When selling a house to its tenant under the right to buy legislation, the council had imposed a restrictive covenant preventing the new owner developing the land by further building. The purchaser later approached the council for its release so as to allow further building. He had obtained planning permission for the proposed development. When the council refused, the surviving purchaser sought judicial review of that refusal.
Held: The purchaser’s appeal succeeded. The council had confirmed that the property had been sold at its full market value, without any adjustment to reflect any possible development value, but then adjusted with the appropiate discount. The council now said that it had imposed the covenant in order to retain to itself any development value. It is established law that a council may act under any Act only for purposes allowed by that enabling Act. Despite its assertion, the council had not imposed the covenant with a view to assist in making the properties more affordable generally. The Act set out the elements to be considered in setting the valuation. The purpose of reserving any development value to itself was not one permitted by the Act under which it had been sold. The purpose of the Act was to permit former tenants to enjoy the full range of benefits of land ownership as were enjoyed by other land owners. What was reasonable was what would be reasonable to both parties, not just one. The council might reserve rights which properly affected its remaining estate, for example in the control of noise or other nuisance, but this was not such a purpose. The restrictive covenant was void and the council could not demand any payment for its removal.
Laws LJ considered the principle in Padfield: ‘The rule is not that the exercise of the power is only to be condemned if it is incapable of promoting the Act’s policy, rather the question always is: what was the decision-maker’s purpose in the instant case and was it calculated to promote the policy of the Act?’
Judges:
Laws LJ, Jonathan Parker LK, Evans LJ
Citations:
Times 15-Mar-2000, (2000) 32 HLR 770
Statutes:
Housing Act 1985 127(2) Sch6 para 5
Jurisdiction:
England and Wales
Citing:
Appeal from – Regina v Braintree District Council ex parte Halls Admn 2-Jul-1999
Where a local authority had sold a property to a tenant, and the tenant later came back to request the release from one of the covenants given on the sale, the council was free to charge an appropriate sum for that release. It was not a covenant . .
Applied – Padfield v Minister of Agriculture, Fisheries and Food HL 14-Feb-1968
Exercise of Ministerial Discretion
The Minister had power to direct an investigation in respect of any complaint as to the operation of any marketing scheme for agricultural produce. Milk producers complained about the price paid by the milk marketing board for their milk when . .
Cited by:
Appealed to – Regina v Braintree District Council ex parte Halls Admn 2-Jul-1999
Where a local authority had sold a property to a tenant, and the tenant later came back to request the release from one of the covenants given on the sale, the council was free to charge an appropriate sum for that release. It was not a covenant . .
Cited – Cala Homes (South) Ltd v Secretary of State for Communities and Local Government and Another Admn 7-Feb-2011
The claimant sought judicial review of a statement and letter by the respondent making a material consideration for planning authorities the intended revocation by the Respondent of Regional Spatial Strategies. The effect would be to allow the . .
Cited – Cala Homes (South) Ltd, Regina (on The Application of) v Secretary of State for Communities and Local Government and Another CA 27-May-2011
The respondent had circularised local authorities to say that when assessing future local housing needs a proper material consideration was the proposed Localism Bill which would lead to the replacement of ‘Regional Spatial Strategies’ on which such . .
Lists of cited by and citing cases may be incomplete.
Local Government, Housing, Land
Updated: 11 May 2022; Ref: scu.85141