Great Jackson St Estates Limited v The Council of The City of Manchester

This dispute came out of a major regeneration area in Manchester. Great Jackson held a long lease over Plot G, a site with two old warehouses. The surrounding area had moved away from its earlier industrial character and had been earmarked for modern, high-density residential development.

Great Jackson wanted to replace the warehouses with two 56-storey towers containing 1,037 flats. The Council supported redevelopment in planning terms and planning consent was granted. But the Council was also the freeholder, and the lease contained restrictions that meant the project could not simply proceed under the existing lease.

The remaining lease term mattered. At the Upper Tribunal stage, about 61 years were left. The Council wanted redevelopment to happen under a new 250-year building lease with conditions and milestones designed to make sure the project started and finished on time. Great Jackson did not agree those terms.

Instead, Great Jackson asked the Upper Tribunal to modify or discharge 11 lease covenants under section 84 of the Law of Property Act 1925. Its aim was to let the redevelopment proceed under the existing lease once planning consent was in place, rather than under a new negotiated lease structure.

The covenants were not limited to one simple redevelopment ban. The judgment records several groups of restrictions that together gave the Council significant control over what could happen on the site.

One group prevented development without the Council’s consent and did not say that consent had to be given reasonably. These included restrictions on building over a public sewer, gas main and service duct, building over more than two thirds of the site, building close to side or rear boundaries, changing the use away from the warehouse and light industrial model, and removing trees or shrubs without consent.

A second group required the Council’s consent, not to be unreasonably withheld, for additions, alterations, improvements, new buildings and open storage. If consent was given for works, the lease also required approved plans, supervision by a registered architect and approved materials.

There were also broader management and use restrictions. These covered nuisance, visible waste storage, advertisements, and dealings with the property such as assignment, subletting and parting with possession. In practice, that meant the lease affected not only construction but also how the completed scheme could be occupied and managed.

The case was not really about whether housing should be built on the site. The court recorded that both sides wanted redevelopment to happen. The real dispute was about control over the conditions on which it would happen.

The Council’s concern was that the development might not be completed in a timely way, or might not be completed at all. It wanted safeguards around commencement, delivery and completion. The proposed new lease was intended to provide those safeguards through milestones and enforcement mechanisms.

Great Jackson argued that the Council was effectively using the lease covenants as leverage to push it into a new lease. It said that kind of bargaining position should not count as a practical benefit protected by section 84. The Council said the benefit was more concrete than bargaining power. It said the covenants let it stop uncontrolled development and insist on protections for orderly delivery of one of the last pieces of a wider regeneration plan.

The Upper Tribunal had also made factual observations about Great Jackson’s evidence. It noted concerns about the clarity and consistency of the evidence on deliverability and the intended letting model. Those points formed part of the background, but the Court of Appeal’s decision ultimately turned on the practical benefit issue.

The central legal question was whether the lease covenants gave the Council practical benefits of substantial value or advantage for the purposes of section 84(1)(aa) and section 84(1A) of the Law of Property Act 1925.

Great Jackson wanted the covenants modified or discharged so the redevelopment could proceed under the existing lease. It argued that the Council was really relying on the restrictions as bargaining power to force a new lease, and that this should not count as a practical benefit under section 84.

The Council argued that the covenants gave it something more than leverage. They allowed it to prevent the site from being developed in an uncontrolled way and to reduce the risk of delay, disorder or an unfinished project. The Court of Appeal had to decide whether the Upper Tribunal had been entitled to treat that as a substantial practical advantage.

The appeal also raised arguments about section 84(1C), which allows additional conditions to be added when a restriction is modified. But the Court of Appeal held that this did not change the result. The proposed wording relied on by Great Jackson did not address the Council’s concerns about timing and completion.

The Court of Appeal dismissed the appeal. It held that the Upper Tribunal had been entitled to find that the covenants gave the Council practical benefits of substantial advantage.

The court said a mere power to enforce a covenant cannot automatically count as a practical benefit. If that were enough, section 84 would have very little work to do. But this case went further. The benefit flowed from compliance with the covenants because they allowed the Council to prevent development of the site without appropriate safeguards.

The court agreed that the Council was not simply trying to obtain a monetary advantage or using the covenants as an obstacle to be negotiated away. Instead, it was using them for their intended purpose, namely to retain a significant degree of control over development of the site.

The judgment emphasised that the Council could withhold consent until it was satisfied that Great Jackson’s proposals could be delivered in a timely and orderly manner. That ability let the Council influence the form of the development and mitigate the risk that the site might not be developed properly or might be left unfinished.

The court also said that this was more than bare control. The covenants helped the Council further its overall strategy for the area, of which Plot G formed part. In that sense, the benefit was analogous to estate-management control rather than simple commercial pressure.

The court further held that it was legitimate to take account of the Council’s public role. Even acting as landlord, it remained a public body exercising rights in the light of its wider duties. The court therefore saw no error in the Upper Tribunal taking account of the Council’s role in ensuring orderly and proper development for the benefit of Manchester as a whole.

Once the Court of Appeal upheld the finding that the covenants secured practical benefits of substantial advantage, that was enough to defeat the appeal on the main section 84 ground relied on.

Because of that, the court said it did not need to decide the further issues about the Upper Tribunal’s hypothetical exercise of discretion. It also said it was unnecessary to decide whether Great Jackson had failed to show the proposed user was viable under the existing lease, or whether money would have been adequate compensation if the covenants had been modified or discharged.

That matters when reading the case. It is authority on the limits of section 84 where lease covenants give a landlord real control over orderly development. It is not a final ruling on every argument raised about viability, compensation or discretion.

This decision matters if your business is buying, funding, leasing or redeveloping commercial land. It is a reminder that planning permission is only one part of the project structure. Lease covenants can still be a hard stop.

It matters even more where the remaining lease term is limited. A scheme may look viable in planning and design terms, but the landlord may still insist that redevelopment only happens under a new or extended lease with milestones, completion protections and funder step-in rights. If that happens, the existing lease may not give you enough room to force the issue.

The case is also important for local authority sites and wider estate developments. A council may be able to point to a broader regeneration strategy and say that lease controls serve a real public and estate-management purpose. That can make it harder to argue that the restrictions no longer provide substantial practical benefit.

For developers, the practical message is simple. Do not treat lease restrictions as a secondary legal clean-up exercise after planning. They can determine whether the project can proceed at all, on what timetable, and under what funding structure.

If you are planning a redevelopment, the safest approach is to treat lease analysis as an early commercial task. This case shows how expensive and strategic the issue can become once planning and design work are already advanced.

Start by mapping every lease clause that could affect demolition, rebuilding, change of use, subletting, funding and occupation. Then test whether your intended structure works within the remaining term and the landlord’s consent rights. If the landlord is likely to insist on a new lease, understand that before you spend heavily on the scheme.

Also check whether the site sits within a wider estate or regeneration plan. If it does, the landlord may be able to say that redevelopment controls are not just private bargaining tools. They may be part of a broader strategy for orderly delivery of the area.

For a business owner, this case is a reminder that lease risk can become programme risk, funding risk and exit risk. If the landlord can stop redevelopment under the current lease, your planning success may still leave you unable to start on site.

That can affect land value, investor confidence and lender appetite. A funder may want certainty on term length, development milestones and enforcement rights before backing a major build. If those protections depend on a new lease and the parties have not agreed it, the project timetable may slip long before construction begins.

The judgment also shows the limits of trying to use section 84 as a substitute for unresolved commercial negotiations. Where the landlord can show a real benefit in controlling orderly development, the tribunal route may not explain the project.