Restrictive covenants –– Application to modify –– Grounds (a), (aa) and (c) –– Construction of covenant –– Whether requirement for approval of plans applied to extension to original building –– Whether grounds made out –– Determination of compensation payable
The applicants sought the discharge or modification of a restrictive covenant to permit the erection of an extension to their dwelling-house in accordance with a planning permission granted on appeal. The restriction was contained in a conveyance of 1969, when the plot on which the dwelling was later erected was sold out of the garden of the adjoining property. The covenant stipulated, inter alia, that no house or other building should be erected until plans and specification had been submitted to and approved by the vendors or their successors in title. The primary submission on behalf of the applicants was that the stipulation did not apply to any extension to the original dwelling-house, or, if it did, a term had to be implied that approval could not be unreasonably withheld and that a refusal based on loss of light would be unreasonable. In the alternative, they relied on the grounds in paras (a), (aa) and (c) of section 84(1) of the Law of Property Act 1925. The successor in title to the original vendor objected to the application, contending that her property would be reduced in value by between £32,500 and £65,000.
Decision: The application was allowed under para (aa) and compensation of £10,000 was awarded. The requirement to obtain approval to the plans and specifications applied as much to an extension of any house or other building erected on the plot as to the original construction of such house or building, and approval could not be unreasonably withheld: Cryer v Scott Brothers (Sunbury) Ltd (1988) 55 P&CR 183 applied. The effect of an extension on the adjoining property in terms of daylight and sunlight was within the terms of the covenant. The covenant was not obsolete within the meaning of para (a) of section 84(1). The covenant impeded a reasonable user and conferred a practical benefit on the objector as owner of the adjoining property; however, the effect on the value of the property was only 11.5%, or £10,000, and this was not of substantial value or advantage within para (aa) of section 84(1) in respect of a property worth £650,000. Ground (c) was not made out.
The following cases are referred to in this report.
Cryer v Scott Brothers (Sunbury) Ltd (1988) 55 P&CR 183
North’s Application, Re (1998) 75 P&CR 117
Stockport Metropolitan Borough Council v Alwiyah Developments (1983) 52 P&CR 278
Michael Humphries (instructed by Sheridans) appeared for the applicants; Anthony Radevsky (instructed by GSC Solicitors) represented the objector.
Giving his decision, Mr George Bartlett, QC, President, said: This is an application by Mr Adil Jilla and Mrs Husna Jilla under section 84 of the Law of Property Act 1925 seeking the discharge or, alternatively, the modification of a restrictive covenant affecting land in their freehold ownership at 138 Hainault Road, Chigwell, Essex. The land previously formed part of the garden of 136 Hainault Road, but was sold to the applicants’ predecessor in title under a conveyance dated 4 July 1969. Under the conveyance, the purchaser covenanted for himself and his successors in title, for the benefit of the vendor’s property at 136 Hainault Road, to observe and perform two stipulations as follows:
1. Not more than one dwellinghouse with suitable garage and other ancillary buildings shall be erected on the land.
2. No house or other building shall be erected until the plans and specifications thereof have been submitted to and approved by the Vendors or their successors in title so far as relates to the external appearance of the said building.
A house was duly built on the land conveyed, which was bought by Mr and Mrs Jilla in 1993. In 1997 they applied for planning permission to extend the house, in the way that I shall later describe, on its northern side, that is, the side next to 136 Hainault Road. Planning permission was refused, against the recommendation of the planning officer, but was granted on the basis of written representations in an appeal decision dated 16 September 1998.
The applicants now seek the discharge of the second restriction or, alternatively, its modification, so as to permit the extension that has been granted planning permission. The application is objected to by Mrs Benita Melbourne, the successor in title to the covenantee. She and her husband have lived in 136 Hainault Road since purchasing it 27 years ago.
