Restrictive covenants – Discharge or modification – Applicants owning property subject to covenant not to alter external appearance or construct additional buildings – Applicants proposing to erect single-storey rear extension and convert loft with rear dormer roof extension – Applicants applying to discharge or modify covenants – Whether covenant securing practical benefits of substantial value or advantage –Application for modification granted
The applicants owned a property at 4 Kerfield Place on the Selborne Estate, in Camberwell south London, which was developed in the early 1980s to provide semi-detached and terraced houses and blocks of flats. The property was a two-bedroom, two-storey, mid-terrace house within a cul-de-sac development.
The applicants wished to exercise permitted development rights to provide a single-storey extension to the rear, and a loft conversion with rear dormer roof extension, both of which would be in breach of a restriction preventing any alteration to the exterior appearance of the building and the construction of additional buildings. The restriction was contained in a 1984 transfer and was included for the benefit of the council and all other purchasers of lots within the scheme of development on the estate.
Around mid-2021 the applicants began to engage with their immediate neighbours about the proposed development. They all supported the proposal apart from the objector, who owned the adjoining property. After some e-mail exchanges the applicants proposed a deed of mutual release to the objector, who initially agreed to consider a limited release subject to payment of compensation. He also requested a party wall award.
An agreed surveyor made a party wall award, which the objector did not challenge. However, he stated that if work commenced, they would seek an injunction because of the restriction.
The applicants applied for the discharge of the restriction, or alternatively modification, under section 84(1) (a), (aa), (b) and (c) of the Law of Property Act 1925.
Held: The application for modification was granted.
(1) The burden of proof that a restriction had become obsolete under ground (a) was high and required a consideration of its original purpose. The 1984 transfer included typical provisions for a scheme of development, which created reciprocity of obligation and benefit. Although changes had been made to various properties within the estate, the changes in the character of the neighbourhood were not sufficient and so widespread that the restriction ought to be deemed obsolete. The overall purpose of the restriction in maintaining the general appearance of the estate was still relevant, and the application under ground (a) failed.
(2) The applicants submitted that there was evidence of express or implicit agreement to the discharge or modification of the restriction. The objector himself, in utilising and benefiting from his conservatory extension, had behaved as though the covenant was discharged or modified. However, the fact remained that one person with the benefit of the restriction had explicitly not agreed to it being discharged or modified. The objector’s agreement could not be inferred simply from his ownership of a property which breached the restriction. Moreover, although he was initially willing to agree to modification subject to payment of compensation, agreement was never reached. Ground (b) was therefore not satisfied.
(3) Section 84(1)(aa) was satisfied where it was shown that the continued existence of the restriction would impede reasonable use of the land for public or private purposes or would do so unless modified. By section 84(1A), where condition (aa) was relied on, the tribunal might discharge or modify the restriction if it was satisfied that, in impeding the suggested use, the restriction either secured “no practical benefits of substantial value or advantage” to the person with the benefit of the restriction, or that it was contrary to the public interest. The tribunal also had to be satisfied that money would provide adequate compensation for the loss or disadvantage (if any) which that person would suffer from the discharge or modification.
Section 84(1B) required the tribunal, when determining whether section 84(1A) applied, to consider the development plan and any declared or ascertainable pattern for the grant or refusal of planning permissions in the area. The tribunal was also required to take into account the period at which and context in which the restrictions were created or imposed and any other material circumstances.
When the restriction was imposed, it was for the benefit of all properties on the estate. It appeared that the restriction had been relatively effective in maintaining the integrity of the original building layout and appearance on the street-facing elevations. The restriction had been breached to the rear of the properties by conservatories and extensions under modern permitted development policy. The applicants’ proposals would follow that general pattern and have only a minor impact on the street-facing elevation. From the evidence of planning policy for permitted development and the grant of permission, the applicants’ proposed uses were reasonable. They were impeded by the restriction. Any other applications for modification would be considered on their merits.
(4) The purpose of the restriction was to limit changes to the appearance of the estate and prevent new buildings. The objector considered that the restriction protected his property from the risk of structural damage caused by the applicants’ proposals. However, the restriction could not be considered to secure the practical benefit of structural protection to the objector, because there was no evidence that it was intended to do so.
In any event, the objector could be indemnified against such cost and/or loss, by the party wall award and the Party Wall etc Act 1996. The applicants had gone further in offering to indemnify the objector against costs which might be awarded against him under the dispute resolution provisions of the 1996 Act. Accordingly, the restriction did not secure any practical benefits of value or advantage to the objector.
In all the circumstances, ground (aa) was made out and the tribunal had discretion to modify the restriction which impeded a reasonable use of the property and did not secure the persons entitled to the benefit of it any practical benefits. It followed that ground (c) was also made out because the proposed modification would not injure those persons.
The restriction would be modified to enable the applicants to exercise their permitted development rights, subject to the condition that in the event of a dispute arising such that section 10 of the 1996 Act applied, on the first occasion only, no application for costs should be made against the adjoining owners and any reasonable costs awarded against them should be reimbursed by the building owners.
The applicants appeared in person. The objector did not appear and was not represented.
Eileen O’Grady, barrister
Click here to read a transcript of Doherty and another v Pashkin
