Re Holden’s Application [2018] UKUT 21 (LC); [2018] PLSCS 13 concerned a relatively new development. The owner of one of the properties, situated on probably the largest plot, with a generous parking provision, had converted his garage for use as a dog grooming parlour despite restrictive covenants (which he had entered into less than four years previously) prohibiting him from doing so.
None of the landowner’s neighbours complained about the use that he was making of his garage. And they did not object when he applied for the restrictions to be discharged, relying on grounds (a) and (c) of section 84(1) of the Law of Property Act 1925.
Ground (a) is appropriate when covenants are obsolete. And, because there had not been any significant change in the character of the neighbourhood since the imposition of the covenants less than four years previously, and the purpose of the restrictions (which was to prevent a residential estate from becoming a mixed-use area) could still be achieved, the application under ground (a) was refused.
Ground (c) looked more promising. It applies where the proposed discharge will not injure the persons entitled to the benefit of a covenant. The applicant had obtained planning permission for the use that he was making of his garage and there had not been any objections from neighbours. Both these factors suggested that no one had been, or would be, injured if the use were to be allowed to continue.
But what of the fact that the applicant had knowingly used his land in breach of the restrictions? Millgate Developments Ltd v Smith [2016] UKUT 515 suggests that a tribunal will refuse to reward applicants who have flouted their legal obligations. The tribunal considered that this case was very different, especially as no one had objected to the application, and the judge did not believe that the applicant should be punished for applying retrospectively to regularise the position.
One of the common reasons for refusing an application under ground (c) is that the discharge of the restrictions would constitute the “thin end of the wedge” and set a precedent that would encourage further applications. Was this a risk here? The property was situated at the entrance to the estate. Only a handful of the other houses on the estate possessed similar garages and the applicant’s business use was not intensive. So the judge was satisfied that the use need not represent a threat to the scheme of protection afforded by the covenants.
Even so, the judge refused to discharge the restrictions entirely on the ground that to give the applicant or his successors carte blanche for any business use would be much more likely to cause injury or disturbance to neighbouring owners. However, he did agree to modify the covenants – but only to the extent required to enable the applicant’s current use to continue and on condition that the modification would be personal to the applicant. So, when the property was sold, the garage would have to be returned to domestic use.
Allyson Talbot