Although the tribunal ordered the parties to agree a statement of facts, they did not do so. I can, however, describe the dominant and servient tenements and the surroundings in the light of the evidence and the view that I had on 26 October 1999. Nos 136 and 138 lie on the east side of Hainault Road, the A123, close to its junction with Manor Road, the B173. No 136 comprises a cottage-style six-bedroom house constructed about 70 years ago on ground, first and attic floors on a plot with a frontage of 62ft, a depth of 200ft and an area of 0.285 acres. It is set back from the road by approximately 47ft, and there is an in-and-out driveway with a garage on the northern side. On the southern side, adjacent to no 138, is what appears to be a garage, but is in fact a family room/sun lounge behind a false garage door. It extends the full depth of the house, and has a French window to the garden at the rear. Access to it is gained from the sitting room, which is alongside it. There are two steps down roughly in the middle, with the remains of a partition that was formerly glazed. Along virtually the full length of the room, on its south side, are windows fitted with patterned glass. The fence dividing no 136 from no 138 is about 1.5m high and stands rather over 1m from the wall of the family room/sun lounge. Opposite the western third or so of the room, and on the same line as the fence, is the garage wall of no 138, about 3m high. On the first floor, the principal bedroom has
No 138 is a three-storey house standing on a plot that is the same depth as the plot of no 136, but is slightly narrower. The house is built in brick, with a white portico and a gabled roof that rises to a single apex. It has a garage that is attached to it on the north side and is built on the boundary with no 136. The front of the house projects 3m forward of the front elevation of no 136. The proposal is to build a first floor over the garage, extending it by 1m at the front and 2m at the rear. The northern gable would be reconstructed 3.5m from its present line to cover the extension, with the roof apex being extended into a ridge.
In the vicinity of the subject land, Hainault Road is developed on both its sides with large detached houses, set back from the road, of a similar size and on plots of similar dimensions to those of nos 136 and 138. The gaps between the houses are, almost universally, very narrow. In 1969, when the plot of no 138 was sold off, the pattern of development was less regular. In the section of the eastern side between nos 130 and 146 (even), it appears that four of the houses now existing (including no 138) have been built since then, in each case by the subdivision of a plot where there was a substantial gap in the frontage. Other gaps have been filled on the western side, and a number of houses have been extended.
Mr Michael Humphries, who appeared for the applicants and called Mr John Brian Newton FRICS and Mr Sinclair Frydland BSc (Est Man) FRICS, put his submissions as follows. On ground (a) he submitted that the two covenants, 1 and 2, should be read together, so that “house” in 2 is to be related to “dwellinghouse with suitable garage” in 1, and “other building” in 2 is to be related to “other ancillary buildings” in 1. The applicants’ proposed extension was not the erection of a house or of another building, but an addition or alteration to a house. As such, it was not subject to covenant 2. The covenant could have been worded to include an addition or alteration, but it had not been, and it should not be construed as though it had been. Moreover, the 1969 conveyance required the purchaser to observe the covenants to which the vendors were subject under a conveyance of 1922. Those covenants included the following:
5. No building or erection shall be built or erected upon the property except in accordance with plans and elevations and specified to be submitted to and approved by the said surveyor (such approval being expressed in writing… No addition or alteration to or in any building or erection for the time being standing upon the property shall at any time be made without the consent in writing of the said Surveyor but such consent shall not be unreasonably withheld.
Construction of the 1969 covenants in the light of this provision compelled the view, said Mr Humphries, that they were not intended to cover additions and alterations, which could have been mentioned but were not. The result was, he said, that covenant 2 was now spent in relation to the house that had been erected, and was to that extent, therefore, obsolete. Second, under ground (a), Mr Humphries submitted that, by reason of changes in the character of the neighbourhood, the restriction ought to be deemed to be obsolete. Those changes were that, since 1969, many of the properties in the neighbourhood had been extended and separate dwellings had been erected in their former grounds. On this basis, discharge of the covenant would be appropriate, but if it were not discharged it should be modified.
