trust says that the loss or disadvantage that would be suffered, to the protected setting of Ockwells Manor, would be one suffered by the public interest.  It says that money cannot be adequate compensation where the loss or disadvantage is to the public interest and that ground (aa) is accordingly not capable of being established.  There are thus two issues to be determined, and I will consider them in turn.  Before I do so I should say a little more about the restrictions themselves and the locality.
3.	The restrictions were imposed by a deed dated 31 December 1945 between Sir Edward Barry Bt, then the owner of Ockwells Manor and the land surrounding it, and the Trust.  The deed was made pursuant to section 8 of the National Trust Act 1937, which enables the Trust to enforce the covenants against persons deriving title under the covenantor as if the Trust were interested in adjacent land and as if the covenant had been expressed to be entered into for the benefit of that land.  The land made subject to the restrictions (“the restricted land”) was Ockwells Manor itself and 260 acres of land surrounding it.  Specific restrictions related to the house and other buildings.  Other restrictions applied to the remainder of the restricted land.  They included the following covenants:
“1. No act or thing shall be done or placed or permitted to remain upon the land which shall prejudice affect or destroy the natural aspect and condition of the land.
3. No building shall without the written consent of the National Trust at any time be erected or allowed to remain on any part of the land.”
For the National Trust Mr John McGhee QC accepts that the first restriction is unenforceable, but this is of no moment for present purposes since restriction 3 alone is sufficient to prevent the development that the applicant wishes to carry out.
4.	By a further deed of covenant made in 1947 between the same parties as the 1945 deed the same restrictions were applied to a further area of land.  In 1962 a deed of variation was entered into between the Trust and the then owner of the land burdened by the 1945 and 1947 covenants, Mr Broadhead.  This provided for the release from the restrictions of part of the restricted land.  
5.	The applicant is the freehold owner of the application land as successor in title of the covenantor.  The land is roughly rectangular in area and is bounded on the south by Ockwells Road and on the other three sides by residential development.  The land to the west was developed under an outline planning permission granted on appeal in 1973.  The permission included the application land, and reserved matters relating to the application land were approved in 1979.  They covered the construction of 120 houses, a condition of the permission having stated that the layout should provide for low density housing in the vicinity of Ockwells Manor.  Because the permission was implemented on the land to the west it remains extant, and the development approved in 1979 could now be carried out.  The applicants, however, hope to develop the application land at a much greater density, and they would apply for a new planning permission for this purpose.
6.	In 1986 a belt of trees was planted along the Ockwells Road frontage of the application land.  It extends to a depth that varies from about 25 to 55 metres.  Ockwells Manor is set back from Ockwells Road on the south side, and the land to the east, west and south of its curtilage is undeveloped. All the land to the south of Ockwells Road is in the Green Belt.
7.	In 1979 Bovis Homes Southern Limited, then the owners of the application land, applied to the Lands Tribunal under section 84 for the restrictions to be modified so as to enable the land to be developed in accordance with the 1973 permission and the 1979 approval of details.  The National Trust objected to the application.  The applicant relied on grounds (aa) and (c).  The case on ground (aa) was based on paragraph (b) of subsection (1A), ie that in impeding the proposed development the restrictions were contrary to the public interest.  The applicant contended that under the policies contained in the Berkshire Structure Plan it was essential that land committed by planning permissions up to June 1976 should be brought forward for development because of the constraints imposed on other land by the pressure on infrastructure, the Green Belt, aircraft noise and flooding.  The applicant drew attention to the fact that the details approved by the local planning authority provided for a belt of trees along Ockwells Lane (as Ockwells Road was then known) which would be on average 35 metres wide and would extend to 60 metres opposite the house.  
