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Lawbite: Building Boats – Superyacht Sized

  • United Kingdom
  • Litigation and dispute management

12-12-2017

Pendennis Shipyard (Holdings) Limited v A&P Falmouth Limited [2017] UKUT 430 (LC)

This case involved an unusual objection to the modification of a restrictive covenant - concerned with the effect of the modification on a business rather than land.

The applicant, a builder of “superyachts”, sought to modify the restrictive covenants on part of its operational land so as to match the restrictive covenants on the rest of its site. The application was on the ground that the continued existence of the covenant would impede some reasonable user of the land.

One objector, who ran a business building commercial and military vessels on adjoining land, objected on the basis that the applicants would be able to work in direct competition. A second objector resisted the change fearful that it would lead to the applicants paying to use the second objector’s facilities less frequently.

It was held that the covenant should be modified – not so that it matched the covenants on the remainder of the applicant’s site, but so as to prohibit boat building “other than…building of yachts and pleasure craft of any size”, (superyachts being boats always but ships just sometimes, apparently). Release of the restrictive covenants regarding commercial or military vessels was refused. These still secured practical benefits of substantial value to the objectors.

Key points

  • Objections to applications for modifications based on commercial considerations should be anticipated alongside objections based on the effect on land.
  • Extensive expert evidence as to practicalities, economics, future plans etc. may be needed.
  • Even then, it is still open to the court to modify in a way that wasn’t even requested.