On ground (aa), Mr Humphries submitted that the proposed user was clearly reasonable in view of the grant of planning permission and that, subject to his submission on ground (a), the restriction impeded that user. The effect of the extension on no 136, in terms of its visual impact and any loss of daylight and sunlight, was so small that the restriction could not be said to secure to Mrs Melbourne any practical benefit or, if it did so, the benefit was not one of substantial value and advantage. He relied in this respect on the evidence of Mr Newton and Mr Frydland, to which I will refer later, and on the inspector’s conclusions in the appeal decision. Mr Humphries submitted further that the loss of daylight and sunlight, which constituted Mrs Melbourne’s principal concern, was not a matter on which she could refuse consent under the covenant, since that was confined to the external appearance of the house or other building (or, in other words, the way it looked). There must also, he said, be implied a term that approval was not to be unreasonably withheld, and he referred to Cryer v Scott Brothers (Sunbury) Ltd (1988) 55 P&CR 183. A refusal based on loss of light would be unreasonable. Finally, as to compensation, Mr Humphries said, relying on Mr Frydland’s evidence, that there was no loss or disadvantage, and thus no compensation was payable. Alternatively, if there were such loss or disadvantage, compensation should properly be measured in terms of the cost of putting a window in place of the garage door in the west wall of the family room to provide extra light. The cost of this, according to Mr Newton, would be £1,000, and, according to Mr Shapiro, for the objector, £2,500. The covenant should, accordingly, be modified by the addition of the words:
This covenant shall not apply so as to prevent or restrict the erection and use of an extension to the said house in accordance with planning permission granted on 16 September 1998 under application ref EPF/1434/97.
On ground (c), Mr Humphries submitted that the proposed modification would not injure Mrs Melbourne because (as he had submitted earlier) the covenant did not relate to extensions or, alternatively, did not allow Mrs Melbourne to refuse consent on the basis of loss of light. If, however, loss of light was a material matter, the loss of light was so slight that it would not constitute injury.
Mr Newton’s evidence was principally directed to planning considerations. He relied particularly on the report of the planning officer to the council when they refused permission, and on the inspector’s decision letter, which said:
it is my judgment that the proposed development would not increase the mass of No 138 to such an extent that it would thereby have any detrimental effect upon its neighbour to the north. As for interference with the daylight currently enjoyed by that dwelling, it seemed to me on my inspection that the ground floor conservatory and former garage attached to No 136 would be the room that would be most affected. That room presently enjoys daylight through three obscurely glazed windows in its southern flank wall and through clear glazed windows in its eastern elevation. I consider there could be some loss of daylight through the glazed windows but, as a matter of degree, I would not expect it to be significant. I do not consider there would be any loss of daylight through the clear glazed windows. In my judgment. therefore, the proposed extension would not be detrimental to this or any residential amenity of its neighbour.
The inspector, said Mr Newton, had reached his decision in the light of the policies in the Epping Forest district local plan. Mr Newton referred to changes in the character of the area since 1969, brought about by the building of additional houses and the extension of existing ones. His conclusion was that the proposed extension would not cause damage to the area, that the objection had already been addressed through the planning process and that the restriction should, accordingly, be modified or discharged. He did not, however, address himself to section 84 or to the constituents of the particular grounds upon which modification was sought.
Mr Frydland, who adopted a report originally prepared in the name of his partner, Mr Raven, said that there was likely to be a minimal loss of light to the side windows of no 136 at first-floor level. He had not inspected the inside of no 136. He thought that at ground-floor level, although there would be loss of light to what he referred to as “the existing garage and extension”, the window at the rear would provide adequate light. He considered that the improvements to no 138 would increase the value of no 136, and that this would outweigh the loss of value, which he thought was nominal only, due to the loss of light.