8.	In his decision of 20 February 1981 the Member (V G Wellings QC) in Re Bovis Homes Southern Ltd (LP/21/1979, 20 February 1981, unreported) dismissed the application.  In relation to ground (c) he noted (p 27) that a relevant fact was that Ockwells Manor had been unfurnished and unoccupied for some 12 years.  He said that he accepted the evidence of the Trusts’s witnesses that the proposed development would be very damaging to the house and its setting and would make the task of preservation of it more difficult.  He went on:
“I do not believe that the applicants’ proposed tree belt will improve the situation or indeed prevent the damage which the housing estate will cause to Ockwells Manor.  Any occupier of, or visitor to, or prospective purchaser of, the house would only have to take a stroll along the frontage on Ockwells Lane to perceive without difficulty even through the thickest part of the tree belt (more particularly if the trees are to be deciduous) the incongruity of the housing estate.  Notwithstanding the tree belt, the existence of the housing estate on the application land will, in my opinion, render the house almost certainly unmarketable and unoccupied for the foreseeable future.  I conclude that the Trust will be injured if the application land is built on.  I accept that some damage has already been done to the house by the existing development to the north of the application land but that is not a reason for increasing the damage.  I agree also that the view from the northern windows of the house is not perhaps the most important view but those windows do include one of the most important rooms in the house.  I do not accept that the proposed tree belt will obscure the housing development from those rooms even if the trees should be evergreen.  I really do not know to what extent the proposed tree screen would be successful nor how soon it would be established.”
9.	In relation to ground (aa) the Member expressed his conclusions as follows:
“As to paragraph (aa), the loss or disadvantage which the National Trust will, according to my findings, suffer from the proposed modification, is, in my view, not capable of being assessed in money terms.  On that ground alone the applicants’ case under paragraph (aa) fails also.  It also fails because, in my judgment, the restrictions in impeding reasonable user are not contrary to the public interest.  There are two public interests to be balanced one against the other: that represented by the National Trust and that represented by planning considerations.  I am quite unconvinced that the latter interest prevails.  I am not satisfied that there is a shortage of land in the locality although that matter is not entirely clear.  I am uncertain as to what pressures (if any) will be created if the planning permission for what is relatively low-density development on the application land is not implemented.  If non-implementation of it were likely to cause difficulties for the local planning authority in carrying out the Structure Plan policies I would have expected to hear evidence to that effect from that authority.  A witness from that authority, Mr Tupley, gave evidence but, on the contrary, said that the Structure Plan policies would not be damaged if the land were not released for housing.  In all the circumstances, the application, therefore, fails under paragraph (aa).”
10.	In 1991 a further application for modification of the restrictions was made by the present applicant, who had by then become the owner of the application land.  The National Trust was again an objector, and the case was again heard by Mr Wellings, who was now President of the Tribunal.  The application was made on ground (c) alone.  The case for the applicant was that, by reason of the tree screen intervening between the house and the application land, the setting of the house had changed and it was or would no longer be possible to view any substantial part of the application land from Ockwells Manor.  By then, is appears, Ockwells Lane had become Ockwells Road.
11.	In his decision of 26 October 1992 in Re Thames Valley Holdings Ltd (LP/12/1991, 26 October 1992, unreported) the President noted the changes that had taken place since his earlier decision.  He said (at pp 4-5):
“My forecast that the house would almost certainly be unmarketable and unoccupied for the foreseeable future was not very successful because in 1983 Mr Brian Peter Stein purchased the house, the out-buildings, the stables, the great barn, the dovecote and various agricultural buildings together with between 45 and 50 acres of land.  Since then he, his wife and family have occupied the house, those buildings and the land…In or about 1986 Mr Stein planted a belt of conifers on the northern boundary of the curtilage of the Manor adjacent to the boundary wall along Ockwells Road.  The trees were fairly mature then, about 4 or 5 feet above the height of the wall.  The purpose of the trees was to block out the view from the house of the houses in Shoppenhangers Lane.  Mr Stein also planted a line of conifers along the eastern boundary of the land owned by him.  No application was made to the National Trust for its consent to the planting of the trees.  Within the land owned by him, Mr Stein has installed a swimming pool, a tennis court, a helicopter pad and additional stables.
