Any person interested in land benefited or burdened by a restrictive covenant can apply to the Lands Chamber of the Upper Tribunal for the covenant to be modified or discharged: section 84(1) Law of Property Act 1925. Re Stanborough’s Application [2012] UKUT 21 (LC) concerned an application to modify restrictive covenants under section 84(1A)(a) of the 1925 Act to enable redevelopment of land on a wooded hillside with views over Poole Harbour.
The tribunal was asked to decide whether the covenants secured any practical benefits of substantial value or advantage for the objectors to the scheme and, if not, whether money would provide adequate compensation for the loss or disadvantage that the objectors would suffer.
The objectors occupied the neighbouring property. A small area of the land that they owned was subject to the covenants. Their home was built on land that did not benefit from them, but part of their garden did. They had constructed a large garden room there, which was furnished as a living area and was in constant use because of its privacy and views. However, they argued that the tribunal should take into account the benefits enjoyed by all of the land in their ownership.
The developer argued that it would be unfair if a landowner who covenanted to restrict the development of his land were suddenly to discover that he had covenanted to protect a much larger area. The tribunal agreed. The objectors had mistakenly relied on Gilbert v Spoor [1983] 1 Ch 27 to support their argument – but the decision related to a building scheme. Consequently, the tribunal could consider only the benefits secured to the objectors through their ownership of the land with the benefit of the covenants.
The developer had prepared an alternative scheme, which was not his preferred scheme, but which did not infringe the covenants. He relied on Shephard v Turner [2006] 2 P&CR 28, which established that in judging the effectiveness of the protection provided by covenants, the tribunal must concern itself with the practical, as opposed to theoretical, benefits. If an equally damaging development could be carried out without breaching the covenants, and there was evidence that this was likely to happen, then the benefit of the covenants impeding the proposed development was, in fact, illusory.
This meant that the tribunal had to consider whether the alternative scheme would proceed if it were to refuse to modify the covenants. This would depend on whether the developer would be able to obtain planning permission and on whether the scheme was viable. If so, did the developer intend to proceed with it? The tribunal accepted that the alternative scheme was a realistic possibility but, because there was some uncertainty surrounding its implementation, refused to attach significant weight to it.
The tribunal was satisfied that the development would adversely affect the visual amenity and quiet ambience of the garden. The modification of the covenants to allow the scheme would reduce the value of the land that benefited from them by 10% or £50,000. This represented a practical benefit of substantial value. Consequently, the tribunal rejected the developer’s application.
Allyson Colby is a property law consultant
