Restrictive covenant – Modification – Density restriction – Consent restriction – Application land being subject to restrictive covenant in favour of objector prohibiting erection of more than single dwelling house and requiring prior approval for development – Replacement house being built without objector’s prior approval – Applicant applying to modify – Whether practical benefits of restrictive covenant having substantial value or advantage – Effect of proposed new houses on the view from objector’s property – Whether tribunal should exercise discretion to modify restriction – Application granted conditionally
The applicant was the joint freehold owner of land at Church Street, Great Maplestead, Halstead, Essex which was formerly the site of a substantial house known as Treeways. The applicant purchased Treeways in 2006 but the house was largely destroyed by fire in 2011. In 2015 detailed planning permission was granted for a replacement dwelling and two further detached houses in what had previously been the garden of Treeways. The land was subject to a restrictive covenant in favour of the objector, who owned a nearby property, which prohibited the erection of more than a single dwelling house (the density restriction) and required prior approval to the plans of that house (the consent restriction).
The applicant applied for the modification of the restrictive covenant under section 84(1)(aa) and (c) of the Law of Property Act 1925. The issues for determination were: (i) whether the proposed use of the application land was reasonable; (ii) whether the restrictions impeded that use; (iii) whether, in impeding the proposed use, the restrictions secured practical benefits of substantial value or advantage for the objector; (iv) whether money would adequately compensate the objector for the loss of any practical benefits which were not of substantial value; and (v) whether, if all other issues were determined in the applicant’s favour, the tribunal should exercise its discretion to modify the covenants and, if so, whether it should do so on terms as to compensation or otherwise.
Held: The application was granted conditionally.
(1) The tribunal was satisfied that the use of land within the village boundary for the construction of houses, when that land was already surrounded on three sides by houses and was formerly the garden of one of them, was a reasonable use of the application land.
(2) The density restriction prevented the use of the land for more than one house and, given the presence of the replacement dwelling, it plainly impeded the development of additional houses. A covenant allowing a vendor a right of approval over the plans, design and materials of any building to be constructed on land sold was subject to an implied condition that such approval must not be unreasonably withheld; it might be that the more appropriate implication was a narrower one, namely, that the power of approval might not be used capriciously. As there were no grounds on which the objector could reasonably have refused consent to the construction of the replacement dwelling and, as the applicant had proceeded without consent, the consent restriction could not be said to have impeded the use of the land for the construction of that dwelling. However, the consent restriction was an impediment to the proposed use for further houses: Holland Park (Management) Ltd v Hicks [2013] EWHC 391 (Ch; [2013] PLSCS 66 considered.
(3) By impeding reasonable user, the density restriction secured practical benefits to the objector. However, considered individually and collectively, those benefits were not of substantial value or advantage. Nor was there anything in the restrictions that gave special weight to the short-term disturbance that was inherent in any building project.
(4) Although their value had not been assessed to be substantial, the benefits secured by the restrictions were not negligible. The presence of additional houses to the west would reduce the attraction of the objector’s property, limiting the sense of privacy and relative seclusion which the current comparatively open aspect provided. The additional use of the driveway would have the same effect. However, those practical benefits were not substantial and their loss could be adequately compensated in money. In the tribunal’s judgment, the value of the objector’s property would be diminished by 5% due to the loss of the practical benefits. Doing the best it could with the available evidence, the tribunal valued that property at £420,000; 5% of that figure was £21,000. It followed that the application under section 84(1)(c) had to be dismissed as the tribunal was satisfied that the objector would be injured, to an extent quantified as £21,000, by the modification of the restrictions.
(5) On balance, the applicant’s actions were not such that, having been satisfied that the ground under section 84(1)(aa) was made out, the discretion to modify the covenant should not be exercised. It was both reasonable and necessary that the future use of the replacement dwelling should be restricted to use as a single private residence and, given the objector’s concerns, that its use as a residential care home should be expressly prohibited by the introduction of a further provision under the power conferred by s 84(1C). If that provision was not accepted by the applicant, the application would be refused. Accordingly, the restrictions would be modified under section 84(1)(aa), provided that the applicant signified her acceptance of the proposed modification and paid the objector £21,000.
Andrew Bruce (instructed by Holmes & Hills LLP, of Halstead) appeared for the applicant; Rupert Higgins (instructed by Birkett Long LLP, of Chelmsford) appeared for the objector.
Click here to read a transcript of Hennessey v Kent
Eileen O’Grady, barrister