Further in 1986 the applicant company planted a tree screen on the application land on the northern side of Ockwells Road facing the main entrance to the house.  The plantation is approximately 500 metres long and of variable width ranging from around 55 metres opposite the entrance to the house to approximately 25 metres at the western and eastern ends.  The plantation is surrounded by a low security type fence including barbed wire.  The northern boundary of the plantation is irregular but the southern boundary adjacent to Ockwells Road is relatively straight.  Additional planting took place within the tree screen in 1992.”
12.	The President recorded that on 11 June 1992 the company had executed a deed of settlement in respect of the tree screen, appointing trustees.  The trust was intended to last for 80 years from the date of the deed.  Then, having summarised the evidence of the witnesses on each side, including that of Mr Warren, the applicant’s architectural and planning consultant, the President went on (at pp 10-11):
“Mr Warren has not persuaded me that the application land has ceased to be part of the setting of the Manor by virtue of the tree planting which has taken place.  The setting of a building includes its approach and the northern approach to Ockwells Manor is historically and naturally the principal approach to it.  Persons approaching from the three roads which I have mentioned [Ockwells Road, Shoppenhangers Road and Coxgreen Road], the residents of the manor and the public at large, will not fail to be aware of the development if it takes place.  That development would be very damaging to the setting and quite incongruous.
Further the setting of the Manor is not to be judged solely in visual terms.  Moreover, I doubt whether the proposed development, if built, will be totally obscured by the tree screens from all points of view from within the house or its grounds.  As I understand it, it is not suggested on behalf of the applicant company that the development will be totally obscured before, at the earliest, 1996.  That is assumed to be the date by which the development could be expected to be completed.  Accordingly, during the period in which the development would be under construction, it would plainly be visible from the Manor.
The unilateral planning obligation and the deed of settlement do not, in my opinion, compel the inference that the tree screen planted by the company will be efficacious and of long duration.  I do not know whether the Royal Borough of Windsor and Maidenhead would wish to enforce the planning obligation.  The trust created by the deed will last no more than 80 years which is a short time in the life of this 15th century Manor.  The trust appears to be a discretionary non-charitable trust and there is no means by which the National Trust could be sure that the trust would be enforced.  The National Trust is not one of the beneficiaries of the trust.  Moreover Clause 6 of the Deed appears to give the Trustees power to revoke the trust at any time during the perpetuity period of 80 years.”
13.	The President went on to say that the applicant had wholly failed to discharge the onus of showing that there would be no injury whatsoever to the National Trust.  He said that on the evidence at the hearing he had come to precisely the same decision as in 1981.  Counsel for the Trust had submitted that the application should be dismissed as an abuse of process and on the ground of res judicata, and the President said that, although it was not strictly necessary for him to consider this submission, if it had been necessary to do so he would have inclined to the view that the principle of issue estoppel applied.
14.	Mr McGhee submits in the present case that the application should be struck out as an abuse of process.  The power to do so is, he says, inherent, since every tribunal must be entitled to take steps to prevent the abuse of its own jurisdiction.  The essence of Mr McGhee’s submission is that the present application, which is identical to the earlier applications in seeking the modification of the restrictions so as to enable residential development to be carried out on the application land, is an abuse of process because those earlier applications have been the subject of determination by the predecessor of the Upper Tribunal and there has been no material change since they were determined sufficient to justify the present application.  Reliance is placed on a witness statement of Nicholas Peter Mason, Senior Commercial Lawyer at the National Trust filed on behalf of the objector.  Mr Mason says that the setting of Ockwells Manor has not changed since 1992 and that the status of the land in planning terms remains as it was at the time of the earlier decision.  It has, as it then had, outline planning permission and reserved matters approval for residential development: it is not included as a housing site in the development plan; and it is not included in the 5-year land supply or within the strategic land availability assessment.
