Developers beware: cynical breach cases are on the rise, write Caroline Shea KC & Richard Miller
- Alexander Devine Children’s Cancer Trust v Housing Solutions Ltd established that applications under s 84(1) of the Law of Property Act 1925 involve two stages: the jurisdictional stage (where the Upper Tribunal considers whether one of the grounds in subsections (a), (aa), (b), or (c) is satisfied); and the discretionary stage.
- At the discretionary stage, the Supreme Court considered whether there had been ‘a cynical breach’ of the covenant which the applicant was seeking to have modified or discharged was highly relevant.
- Subsequent case law suggests that the factor of cynical breach has assumed increasing importance.
The developer’s last obstacle to realising the value of their land—after having assembled a site, bought out competing interests and secured planning permission, often at great time and expense—can be restrictive covenants. There are plenty of commercial reasons why an eager developer may wish to start their project without going through the process of discharge and modification under s