For the objector, Mr Anthony Radevsky took issue with Mr Humphries’ submissions on the interpretation of covenant 2. He submitted that Cryer supported the contention that the restriction covered extensions. Whether there was to be implied a covenant that consent was not to be unreasonably withheld was not, he said, for the Lands Tribunal, and he relied on Re North’s Application (1998) 75 P&CR 117. He called Mr Eric Frank Shapiro BSc (Est Man) FRICS IRRV, senior partner in Moss Kaye & Roy Frank, surveyors and
Mr Harris gave evidence, on the basis of his experience, on the loss of daylight and sunlight that the extension would occasion. His conclusion was that there would be a substantial impact on the family room (or, as he called it, the conservatory). The front part of the conservatory at least would be affected quite significantly in terms of daylight, and the whole of the conservatory would definitely lose sunlight. The use and enjoyment of the conservatory would therefore be affected to a noticeable extent.
Mrs Melbourne said that she was horrified by what was proposed. The extension would shut out views of trees and sky from the first-floor bedroom, reducing a bright, airy room to a dull, closed-in one. The front half of the sun lounge/conservatory would lose nearly all its natural light and the entire room would be cast in shadow. She made clear that she was not interested in compensation, but was concerned to be able to exercise her rights under the covenant.
Mr Humphries’ submissions raise three points on the construction of the covenant that require consideration before I deal with each of the grounds upon which reliance is placed. They are:
(i) does the covenant apply to extensions or alterations to a house or other building that has already been constructed?
(ii) if so, is there to be implied a term that approval shall not be unreasonably withheld?
(iii) if so, is loss of light a ground upon which approval could lawfully be refused?
I will deal with each of these questions in turn.
In addressing these questions, I bear in mind the nature of the action embodied in the conveyance. The vendor was selling part of his garden so that a house could be erected on the land sold; and, because of the size and shape of the plot and the pattern of development in the area, the house would inevitably be built very close to the vendor’s house and have an impact on it. On question (i), I am in no doubt that the requirement to obtain approval to the plans and specifications applies as much to an extension of any house or other building erected on the plot as to the original construction of such house or building. The purpose of the covenant was, in my view, to afford the vendor protection against a house or other building that would impact unacceptably on his own house. If it were open to the purchaser, having obtained the vendor’s approval to the plans and specifications of a house, and having built the house in accordance with those plans and specifications, to extend the house some time later by the construction of an additional storey or a lateral extension across the garden, the purpose of the covenant would be, to a very considerable degree, frustrated. I do not think that covenant 5 in the 1922 conveyance, upon which Mr Humphries relied, is of any assistance in construing covenant 2 in the 1969 conveyance. The drafting is so different that it would be unreasonable to conclude that the draftsman of the 1969 conveyance had any regard to the earlier covenant, in terms either of its wording or of its content.
The words used in the covenant to which the application relates –– “No house or other building shall be erected…” –– are, in my view, apt to cover the erection of part of a house or other building. Support for this construction is to be derived from Cryer. There, the conveyance of a plot of land contained the following covenants, among others:
1. Only detached houses may be erected on the land hereby transferred but semi-detached houses may be erected in special cases with the consent in writing of the Transferors covering an area on such plots as may be agreed by the Transferors.
…
4. All building or other plans are to be submitted to the Surveyor of the Transferors for their approval before building work is commenced and only one dwellinghouse or other building shall be erected on each plot.
