Land – Restrictive covenant – Obsolescence – Modification – Claimants applying under section 84(1)(a), (aa) and (c) of Law of Property Act 1925 for discharge or modification of covenants to enable full implementation of planning permission – Neighbouring house owners objecting – Whether development on part of burdened land rendering covenant obsolete – Whether original purpose of covenant still capable of being achieved – Whether practical benefit of substantial value or advantage secured – Application granted in part
A large parcel of land in Allestree, Derby was situated at the end of a narrow lane off the road known as Kings Croft, where three substantial houses called Merrieworth, Cranford, and Fermyn Wood stood on about two and three-quarter acres. A 1928 conveyance prohibited more than three houses on the land. In 1929, an additional parcel of land was sold, which also included a covenant restricting its development.
The claimants were the current owners of Fermyn Wood. In 2012 they obtained planning permission for the construction of three new detached houses at the southern end of their garden (units 1, 2 and 3). Two of the proposed houses were to be built on land burdened by the covenant in the 1928 conveyance and would breach the maximum number of houses (three) permitted by that covenant. The third property would be on that part of the garden of Fermyn Wood burdened by the covenant in the 1929 conveyance.
The claimants applied to the Upper Tribunal under section 84(1)(a), (aa) and (c) of the Law of Property Act 1925 for the discharge of the 1928 and 1929 covenants, or their modification to enable the planning permission to be fully implemented. The local planning authority accepted that a sufficient start had already been made on the development to prevent the permission from expiring, although no works were visible on site. The objectors were owners of houses which directly adjoined the garden of Fermyn Wood.
Held: The application was granted in part.
(1) If the character of an estate gradually changed and the purpose of a covenant could no longer be achieved, the covenant might become obsolete, because its original purpose could no longer be served and it was in that sense that the word “obsolete” was used in section 84(1)(a). However, if serious injury would result to the opponents and others if the covenant was discharged, the covenant was not obsolete because the object of the covenant was still capable of fulfilment, and the covenant still afforded a real protection to those entitled to enforce it. In determining whether a covenant could be discharged under ground (a) it was necessary to: (i) identify the purpose or object of the covenant, which might be stated in the instrument imposing the restriction or inferred from the nature of the restriction or from the known circumstances; (ii) ask whether the character of the property or the neighbourhood had changed since the covenant was imposed; (iii) ask whether the restriction had become obsolete by reason of those changes, in that the object of the restriction could no longer be achieved; and (iv) ask whether some material circumstance other than a change in the character of the property or the neighbourhood had had that effect: Re Truman Hanbury & Buxton & Co Ltd’s Application [1956] 1 QB 261 followed.
(2) In the present case, the 1929 covenant did not impose an absolute prohibition on building on the land conveyed. Its object appeared to have been to regulate and restrict the development of the land according to a particular principle, rather than to inhibit it completely. That principle permitted the development of the land for housing on condition that the southern boundary had a frontage to a public road, but did not otherwise seek to control the design or density of development. Whatever the precise thinking behind the restriction, it was clearly not designed to prevent the construction of a house or houses on the land provided they could have access to a public road in a particular location. The changes which had occurred since 1929 had significantly eroded the protection which the restriction was intended to achieve. The circumstances in which the covenant was imposed were radically different to the current circumstances in which it operated. It was in those radically different circumstances that the continued utility of the restriction had to be judged. The purpose of the 1929 covenant, namely the imposition of a pattern of access to the land which was no longer possible, and which was no longer observed, could no longer be achieved. Development had occurred in breach of the covenant and according to a different pattern. The 1929 covenant could properly be deemed to be obsolete.
(3) The purpose of the 1928 restriction was more obvious, namely, to maintain low density development on the boundary of the field. On the evidence, the character of the locality had changed since 1928. The sole exception to that change was the land conveyed in 1928 which retained its character as the site of large detached houses, well separated from each other and standing in large gardens. The purpose of the covenant was to restrict the density of housing on the land to the west of the field sold to the developer. That purpose had been achieved and no development inconsistent with the restriction had occurred since the covenant was imposed. Although substantial changes had occurred in the land benefitted by the restriction, the restriction was still of some utility to the owners of the benefitted land. Therefore, the 1928 covenant had not been rendered obsolete.
(4) As regards ground (aa), by impeding the proposed development, the 1928 restriction did not secure to the objectors any practical benefits of substantial advantage. The court had heard no expert evidence about whether the proposed development would devalue the objectors’ properties. However, there would be a small additional effect on the value of two neighbouring properties caused by the relative proximity and visibility of two new units. Each property would be reduced in value by £7,500 and compensation would be awarded accordingly. Accordingly, the 1928 covenant remained in force but would be modified under ground (aa) to allow the development of units 1 and 2.
(5) The application under ground (c) failed since there was injury to neighbouring properties for which compensation was payable.
Paul Letman (instructed by Actons Solicitors, of Nottingham) appeared for the claimants; The objectors appeared in person.
To read a transcript of Adams and another v Sherwood and others, click here.
Eileen O’Grady, barrister