15.	For the applicant Mr Michael Barnes QC accepts that the Tribunal has power to strike out an application under section 84 for abuse of process and that it is possible to envisage circumstances when it might do so – for instance where an application was dismissed after a full consideration of all arguments and the applicant the very next day made a fresh application on the same grounds and relying on no new facts of any sort.  But that, he says, is most emphatically not the situation in the present case.  He points out that the present application is made on grounds (aa) and (c), whereas the later decision (of 26 October 1993) was made only on ground (c).  Moreover, he says, relying on a witness statement by Peter Jonathan Bovill MRTPI, MRICS, a partner in Montagu Evans, chartered surveyors, filed on behalf of the applicants, circumstances material to each of the grounds now relied on have changed since the earlier applications.
16.	Firstly, it is said, ground (aa) requires consideration of, inter alia, whether the terms of the covenant, in impeding any reasonable user of the land, is contrary to the public interest.  Since the determination of the first application on 20 February 1981, some 30 years ago, there have been significant material changes both in the nature of the public interest considerations and the weight to be attached to them.  In particular, it is said, there is today a compelling public interest in the use of the land for the construction of much-needed new homes, something which did not exist, at any rate to anything like the same extent or urgency, in 1981.  The land, if developed as proposed, would accommodate about 295 dwellings.
17.	Unlike much of the land in the area, it is said, the application land is not in the Green Belt and is not at risk of flooding.  It is included in the Royal Borough of Windsor and Maidenhead’s current Strategic Housing Land Availability Assessment as a potential housing commitment, estimating the capacity of the land at 391 dwellings, which would equate to about 34 % of the potential yield of all of the sites identified in the 15 year period covered by the Assessment.  It is only the existence of the restrictive covenant that has led to the omission of the site from the planning authority’s currently identified and committed housing land supply.  Moreover, in addition to the continuing need for land for open market housing there is the demand, which was not identified until 1991 and has grown in importance since then, for affordable housing.  The constraints of the Green Belt and high land values have made the provision of affordable housing problematic in the Royal Borough and well below target.  If the covenant is modified the land would be suitable for immediate development and would make a significant contribution to both the open market and affordable housing needs of the area.
18.	The applicant’s case is that the weight to be attached to the public interest in meeting current housing needs and the contribution that the application land can make to the achievement of that objective are matters that can only be assessed in the light of circumstances as they exist today.  The decision of the Lands Tribunal taken 30 years ago clearly cannot be determinative of the issue for all time, and the applicant is entitled to bring the matter before the Tribunal now in order that it may be considered in the present context.
19.	Secondly the applicant relies on the changes in the nature of the proposed development and in the physical surroundings since the previous applications were determined.  The modification sought under the present application is confined to permitting the construction of houses and ancillary buildings of which no part exceeds 7.5 m in height.  In addition changes to the layout and form of the development and the opportunities for landscaping and planting within the site will achieve better screening and assimilation when viewed from Shoppenhangers Road, Cox Green Road and Ockwells Road.  Finally, the tree screen is now mature and its efficacy both during the construction period and beyond can be demonstrated by visual inspection; and the applicant now proposes to put in place different arrangements that will ensure the permanent maintenance of the screen.  None of this has previously been before the Tribunal.
20.	Although the parties are agreed that the Tribunal has power to strike out a case as an abuse of process, I think that it is rather more useful procedurally to focus on the provisions of the relevant statutory rules, the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010.  Under rule 8(3)(c) the Tribunal has power to strike out the whole or part of proceedings if “the Tribunal considers there is no reasonable prospect of the case of the …applicant…, or part of it, succeeding.”  It would in general be appropriate, in my view, to strike out a section 84 application under this provision where an earlier application had been determined by the Tribunal on the same grounds as those advanced in the later application and there was no realistic prospect of showing that circumstances had changed to an extent that might lead the Tribunal to reach a different decision.  In the present case, however, I am not satisfied that the applicant has no realistic prospect of showing that circumstances have changed in this way.