…
9. No building of any kind is to be erected within a distance of twenty-five feet from the front boundary of any plot.
The Court of Appeal rejected the convenantor’s argument that covenant 4 applied only to the original building and did not apply to an extension of a house already built. Slade LJ, with whom Waite J agreed, disagreed with the trial judge’s conclusion that none of the covenants relating to operational work on the land were capable of applying to the extension of a house already built. He said at p191 that covenant 9 seemed to him:
well capable of applying to such an extension. If, for example, a covenantor were to extend his existing house by erecting a bay window which infringed the building line restriction imposed by covenant no 9, I think he would be in breach of that restriction…
The Cryer case also provides assistance in relation to question (ii). The court rejected the submission of counsel for the covenantee that covenant 4 was to be read as it stood, and that no provision that consent should not unreasonably be withheld was to be implied. At p195 Slade LJ said:
For my part, I cannot accept this submission. I prefer to express no view as to the construction of the other covenants contained in the 1955 transfer, upon which no decision is required, but to base my judgment simply on the wording of the particular covenant now before us, read in its context. If the construction of covenant no 4 suggested by counsel on behalf of the defendants were correct, this would mean that covenantees could have been in the position, by the arbitrary and capricious withholding of approval of building plans, wholly to have prevented a development of the estate by the covenantors. This cannot, in my judgment, have represented the intentions of the parties to the 1955 transfer. The contemplation of both sides was clearly that the land to be transferred would be developed by the transferees. The reservation of a right arbitrarily to withhold approval of the plans would have been liable to defeat the purpose of the grant. If the absence of a provision expressly precluding the covenantees from unreasonably withholding their approval had been pointed out at the time to both parties to the 1955 transfer, I think that, assuming them to have been reasonable persons, they must have agreed without hesitation to its insertion. The implication is, in my opinion, necessary to give business efficacy to covenant no 4.
That reasoning applies with equal force, in my view, to the present case. Mr Radevsky was disposed to accept that some term would need to be imported in order to disable the covenantee from frustrating the purpose of the transaction, which was to enable a house to be built on the land conveyed. He suggested, however, that the implied term would simply require good faith on the part of the covenantee, rather than reasonableness. I cannot accept this suggestion, although, in practice, I suspect that in the present case there would be little difference in the sort of provision that Mr Radevsky suggests and the conventional provision, founded upon the need to give business efficacy to a contract, that approval should not be unreasonably withheld. It is this latter provision that, in my view, should be implied.
Re North, upon which Mr Radevsky relied, is not authority for the proposition that I have no power, in the context of the present application, to consider whether a provision should be implied in the covenant. The member in that case was apparently being asked to say whether a term that consent should not reasonably be refused could be implied in the covenant, even though it was not necessary that he should do so for the purpose of determining the application before him. The decision is not authority for the proposition that the tribunal has no jurisdiction to determine whether such a term is to be implied even where that question is germane to the issues arising on the application. Indeed, it is, I think, self-evident that the tribunal must determine the meaning of the restriction to the extent that that is necessary to enable it to determine the application before it, and any terms to be implied by the wording of the restriction are part of its meaning.
On question (iii), Mr Humphries’ submission, as I have said, was that “external appearance” in the covenant relates only to what the building looks like and does not embrace considerations of daylight and sunlight. It is certainly the case, in my view, that the words could, in an appropriate context, be so confined in their meaning. The familiar words in the Town and Country Planning (Application) Regulations 1998, Regulation 2, identifying potential reserved matters on a planning application (“(a) siting, (b) design, (c) external appearance”) would, in that context, suggest such a confined meaning. In the present case, on the other hand, the purpose of the covenant was, as I have said, to afford the vendor protection against a house or other building that would impact unacceptably on his own house. I agree with Mr Radevsky that the addition of the words at the end, “so far as relates to the external appearance of the building”, are really intended to prevent the vendor interfering with the interior design of the buildings. Thus, the effect of an extension of no 138, in terms of the daylight and sunlight received by no 136, is within the ambit of the covenant, in my judgment.
Having established the meaning and scope of the covenant, I turn to the grounds upon which discharge or modification is sought. On ground (a), Mr Humphries, as I have noted, put his case in two ways. First, he said that since, as he submitted, the covenant only applied to the erection of the original house and not to its extension, the covenant is spent as concerns the erection of the house and should be discharged or modified accordingly. This contention necessarily falls with my rejection of Mr Humphries’ submission on the construction of the covenant. I have concluded that it does apply to an extension, and, accordingly, it has not become obsolete in the way suggested.
