Law Report: Variation of right not disposal of land: Regina v Thurrock Borough Council, Ex parte Blue Circle Industries plc - Court of Appeal (Lord Justice Nourse, Lord Justice Glidewell and Lord Justice Simon Brown), 16 September 1994.

An agreement to vary a covenant in a lease of a site so as to permit the deposit of loose waste instead of high density baled waste on the site could not amount to a disposal of land. Therefore a local authority was not entitled to demand money in return for its agreement to such a variation.

The Court of Appeal dismissed the council's appeal against Mr Justice Macpherson's decision on 23 March 1994 to grant Blue Circle a declaration that the council is not entitled to demand money or monies worth as consideration for the variation of a covenant in an option to lease land.

In 1981 Blue Circle applied for planning permission for the winning and working of clay in land at South Ockenden, Essex, which involved excavatiing and refilling the site. Essex County Council, the planning authority, was required to take into account views expressed by Thurrock, which supported a process of waste disposal known as high density baling. Blue Circle agreed to use that system and was granted permission.

Blue Circle granted an option to Thurrock to lease land that had been excavated and was available for restoration. In 1991, Blue Circle asked Thurrock to consider amending covenants in the option agreement so that instead of requiring only high density baled material, loose landfill and other waste material could be used.

Thurrock replied that the covenant variation would enable Blue Circle to make savings and that if Thurrock could share in the savings, it would reconsider.

Thurrock argued that the covenants created an interest in land or a right over land and the variation of the covenants would detract from Thurrock's rights and thus be the disposal of an interest in or a right over land for which Thurrock was required by section 233 of the Town and Country Planning Act 1990 to demand the best consideration which could reasonably be obtained, and so its demand for payment in return for its agreement to the variation was lawful.

Joseph Harper QC and Nigel Gerald (borough solicitor) for the council; Michael Beloff QC and Robin Campbell (Nicholson Graham & Jones) for Blue Circle.

LORD JUSTICE GLIDEWELL said the issue was: Would the agreement and variation sought by Blue Circle amount to a 'disposal of land' within section 233? For Thurrock to agree that other types of waste material might be deposited in the excavated site would not in any way vary or detract from the rights granted to it by the option. Such an agreement could not be described as a disposal of land.

It was then necessary to consider whether the variation of the covenant to permit the deposit of domestic refuse which was not subjected to high density baling would be a 'disposal of land'. 'Disposal' was defined in section 336.

An agreement to vary a right was not normally a disposal of a right or interest. Assuming that the covenants would create a right over land, the variation in the terms of the covenant would amount to a variation of that right but the right itself would still remain. Thus such a variation would not be a disposal of the right.

Thus section 233 did not apply to the variation sought by Blue Circle.

LORD JUSTICE SIMON BROWN, concurring, said the 'disposal of land' involved not merely the relaxation of contractual rights relating to an aspect of the use of land but rather some altogether more fundamental surrender of proprietorial rights.

LORD JUSTICE NOURSE, concurring, said that a disposal was a transaction by which there was an out and out parting with an asset or where there was a proprietary interest in an asset. The relaxation of a right to control land use, the right as varied being retained, was not such a transaction.