21.	The present application relies on grounds (aa) and (c).  On ground (aa) the case is that the restriction impedes development that would constitute a reasonable user of the land and in doing so would be contrary to the public interest.  The public interest case is based on planning need, and it is the nature of the assessment of planning need that it changes over time.  In his decision 30 years ago Mr Wellings said:
“I am not satisfied that there is a shortage of land in the locality although that matter is not entirely clear.  I am uncertain as to what pressures (if any) will be created if the planning permission for what is relatively low-density development on the application land is not implemented.”
It is entirely plausible that the need for housing land in the locality has changed during the intervening period.  Inevitably the land that might now be considered for development will have changed.  And planning policy is different.  Moreover what is now proposed is not relatively low density development but a scheme producing many more houses.  Some of these would be affordable housing, the need for which was not under consideration in 1981.  Of course the parties’ planning experts will differ as to the implications of present planning policy and on the current need to release this land for development and consequently on whether it would be contrary to the public interest to prevent its development, but these are matters that cannot be said to have been decided by the 1981 decision.  
22.	The other aspect of the public interest is the setting of Ockwells Manor.  Whether the impact that development would have on the setting has altered since the 1981 and 1993 decisions because of changes that have taken place (for instance the growth of the tree screen) or whether the applicant is now able to meet Mr Wellings’s concern that maintenance of the tree screen in perpetuity or at least for the long term could not be guaranteed are matters that would need to be addressed in relation to this other aspect of the public interest so that it can be weighed against the housing need considerations.  These are also matters that would require consideration in relation to ground (c).  While I think it unlikely that the applicant would be able to establish that the modification sought, permitting the development of 295 or so houses, would cause no injury at all, in contrast to Mr Wellings’s assessment in 1993 that the lower density development “would be very damaging to the setting and quite incongruous”, I would not think it appropriate to strike out this particular ground given that, for the reasons set out in the previous paragraph, it would not be appropriate to strike out ground (aa) on the basis that, in view of the earlier decisions, there was no reasonable prospect of the case succeeding on that ground.  The additional burden on the Trust in dealing with ground (c) would not be significant.  I would feel less sure about striking out ground (c) if my conclusion below in relation to the compensation issue was that ground (aa) should be struck out.  On balance, however, I would not think it appropriate to do so.
23.	I turn then to the Trust’s other contention, which relates specifically to ground (aa).  Subsection (1A) of section 84 provides:
“(1A) Subsection (1)(aa) above authorises the discharge or modification of a restriction by reference to its impeding some reasonable user of the land in any case in which the Upper Tribunal is satisfied that the restriction, in impeding that user, either– 
(a)	does not secure to persons entitled to the benefit of it any practical benefits of substantial value or advantage to them; or
(b)	is contrary to the public interest;
and that money will be an adequate compensation for the loss or disadvantage (if any) which any person will suffer from the discharge or modification.”
Mr McGhee contends that ground (aa) should be struck out because the applicant cannot show that money will be an adequate compensation for the loss or disadvantage that the National Trust will suffer from the modification.  Although couched as preliminary issue in an order of 1 November 2010, it seems to me, like the Trust’s first contention, that it should be treated under rule 8(3)(c).  The question, therefore, is whether there is no reasonable prospect of the case of the applicant succeeding on ground (aa) because money would not be adequate compensation for the loss or disadvantage that the National Trust will suffer from the modification.
24.	The point arose in the decision of 20 February 1981, where Mr Wellings said (at 28):
“As to paragraph (aa), the loss or disadvantage which the National Trust will, according to my above findings, suffer from the proposed modification, is, in my view, not capable of being assessed in money terms.  On that ground alone the applicants’ case under paragraph (aa) fails also.”
He did not expand on or explain this conclusion, but it is to be noted that he had earlier quoted with approval what Lord Denning MR had said about the Trust’s power to enforce a covenant under section 8 of the 1937 Act in Gee v National Trust [1966] 1 WLR 170 at 174-175.  Having described the Trust as being, under the Act,
“the custodians of the natural beauty of our land, the cliffs and downs, fields and woods, rivers and shores; and of stately homes, historic buildings, cottages and barns,”
Lord Denning went on later to say:
“I am prepared to accept the view that the National Trust, where a covenant of this kind is made, is entitled to enforce it so as to protect the interests of which they are the custodians in this country.”