The second way in which Mr Humphries put his case on ground (a) was that changes in the character of the area have made the restriction obsolete. Those changes consist, he said, in the additional houses in Hainault Road and the alteration of other houses. I can dispose of this contention very shortly. The purpose of this covenant, to afford protection against a house or other building that would impact unacceptably on no 136, is clearly still capable of fulfilment. The extension of no 138, or its rebuilding, or the erection of some new ancillary building, could clearly impact adversely on no 136, given the immediate proximity of the two houses. The fact that changes have taken place elsewhere in the area does not affect this potential for adverse impact or the power of the covenantee to prevent it by enforcing the covenant. Ground (a) is not made out.
On ground (aa), it is common ground that the proposed user is reasonable. I have no doubt that Mrs Melbourne is able, under the terms of the covenant, to refuse to approve the plans for the proposed extension. It would undoubtedly increase the bulk of no 138 as perceived from her house, and it would have some adverse impact in terms of daylight and sunlight. In enabling her, by refusing to approve the plans, to prevent the extension being built, the covenant therefore both impedes the reasonable user and confers a practical benefit upon her. The key question is whether this benefit is one of substantial value or advantage.
Mr Shapiro identified five adverse effects that, he said, the extension would have. First, he said, the open aspect from the flank windows of the principal bedroom would be significantly reduced. I have no doubt that Mrs Melbourne would notice the change to a familiar outlook. The effect of the extension would be to bring the first floor wall of no 138 and the roof line about 3.5m nearer, reducing the distance wall-to-wall to 6m. The apparent height of the roof of no 138 would be increased. The bathroom window in no 138, which, in Mrs Melbourne’s view, breaks up the facade, would be removed. Overall, however, these changes, though adverse, would not, in my view, be of great significance, and the removal of the window and, with it, the potential for overlooking, would probably be considered by most people to be an advantage.
The second adverse effect claimed by Mr Shapiro was that the sunlight entering the bedroom would be significantly reduced. Mr Harris’s expert evidence, however, on behalf of Mrs Melbourne, was to the contrary. He said that there might be a small loss of sunlight to the bedroom, but he doubted whether the impact would be significant. I accept this appraisal.
Mr Shapiro’s third adverse effect was that: “No 136 will be crowded within its boundary with a high flank wall overshadowing it”. Viewed from inside the house, I do not think that impression would be gained. I have dealt with the views from the bedroom. The windows in the south wall of the family room are patterned so as to reduce visibility in and out, and I do not think that the impression gained would be as severe as Mr Shapiro implies. Outside, the narrow passageway alongside the family room is at present flanked for part of its length by the 3m high garage wall of no 136 and by a fence 1.5m high with foliage above it. The proposed extension would be slightly set back on the first floor. While the extension would have some impact when viewed from the passageway and from the front of the house beyond, it would not, in my view, have the degree of impact that Mr Shapiro suggests.
The fourth effect referred to by Mr Shapiro was that there would be loss of light and sunlight to the family room. Mr Harris’ evidence was that the daylight available to the rear section of room through the south windows would definitely be diminished, but that the room would remain adequately lit, in the sense that the loss of light would not be actionable in common law terms. The same would go for the front section, but if the two sections were to be divided into separate rooms, the front section would suffer significant loss of light from the extension. Sunlight would be reduced throughout most days, although at midsummer there would be no effect. Mr Harris accepted that if a window were introduced into the west wall of the room, where at present there is what appears to be a sealed-off garage door, adequate light to the front section would be provided. Mrs Melbourne said that she did not want to have a window in that wall.
It is clear that the extension would reduce the amount of daylight and sunlight received by the family room through the south windows. Those windows are, as I have said, of patterned glass, and face, across a narrow passageway, in part, a wall 3m high and, in part, a 1.5m fence. The loss of daylight and sunlight would not, in my judgment, be insignificant, but it would not reduce the enjoyment or utility of the room to any substantial extent.
The fifth effect referred to by Mr Shapiro was the loss of secondary light to the reception room. This room lies alongside the family room and shares a common wall with it. There is a window in the middle of this internal wall. Some light from the external windows of the family room windows is received through it by the reception room. The loss of light to the reception room, which, it was suggested, would be suffered, was not a matter that Mr Harris even referred to, and I do not think that the extension would have any significant effect in this respect.
