Domus Living v Edward VII Estates: tribunal discharges restrictive covenant on Midhurst heritage estate

The Upper Tribunal (Lands Chamber) has discharged a restrictive covenant that had prevented a developer from retaining a six-bedroom house built on a plot within the King Edward VII Hospital Estate near Midhurst, finding that the covenant no longer served any practical purpose and that its holder would suffer no injury from its removal.

In Domus Living Limited v Edward VII Estates Limited [2026] UKUT 287 (LC), Upper Tribunal Judge Elizabeth Cooke and Mrs Diane Martin MRICS FAAV considered an application under section 84 of the Law of Property Act 1925 concerning a plot known as Southwood, part of a heritage led redevelopment of the former King Edward VII hospital in the South Downs National Park. The scheme had been granted planning permission on the basis of "enabling development", allowing otherwise unjustifiable housing to fund the conservation of the listed hospital buildings.

Southwood had been sold subject to a covenant requiring any building to be constructed strictly in accordance with a 2014 planning permission for a four bedroom house. The applicant instead obtained fresh planning permission and built a six bedroom house some 1,200 to 1,300 square feet larger. When a prospective buyer withdrew after discovering the breach, Domus Living applied to discharge both that covenant and a related requirement for the landowner's consent to any building works, the latter of which the respondent did not oppose.

The respondent, Edward VII Estates Limited, argued that discharging the planning covenant risked prejudicing its remaining development on the estate, on the theory that the local planning authority might reassess the overall scale of enabling development permitted if it became apparent that Southwood had exceeded its consented size. Counsel for the respondent likened the arrangement to a gift card with a fixed credit limit. That argument was substantially undermined once it emerged that most of the land on which further development had been expected to take place had in fact been transferred to a related company, which had unsuccessfully sought to be joined to the proceedings because the benefit of the covenant had never been assigned to it.

The tribunal was highly critical of the valuation evidence put forward in support of the objection. Rather than assessing the effect of a mere risk of planning reassessment, as directed, the respondent's expert had valued a small yard on the retained land on the assumption that the feared reassessment had already occurred and that fresh permission had been refused, an approach the tribunal described as akin to valuing land on the assumption that a flood had already happened rather than that flooding was merely a risk. Finding no evidential basis for any of the underlying assumptions, the tribunal concluded that the covenant conferred no practical benefit, that its discharge would not injure the respondent, and that it was in any event obsolete now that the respondent had no further enabling development of its own to protect.

On the question of discretion, the respondent invited the tribunal to withhold relief on the basis that the applicant's director had cynically built in deliberate breach of the covenant, relying on the Supreme Court's guidance in Alexander Devine Children's Cancer Trust v Housing Solutions. The tribunal accepted that the director had been careless in failing to absorb legal advice about the covenant, but rejected any suggestion of dishonesty or concealment, noting that the development had proceeded openly and that the sales history gave no reason to expect the covenant would prove significant.

Finally, the tribunal declined to award compensation, finding no evidence that the land could in fact have been sold for a higher price without the covenant, given that the property had languished on the market at the same price regardless of the restriction ultimately imposed.