25.	In May 1988 in Re Martin (1988) 57 P & CR 119 the Court of Appeal had to consider an appeal against another decision of Mr Wellings under section 84 ((1987) 53 P & CR 146).  It concerned a restriction secured under section 37 of the Town and Country Planning Act 1962 (the equivalent provision to that in sections 52 and 106 respectively of the successor Acts of 1971 and 1990), providing that the application land should not be used other than as a private open space.  The respondent in the Court of Appeal was the local planning authority.  The Tribunal had rejected all three grounds on which the application had been advanced – (a), (aa) and (c) – holding in relation to (aa) that the restriction did secure to the council a practical benefit of substantial advantage, and going on ((1987) 53 P & CR 146 at 154:
“Moreover, in my opinion, money would not be an adequate compensation for the loss or disadvantage which the council will suffer if the restriction is discharged or modified as sought.”
26.	The Court of Appeal dismissed the appeal.  In the only reasoned judgment Fox LJ, with whom Balcombe LJ and Sir Frederick Lawton agreed, held in relation to each of the grounds that the Tribunal had been entitled to reach the conclusions that it had, and he went on ((1988) 57 P & CR 119 at 126):
“The member said that money would not be an adequate compensation to the corporation for the discharge of the covenant.  I think that must be right.  If the covenant is of value to the corporation for the protection of the public interest in the preservation of the amenities, it is difficult to see how a money payment could be adequate compensation.  Money compensation seems wholly inappropriate.”
27.	Mr McGhee refers to a number of subsequent decisions of the Lands Tribunal in which the approach in Re Martin was applied (Re Houdret and Co Ltd (1989) 58 P & CR 310 (Mr Wellings and T Hoyes FRICS); Re Towner (1989) 58 P & CR 316; Re Whiting (1989) 58 P & CR 321; and Re Quartley (1989) 58 P & CR 518 (all decisions of Mr Wellings); Re Hopcraft (1993) 66 P & CR (HH Judge Marder QC, President); and Re Bewick (1997) 73 P & CR 240 and Re Willis (1997) 76 P & CR 97 (both decisions of P H Clarke FRICS)) and to a recent decision of mine, Re Zenios [2010] UKUT 260 (LC).  This last case concerned an application to modify a covenant in Hampstead Garden Suburb so as to permit alterations to a house.  The Hampstead Garden Suburb Trust, which objected to the application, had the benefit of the restriction under a scheme of management made under the Leasehold Enfranchisement Act 1967.  The contention, which I accepted, on behalf of the Trust was that money would not provide adequate compensation for the modification sought, so that even if the other elements of ground (aa) were made out (and I held that they were not all made out) the application on this ground would fail.  I said:
“23. In my judgment [counsel for the Trust’s] submission is correct, and the conclusion of the Court of Appeal in Re Martin in the passage I have quoted (which [counsel for the applicants] accepts is binding authority for the proposition that it includes) applies here.  The Trust’s interest is that of custodian of the public interest.  It was given its management powers under the scheme because the Minister was satisfied that this was necessary ‘for the purpose of ensuring the maintenance and preservation’ of the Suburb.  The fact that the Trust is not a creature of statute is nothing to the point.  It is because of the nature of its interest, in maintaining and preserving the Suburb, that money would not provide adequate compensation for any disadvantage caused by the modification.  If, therefore, the modification sought would have some adverse effect on the amenities that the Trust has the function of protecting ground (aa) will not have been made out.”
28.	On 3 May 2011 Mummery LJ granted the applicants in Re Zenios permission to appeal to the Court of Appeal.  As stated in the passage I have quoted above it was conceded in the Tribunal by counsel for the applicants that Re Martin was binding authority.  The contentions advanced in relation to the provisions of subsection (1A) relating to compensation were that they were directory and not mandatory; and that in any event Hampstead Guardian Suburb Trust was not a custodian of the public interest and so Re Martin had no application.  The appeal is due to be heard by the Court of Appeal on 7 or 8 November 2011.
