knowledge 31 March 2026 |

Breaking the Covenant Gridlock: The High Court’s First Tackling of Section 50

This briefing examines the High Court’s first written judgment concerning the interpretation and application of Section 50 of the Land and Conveyancing Law Reform Act 2009 (the “2009 Act”) in GUIA Properties Limited v The Paddocks Killeline Management Company Limited by Guarantee and Nautic Building Company Limited (In Liquidation)¹. The judgment signals a pragmatic judicial willingness to lift outdated restrictive covenants where they stand in the way of policy‑driven development to alleviate housing shortages.

Background

GUIA Properties is the owner of servient lands situated at Rathnaneane, Newcastle West, County Limerick. The term ‘servient lands’ is used to describe land that is subject to a covenant(s) benefiting other land, being what is described as ‘dominant lands’. Under a 2016 Deed of Transfer, Paddocks Killeline Management Company and Nautic Building Company (“Nautic”) benefited from a covenant restricting the use of servient lands “for any purpose other than a single private or professional dwellinghouse with the usual out offices” (the “Covenant”).

In 2020, GUIA Properties obtained planning permission to develop the servient lands with the construction of 10 houses. However, the process has been paused due to the Covenant, and GUIA Properties applied to the High Court to discharge it pursuant to Section 50 of the 2009 Act.

The Legal Test

Section 50 of the 2009 Act allows for an application to court to discharge in whole or in part a freehold covenant on the ground that continued compliance with it would constitute an unreasonable interference with the use and enjoyment of the servient lands. Section 50(2)(a)-(i) of the 2009 Act lists the factors that a court is required to have regard as appropriate to in determining whether to make such an order, namely:

1. “the circumstances in which, and the purposes for which, the covenant was originally entered into and the time which has elapsed since then,
2. any change in the character of the dominant land and servient land or their neighbourhood,
3. the development plan for the area under the Act of 2000,
4. planning permissions granted under that Act in respect of land in the vicinity of the dominant land and servient land or refusals to grant such permissions,
5. whether the covenant secures any practical benefit to the dominant owner and, if so, the nature and extent of that benefit,
6. where the covenant creates an obligation on the servient owner to execute any works or to do any thing, or to pay or contribute towards the cost of executing any works or doing any thing, whether compliance with that obligation has become unduly onerous compared with the benefit derived from such compliance,
7. whether the dominant owner has agreed, expressly or impliedly, to the covenant being discharged or varied,
8. any representations made by any person interested in the performance of the covenant,
9. any other matter which the court considers relevant.”​

In his judgment, Nolan J noted that there is no relevant Irish case law on the interpretation and application of Section 50 but he did consider S v United Kingdom², a judgment of the European Court of Human Rights. In S v United Kingdom, the covenant restricting the use of the lands to “sporting, recreational and social activities” was not justifiable, given that there was no demand or interest to utilise the space for such activities. By contrast, the proposed new use for educational purposes was “concrete and real.”

Section 50(3) of the 2009 Act allows the court to award compensation where discharge or modification cause loss to the owner of dominant lands.

Reasoning of the Court

Nolan J listed out the following reasons for discharging the Covenant:

1. The Covenant was created for the commercial benefit of one of the defendants, Nautic;
2. No party sought to uphold the Covenant: neither of the defendants took part in the proceedings and the liquidators of Nautic adopted a neutral position;
3. The Covenant was only recently created;
4. Given the objectives in the Local Area Plan and the National Planning Framework the discharge or modification of the Covenant would be in the public interest;
5. Planning permission is in place, which would not have been granted for a single dwelling on the servient lands in accordance with the Covenant;
6. As part of the planning permission process, An Bord Pleanála (as it was then known) concluded that there will be no adverse impact on the “residential amenities of adjoining properties”;
7. The Covenant provides no benefit to the dominant lands given the accelerated development of surrounding lands – Nolan J cited that the Regional Spatial and Economic Strategy lists Newcastle West as a “Key Town” and the servient lands are zoned as a Tier 1 serviced residential land; and
8. The nearest neighbours have agreed to the discharging of the Covenant.

Court Order and Takeaways

Nolan J ordered the discharge of the Covenant in full.  In the Court’s opinion this struck a fair balance between the rights of the dominant landowners, the rights of the servient landowner to use and enjoy the land without reasonable interference and the public interest. He directed that the Order be registered in the Land Registry.

For property owners, developers and funders, this decision signals a pragmatic judicial willingness to lift outdated restrictive covenants where they stand in the way of policy‑driven development. It also creates a clear process for how to structure and evidence future Section 50 applications, which may be utilised to unlock value in otherwise sterilised servient lands.

Also contributed to by Borbala Gyenge