Sale of land – Restrictive covenant – Modification or discharge – Covenant against alterations to new dwelling without consent of developer – Covenantee refusing consent to enlargement of garage and creation of additional accommodation – Original covenantor applying to modify or discharge covenant to permit enlargement – Covenant imposed only three years before application – Risk of breaches of other covenant if modification allowed – Whether proposed use reasonable – Whether tribunal to exercise discretion – Application dismissed
Illidge Close was part of Cheerbrook Gardens, Willaston, near Nantwich in Cheshire, a residential estate of 20 detached houses all of which, with one exception, were completed by W Ltd (the developer) in 2016. The houses came in a variety of sizes of between three and five bedrooms and all were to one of nine standard designs. The houses were quite closely spaced and generally had small front gardens, with larger gardens to the rear or to the side.
The applicants were the freehold owners of No 5, a five-bedroom detached house. The transfer to the applicants included various covenants by which the applicants, as transferees, covenanted with the developer, as transferor, and with the owners or occupiers of the other houses on the estate, including the objectors, who had the benefit of those covenants. The relevant covenant prohibited the applicants from making alterations to the property without the consent of the developer.
Within one year, the applicants secured planning permission to enlarge their garage and construct additional space above it. Within three years of their first having agreed to be bound by the restriction, the applicants sought the developer’s consent to enable them to implement the planning permission but the developer refused.
Therefore, the applicants applied under grounds (aa) (the restriction impeded some reasonable use of the land for public or private purposes) and (c) (the proposed modification of would not cause injury to those entitled to the benefit of them) in section 84(1) of the Law of Property Act 1925 to modify or discharge the restrictive covenant. The developer and three neighbouring owners raised objections.
Held: The application was dismissed.
(1) The use of land within the curtilage of a domestic property for parking private vehicles was a reasonable use. The fact that planning permission had been granted for a proposed use of land, while not conclusive, was an important factor in favour of regarding that use as reasonable: Re Martins’ Application [1989] 1 EGLR 193.
In the present case, the proposal was not limited to the enlargement of the garage. It included the upper floor for which planning permission had been granted on the basis that it would be used as living accommodation. It might be that the upper floor was used for some other purpose, such as a gym, but unless it was used exclusively for storage of household or garden items it would not be used “exclusively as a private garage for the keeping therein of a private car or cars or motor cycle or cycles and items of a domestic or horticultural nature” as the transfer required. The applicants had not applied to modify or discharge that covenant, and there was a significant risk that to permit the proposed modification would be to set the scene for future breaches of covenant and further neighbour disputes. Therefore, despite the grant of planning permission, it would be an unreasonable use of the land for the proposed new garage to be erected.
(2) Had the covenant been perpetual, rather than limited to a short period only, the tribunal would have been concerned about the precedent effect of permitting a large garage with upper floor accommodation. The potential for the same alteration to be proposed in other locations would be quite substantial, and permitting one such building would make it much more difficult to resist other requests. But given the narrowness of the modification sought, sufficient to enable the planning permission to be implemented, by impeding the construction of the proposed garage the restriction did not secure practical benefits of substantial value or advantage to any of the objectors.
(3) The circumstances in which money would not be capable adequately of compensating the person entitled to the benefit of a restriction for the loss of that benefit were quite limited. In the present case, in the light of the short duration of the covenant, the very limited modification being sought and the very restricted views of the proposed new building which would be available to passers-by, the loss or disadvantage sustained by the objectors as a result of the modification would be capable of being adequately compensated by a very modest award.
(4) Although the injury caused to the objectors by the proposed modification of the restriction would be likely to be small, it could not be said that there would be no injury at all. The objectors would be put at risk of breaches of the absolute prohibition in the transfer on the use of the garage for other purposes. On the evidence, the risk of a breach of covenant, followed by a resistance to its enforcement, were not remote or fanciful possibilities. The general weakening of the scheme of covenants would represent a further injury to the objectors which made it impossible to say that ground (c) had been established.
(5) To permit the modification in the exercise of the tribunal’s discretion would be to set the scene for future breaches of covenant and further neighbour disputes. Both the fact that the applicants sought to be released from their own bargain, and the fact that they did so soon after making that bargain without any change of circumstances having occurred, were powerful considerations against the exercise of the tribunal’s discretion.
The shortness of the time since the imposition of a covenant and the closeness of the applicants’ connection to the original covenantor were factors which could be taken into account as justifying a refusal of an application. In this case, there was no suggestion that there had been any relevant change of circumstance. The applicants were themselves the original covenantors and the ink was only just dry on their transfer. As it was, the application failed before the discretion stage was reached: Re Barter’s Application [2017] UKUT 451 (LC); [2017] PLSCS 213 considered.
Michael Barrow (instructed by Hall Smith Whittingham LLP, of Nantwich) appeared for the applicants; Emily Duckworth (instructed by Brabners solicitors, of Manchester) appeared for the objectors.
Eileen O’Grady, barrister
Click here to read a transcript of O’Callaghan and others v Middleton and others