29.	Mr McGhee’s submission is that the ratio of Re Martin is that, when the interest sought to be protected by the covenant is the interest of a body in its capacity as custodian of the public interest, money cannot be adequate compensation.  On that basis, he says, the application in the present case could not succeed on ground (aa).  Mr Barnes accepts that if that is indeed part of the ratio that is an end of the matter.  He submits, however, that what Fox LJ said is not properly to be treated as part of the ratio, and that the applicant is free to argue that money paid to the National Trust could constitute adequate compensation because it could be applied to the public benefit to offset any detriment suffered as a result of the modification.
30.	The reasons that Mr Barnes advances for saying that the short passage in Fox LJ’s judgment in Re Martin does not form part of the ratio in that case are these.  Firstly he notes that the application failed on ground (a) (because the restriction was not deemed to be obsolete), on ground (c) (because the discharge of the restriction would cause injury to the objector, Hastings Borough Council) and on ground (aa) (because the restriction provided a benefit of substantial value or advantage to the council).  The Court of Appeal upheld the Tribunal’s conclusions on each of these matters.  Thus, Mr Barnes says, a decision on whether or not money would be an adequate compensation for the discharge was unnecessary for the determination and cannot constitute part of the ratio.
31.	Secondly, Mr Barnes says, there is nothing in the judgment of Fox LJ to indicate that the issue of whether or not money would be an adequate compensation for the discharge was ever argued before the Court; the same appearing to have been the case in the Tribunal, where Mr Wellings simply found as a fact that money would not be an adequate compensation, rather than basing his finding on some principle of general application.  Mr Barnes’s third point is that the terms in which Fox LJ expressed himself were tentative and were unlikely to have been intended by him to form part of the ratio.
32.	In many of the other Lands Tribunal cases in which it has been said that money would not be an adequate compensation for the loss or disadvantage suffered by a body considered to be a custodian of the public interest, Mr Barnes says, the point was either not argued or was unnecessary to the decision either because the application failed on ground (aa) for other reasons or because there was a finding that there would be no injury to the objector.  The exception, he recognises, is Re Quartley.  That case contained a restriction, imposed in a section 52 agreement, limiting the occupation of a house to those employed in agriculture.  In rejecting the application on ground (c) Mr Wellings said ((1989) 58 P & CR 518 at 525):
“…I am not satisfied that the proposed discharge of the restriction would not injure the council in its capacity as custodian of the public interest.  In that capacity, the council would suffer some injury from discharge of the restriction because loss of it would tend to increase, however slightly, the pressure on the council to permit the erection of a new house for occupation by an agricultural worker in the open country side, contrary to its planning policies.”
On ground (aa) he said that the practical benefits secured to the council were not of substantial value or advantage, but the application failed on that ground – 
“…because I am unable to hold that money will be an adequate compensation for the loss or disadvantage (that is to say the injury which I have identified under paragraph (c)) which the council will suffer.”
33.	  Mr Barnes says that it appears from all the cases taken together that the assumption that money would not be an adequate compensation for the loss or disadvantage suffered by a body considered to be a custodian of the public interest has never been seriously challenged and, importantly, that the Tribunal has never had to grapple with the tension that will inevitably occur if ground (b) of subsection (1A) is made out, ie that in impeding some reasonable use of land the restriction is contrary to the public interest.  Moreover in one case, he says, Stockport Metropolitan Borough Council v Alwiyah Developments (1986) 52 P & CR, 278, the Lands Tribunal did award compensation to a public authority.
34.	It is clearly not possible to extract from the wording of the statute a principle of law that, when the interest sought to be protected by the covenant is the interest of a body in its capacity as custodian of the public interest, money cannot be adequate compensation.  The question whether in any particular case money would be adequate compensation can only, in my judgment, be a question of fact.  Of course, there may be factual circumstances in which it would be perverse for the Tribunal to conclude that money would be adequate compensation, so that it would be wrong in law if it did so conclude.  It would then be possible to say that in such circumstances, as a matter of law under the statute, money would not be adequate compensation.  To state this as a principle of law would, however, require a categorisation of the circumstances so as to enable the principle to be applied in other factual situations.