Mr Shapiro, as I have said, thought that the current value of no 136 was in the region of £650,000, and there is no evidence to cause me to doubt this estimate. In the light of the effects he had identified, he thought that the extension would reduce the value of the house by between 5% and 10% (£32,500 to £65,000). Mr Frydland thought that the house would suffer a diminution in value due to the loss of light, but that it would be a nominal amount only and would be offset by the beneficial effect that the improvement to no 138 would have. I am unable to accept that the proposed changes to no 138, which, in its present form, is of a size and character consistent with the other houses in Hainault Road, would have any beneficial effect on no 136, as Mr Frydland claims. The effect of the extension would, in my view, only be adverse. I am also unable to accept that the measure of the loss suffered by Mrs Melbourne is to be found in the cost of inserting a window in the western end of the family room to compensate for the daylight that would be lost. The adverse effects of the extension go beyond the loss of daylight to this room. On the other hand, Mr Shapiro has, in my judgment, greatly overestimated the reduction in value that the extension would cause. I consider that £10,000 (or about 1.5% of the value of the house) would be a fair estimate of this reduction in value, and I believe that it represents the measure of the benefits secured to Mrs Melbourne by her right under the covenant to prevent the extension from being built. Those benefits are not, in my
On ground (c), it follows from my conclusions on ground (aa) that the proposed modification would injure Mrs Melbourne, and that ground, therefore, is not made out.
I can see no reason why, in the exercise of my discretion, the covenant should not be modified so as to enable the extension to be built. I therefore order that the restriction should be modified by the addition at the end of the words:
This covenant shall not apply so as to prevent or restrict the erection and use of an extension to the said house in accordance with planning permission granted on 16 September 1998 under application ref EPF/143/97.
I direct that the applicants pay to the objector by way of consideration the sum of £10,000.
What I have said so far concludes my determination of the substantive issues in this case. It will take effect as a decision when the question of costs is decided, and at that point, but not before, the provisions relating to the right of appeal in section 3(4) of the Lands Tribunal Act 1949 and Ord 61 r 1(1) of the Civil Procedure Rules will come into operation. The parties are invited to make submissions as to the costs of this reference, and a letter accompanying this decision sets out the procedure for submissions in writing.
Addendum on costs
I have received written submissions on costs. The applicants ask for their costs on the basis that they have successfully achieved the modification of the restriction, and that, although they were unsuccessful on grounds other than (aa), pursuit of those grounds did not materially lengthen the hearing. They point out that £10,000 compensation was awarded, as against the objector’s contention that it should be at the upper end of Mr Shapiro’s range of £32,500-£65,000. They had, moreover, twice made a Calderbank offer of £3,000, which had been rejected. They refer to Stockport Metropolitan Borough Council v Alwiyah Developments (1983) 52 P&CR 278.
The objector asks for her costs. She says she successfully resisted the application on grounds (a) and (c), and was successful on five out of the six points argued. The amount awarded was, she says, more than three times the amount offered. Moreover, the first offer sought the release of the covenant, and not just its modification; and the second sought a modification that would permit both the development proposed and any other general cosmetic alterations/additions in the future.
The following factors are in my view relevant. The applicants were successful in their application, but failed on two of the three grounds advanced. Pursuit of the unsuccessful grounds lengthened the hearing, but not substantially. The evidence of the applicants’ principal witness did not address itself to section 84 or the constituents of the particular grounds upon which modification was sought. The objector was awarded compensation, but the amount awarded was a sixth or so of that contended for at the hearing, Calderbank offers were made by the applicants, but the amount offered was a third or so of that awarded, and the offers sought discharge of the restriction or a wider modification than that ordered. The objector rejected the offers absolutely, and did not seek to negotiate. Bearing all these factors in mind, I think that there should be no order for costs.
Application allowed.