Restrictive covenant – Application for modification – Section 84(1)(aa) of Law of Property Act 1925 – Applicants seeking modification of restrictive covenant to permit residential development – Development commencing prior to hearing of application – Whether restriction securing practical benefits of substantial value or advantage to those entitled to its benefit – Application dismissed
The first applicant developer owned an area of land (the application land) on the edge of Prestbury, near Cheltenham, on which it proposed to construct 17 residential units and seven garages as part of a larger residential development for which planning permission had been granted in 2006. The development included affordable housing, which the first applicant transferred to the second applicant housing association. The application land was subject to a restrictive covenant, contained in a 1936 conveyance, prohibiting the erection of any building. Prior to the development, it had been laid to rough grazing and contained a small area of woodland, although, over the years, the land to the west and south had seen substantial residential development. The owners of many of those residential properties were entitled to the benefit of the restrictive covenant. When the first applicant began construction work on the application site, and continued in spite of a solicitor’s letter drawing its attention to the restrictive covenant, two of them brought proceedings for an injunction to restrain the applicants from building on the application land.
Those proceedings were stayed pending the applicant’s to modify the restrictive covenant so as to permit the development. The applicants contended that the covenant fell within the ground in section 84(1)(aa) of the Law of Property Act 1925 as being a restriction that impeded a reasonable user of the application land and did not afford to persons entitled to its benefit any practical benefits of substantial value or advantage. In support of their case, the applicants submitted that their development accorded with the historic pattern of development in the area, development plan policies and the 2006 planning permission. Numerous local residents who had the benefit of the restriction objected to the application on grounds that included disturbance during construction works, loss of openness and overall amenity and reduced property value.
Decision: The application was dismissed.
The development could not be said to be an unreasonable user of the land in the light of the 2006 planning permission and the advice of planning officers in respect of the density thresholds for new residential development set out in PPG 3. It was agreed that the covenant impeded that user and that, in doing so, it secured practical benefits to the objectors. On the evidence, those benefits were of substantial advantage. In respect of some of the objectors’ properties, the development would result in a change from a semi-rural location with views over open land to a largely suburban character, with a resultant loss of views, privacy and overall amenity. That would also result in a loss of value of those properties of between 7.5% and 15%. Accordingly, the applicants had not made out the ground in section 84(1)(aa).
Per curiam: Even if the applicants had made out their ground, it was unlikely that the tribunal would have exercised its discretion to modify the covenant. The extensive works that the first applicant had carried out on the application land were not an inadvertent action resulting from the discovery of the covenant at a late stage in the development programme, they resulted from a deliberate strategy of forcing through the development on the restricted land in the face of objections from those entitled to the benefit of the restriction, to the point where they had so changed the character and appearance of the application land that the tribunal would be persuaded to allow them to continue. The tribunal was not inclined to reward parties that deliberately flouted their legal obligations in that way.
Andrew Francis (instructed by Shulmans LLP, of Leeds) appeared for the applicants; Edward Peters (instructed by Lyons Davidson, of Bristol) appeared for three of the objectors; Martin Cotter, an objector, appeared in person; Geoffrey Day, an objector, appeared on behalf of the remaining objectors with the permission of the tribunal.
Sally Dobson, barrister
