Schwarzschild Ochs Pty Limited v Concerto Properties Limited
Decision date: 20 June 2022
Neutral citation: [2022] UKUT 150 (LC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
The Tribunal considered an application to modify a 1995 user covenant restricting Nos.208–210 Great Portland Street to shop/showroom or B1 uses, to permit medical (Class E(e)) and office (E(g)) uses with the landlord's consent. It rejected ground (a) obsolescence but granted relief under ground (aa), finding the restriction secured no practical benefit of substantial value in preventing medical use and ordering substitution of clause 3(9) to permit E(e) and E(g) uses subject to prior written landlord consent (not to be unreasonably withheld or delayed). No compensation was awarded.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The enforceability of a leasehold user covenant is not defeated merely by a change in neighbourhood character; such a covenant is obsolete under s.84(1)(a) LPA 1925 only if it no longer secures the negative effect it was intended to protect. Under s.84(1)(aa), a landlord’s ability to extract payment or preserve a bargaining position for consent does not constitute a "practical benefit of substantial value" sufficient to prevent modification; assessment of ground (aa) depends on the practical effect of the covenant, and an applicant need not always present a single definitive development project where the proposed variation is sufficiently described.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The Tribunal observed (obiter) that ordinary lease covenants addressing nuisance, waste, compliance with enactments and floor loading can adequately control new medical uses without bespoke medical-use covenants, and that comparisons with historic transactions in superior medical locations (e.g. Harley Street) may have limited weight in assessing compensation for modifications in a different locality.