Restrictive covenant – Modification – Estate – Applicants owning property subject to restrictive covenant prohibiting use for business purposes – Applicants obtaining planning permission for beauty salon in garden shed – Applicants applying to modify covenant to allow business use – Neighbours objecting – Whether covenant securing practical benefits of substantial value or advantage – Application dismissed
The applicants owned a house at 7 Larkin Avenue, Cottingham, which was located about four miles north west of Hull city centre and 4 miles south of Beverley, East Yorkshire where they wished to continue to conduct a beauty therapy business from a cabin in the rear garden. The property was on a modern residential estate and neighbours objected to the business use.
The property was a conventional detached two storey design, with brick elevations and a pitched, concrete tiled roof. The rear garden contained a wooden cabin with a mono pitch roof. It was connected mains electricity but had no central heating or a fixed water supply. Waste water was collected to irrigate the garden.
The transfer of the property to the applicants contained a restrictive covenant that: “No trade business or profession shall be carried out upon the plot and the plot shall not be used for any other purpose other than as one private dwelling”.
The applicants said they only became aware of the covenant when they were granted planning permission for commercial use of the cabin. They applied retrospectively under grounds (aa), (b) and (c) of section 84(1) of the Law of Property Act 1925 to modify the covenant to permit use of the cabin for their beauty therapy business.
The neighbours objected arguing that the proposed use was not reasonable and the covenant secured to them practical benefits of substantial value and advantage in upholding the prosperity, amenity and ethos of the estate and wider neighbourhood.
Held: The application was dismissed.
(1) Under ground (aa), the use for which planning consent had been obtained could properly be described as reasonable. Low level use of an existing building in connection with a small-scale business was generally consistent with a residential neighbourhood.
The covenant was not intended to prevent owners from occasionally working from home, alone on a laptop in a spare room. Such activity did not conflict with the covenant. A covenant against carrying on a trade, business or profession in a residential property did not prohibit all activity with a commercial purpose. Tasks which were consistent with ordinary residential use which were undertaken in connection with a business mainly carried on elsewhere were unlikely to be a breach. As the whole of the applicants’ business was conducted from the cabin in the garden, their continued use of the cabin for that purpose was impeded by the covenant.
(2) Whether the effect of the covenant in preventing the use of the property for the business secured a benefit for the objectors depended on the impact that use had on amenity. It was on that issue that the differences between the parties were most stark. The applicants regarded the noise generated by the business as unobtrusive and the parking of cars outside the property as nothing out of the ordinary in a residential estate. However, the objectors bemoaned a loss of privacy and became vexed by the traffic and parking arising from the business.
In granting planning consent for the change of use, the planning officer carried out a thorough appraisal of the amenity issues and concluded that any loss of amenity arising from the application would be acceptable. That was a reasonable conclusion from a planning perspective.
Nevertheless, the application before the tribunal was not solely concerned with the planning matters at the property itself and its immediate environs. The purpose of the covenants appeared to be to secure effective estate management by restricting changes to the use and appearance of the properties. The developer’s motives might have been to control what could be done to the houses whilst the development was ongoing, thereby avoiding anything that might harm the value of the homes yet to be completed, but the restrictions were also intended to have permanent effect and to bind all owners indefinitely.
Commercial uses that generated the level of parking seen outside the property over a significant portion of the day and over nearly every day of the week were prohibited by the covenant, whether they would be acceptable in planning terms or not. The covenant similarly prohibited commercial uses whether the noise or pollution they caused was below a threshold which was minimal, as in this case.
(3) Estates such as the present were not designed with those using part or all of their property for business purposes in mind. The density of development was such that any noisy or unsightly use of one property was likely to have an impact on the enjoyment of their homes by its neighbours. Modification of the covenant would remove the sense of certainty about what might be permitted in future and raise concerns about the loss of amenity that might follow.
The covenant protected aspects of the estate that should be maintained. It prevented activities that would, if left unchecked, significantly impinge on the amenity of the development and was the sole means by which that protection could be secured. It ensured the quiet enjoyment of the houses on the estate and underpinned their value. That was a practical benefit of substantial value or advantage. The requirements of section 84(1)(aa) were not satisfied and the tribunal had no jurisdiction to grant the modification: Shephard v Turner [2006] EGLR 73, George Wimpey Bristol Ltd v Gloucestershire Housing Association Ltd [2011] UKUT 91 (LC), Alexander Devine Children’s Cancer Trust v Millgate Developments Ltd [2019] EGLR, Martin v Lipton and others [2020] UKUT 8 (LC); [2020] PLSCS 7 and Alexander Devine Children’s Cancer Trust v Housing Solutions Ltd [2021] EGLR 1 considered.
(4) Even if those requirements had been satisfied, the tribunal would have been reluctant to lift a restriction which the applicants themselves had freely accepted less than ten years ago. The more recently a restriction had been imposed the stronger the case for modification.
As regards the alternative limb of ground (aa), in general terms it was in the public interest that property rights should be upheld.
The same could be said for their case under ground (c). Having determined that the covenant conferred practical benefits of substantial value on the objectors, it would be contradictory to conclude that they would not be injured by its modification.
The applicants appeared in person; Oliver Shipley (instructed by Andrew Jackson Solicitors LLP) appeared for the objectors; the third objector appeared in person.
Eileen O’Grady, barrister
Click here to read a transcript of Hodgson and another v Cook and others