35.	The Tribunal’s conclusions in Re Martin on ground (aa) were expressed shortly and without elaboration or further explanation (see paragraph 25 above).  Appeal lay to the Court of Appeal on a point of law only, so that the question was whether the Member had been entitled to reach these conclusions (and those he had reached on grounds (a) and (c)), not whether those were the right conclusions on the facts.  Fox LJ thus went further than he needed to go in saying he thought that “it must be right” that money would not be adequate compensation.  Had the point been of central importance in the decision, or if it had appeared that the point was one that had been the subject of substantial submissions, I would nevertheless have concluded that the reason – a money payment would not be adequate compensation where the covenant was of value to the corporation for the protection of the public interest – formed part of the ratio decidendi.  But it is to be noted that the passage did not form part of the judgment dealing with ground (aa).  The lord justice dealt successively with grounds (a), (aa) and (c) before adding what he did about compensation.  The implication is that this was done for completeness, to address all the matters that had been raised, rather than as part of the reasons for dismissing the appeal in relation to ground (aa).  On balance, therefore, I agree with Mr Barnes that this passage in the judgment does not form part of the ratio.
36.	Having said this, I think that there can be no doubt that the passage is a dictum of significance, and the decisions of the Lands Tribunal and this Tribunal that are relied on by Mr McGhee accord with it.  The point is an obvious one, and is simply stated: if the purpose of the restriction is to protect the public interest, and if the benefit of the restriction to the covenantee body lies solely in its ability to enforce the restriction, the mere payment of money to the covenantee will do nothing to alleviate the loss of the benefit.  The public interest, the sole concern of the covenantee, will have suffered, and the mere payment of money to the covenantee will not make up for this.  (Stockport v Alwiyah, relied on by Mr Barnes, was a different type of case.  The Lands Tribunal awarded compensation to the council to reflect the small diminution in the value of its housing stock that would arise from the development of adjacent land.  The compensation was thus paid to it as a landowner and the adequacy of the compensation could be established as a matter of valuation.)
37.	I have used the words “the mere payment of money” advisedly.  The case that the applicant wishes to advance in the present case is not that the mere payment of money will provide adequate compensation to the National Trust (in the same way that an award of general damages for personal injury provides compensation to the person who has suffered the injury).  It is rather (as expressed in paragraph 74 of the Statement of Grounds in support of the originating application) that “if there is a loss or disadvantage to the National Trust in terms of their interest as custodians of our national heritage a reasonable sum of money can be awarded to them in compensation for the loss which can then of course be used by them towards their general expenses of protecting and promoting our heritage in other localities or other ways.”  It appears that in none of the decisions of the Lands Tribunal and this Tribunal on which the Trust relies was there any attempt on the part of the applicants to show why money would be adequate compensation for the loss suffered by the objector body, and it is understandable that on each occasion the conclusion, stated without elaboration or explanation, was that money would not be adequate compensation.  I do not know how far the applicant might wish to go in seeking to establish how the Trust might apply any money award in its favour in order to show that the public interest that is of concern to the Trust will derive a commensurate benefit to set against the loss or disadvantage caused by the modification.  But the contention as pleaded, in my view, is a properly arguable contention, and the applicant ought not to be debarred from advancing it.
38.	I am satisfied, therefore, that neither the application itself nor either of grounds (aa) or (c) should be struck out, and the Trust’s application to do this is therefore dismissed.  Directions for the further conduct of the case will be given in due course.  I would add that the issue of compensation seems to me of such general importance, and other aspects of the case to be of such difficulty, as to make it a case suitable for hearing by a High Court judge sitting with a surveyor member.
								Dated 16 August 2011

								George Bartlett QC, President