High Court discharges restrictive covenant

RDJ partner Martin O’Callaghan has highlighted what he describes as a “significant” High Court decision, in which Mr Justice David Nolan granted an order discharging a restrictive covenant that had prohibited the development of residential lands in Co Limerick. 

The RDJ lawyer says that this marks the first written judgment on the exercise of section 50 jurisdiction under the Land and Conveyancing Law Reform Act 2009. 

The plaintiff in the case was a property-development company that was the freehold owner of a plot of land in Co Limerick that was surrounded by several housing developments. 

Guia Properties Ltd sought to develop the lands in accordance with planning permission obtained on 10 August 2020 for the construction of ten houses, an access roadway, and ancillary site works. 

‘Unreasonable interference’ 

A restrictive covenant registered on the plaintiff's folio, however, prohibited use of the land for any purpose other than a single private or professional dwelling-house. 

Guia applied to the High Court under section 50 of the 2009 act seeking discharge of the covenant on the grounds that continued compliance with it would constitute an unreasonable interference with the use and enjoyment of its land. 

Section 50 requires a court to balance the interests of the ‘dominant’ and ‘servient’ owners – those entitled to enforce the covenant and those burdened by it, respectively. 

In a note on the firm’s website, O’Callaghan notes that the court took account of several factors: 

• No party sought to uphold the covenant – the first of two defendants was no longer trading and had not participated in the proceedings, while the second was in liquidation, with its liquidators taking a neutral position,
• The court was satisfied that the covenant had been created for the purpose of conferring a commercial benefit on the second defendant, rather than any real benefit to the dominant land,
• Development had accelerated on the surrounding lands, leaving the ‘servient’ land as something of a wasteland,
• The modification or discharge sought was consistent with the surrounding development and conformed with the Limerick Development Plan 2022-2028, and
• Given wider planning objectives. the court was satisfied that the discharge of the covenant would be in the public interest. 

‘Fair balance’ 

Delivering judgment, Mr Justice Nolan stated:  "In my opinion, a fair balance has been struck between the right of the dominant owners, the rights of the plaintiff to use and enjoy the land without unreasonable interference, and the general interests of the public and local community in circumstances where there is a national shortage of housing and a growing population." 

The RDJ lawyer says that the judgment will be of interest to practitioners advising on the discharge or modification of restrictive covenants. 

He adds, however, that the case “turns firmly on its own particular facts”. 

O’Callaghan points to the several features referenced by the judge that combined to make this an “unusually strong” case for discharge. 

Importance of planning permission 

“Practitioners should therefore be cautious about treating this decision as establishing a general presumption in favour of discharge in analogous circumstances,” he warns. 

The RDJ lawyer notes, in particular, the significant emphasis placed by Mr Justice Nolan on the fact that planning permission had already been obtained for the proposed development. 

“This underscores the practical importance, when pursuing an application under section 50, of securing planning permission in advance of, or in conjunction with, proceedings,” he concludes.