Restrictive covenant – Discharge – Modification – Section 84 of the Law of Property Act 1925 – Residential garage being converted and used as dog grooming parlour – Restrictions preventing business use and advertising – Claimant applying to discharge restrictions – Whether restrictions being obsolete – Whether any injury to beneficiaries – Whether tribunal should exercise discretion to order modification with conditions – Application granted in part
The claimant made an unopposed application to discharge restrictions which prevented a domestic garage being used as premises for a dog grooming business. The claimant purchased a property known as Ash House, School Lane, Old Leake, Lincolnshire in 2012. Old Leake was a village approximately eight miles north east of Boston, and two miles west of The Wash, having a population of around 2,000. The claimant’s property was the southernmost property in a development of around 30 dwellings in the centre of the village and was one of a small number of detached houses; the majority were linked or terraced houses. It had a detached double garage, converted by the claimant for use as a dog grooming parlour. The front drive could accommodate five to six cars.
In September 2015, the local authority granted planning permission, expiring on 16 September 2020, for a 1m by 1m non-illuminated advertising sign at the property. In November 2015, they granted planning permission for a change of use of the garage from domestic (class C3) to a dog grooming parlour, restricted to the hours of 9am to 6pm, Monday to Friday, and 10am to 4pm on Saturdays, and at no time on Sundays or Bank Holidays. However, there was an obstacle to the use of the garage as a dog grooming parlour because the transfer of the property to the claimant included a restriction not to carry on any trade or business on the property, restrictions on parking commercial vehicles and a prohibition on posters, advertisements, signs, etc on the estate within five years of the date of transfer without prior written permission.
The claimant applied for the restrictions to be discharged, relying on grounds (a) (the restriction ought to be deemed obsolete) and (c) (the proposed discharge would not injure the persons entitled to the benefit of the restrictions) of section 84(1) of the Law of Property Act 1925, arguing that the covenants were obsolete and did not adversely affect the people who owned the land that had the benefit of the covenant. The application was determined on written representations.
Held: The application was granted in part.
(1) To succeed under ground (a) of section 84(1) of the 1925 Act, the claimant had to demonstrate that there had been material changes in the character of the land that was the subject of the application, or changes in the character of the neighbourhood, or some other change in material circumstances. The word “obsolete” was used in section 84(1)(a) in the sense that, if the character of an estate as a whole or of a particular part of it gradually changed, a time might come when the purpose of the restrictions could no longer be achieved, because a residential area had become, either through express or tacit waiver of the covenants, substantially a commercial area. When that time came, it might be said that the covenants had become obsolete: see Re Truman, Hanbury, Buxton and Co Ltd’s Application [1956] 1 QB 261
The difficulty for the claimant under ground (a) was that the restrictions had been entered into, by him, in a transfer document completed less than four years before his application was made which, for such an application, was astonishingly recently. Other than the claimant operating in breach of the restrictions, there had been little significant change in the character of the land. Even if the transfer had been older, the purpose of the restrictions could still be achieved. Putting aside the restriction on For Sale boards (time limited to five years, which had now expired), the main purpose of the restrictions when considered together was to prevent what was a purely residential estate from becoming a mixed-use area, by the conversion of houses or garages wholly or partially to commercial use. With the exception of the claimant’s venture, it was not apparent to a visitor to the estate that there was any other commercial use. The restrictions could not be considered obsolete, and the application under ground (a) was refused.
(2) There was no evidence that the claimant’s use of the garage caused annoyance to the owners of nearby properties. There had been no objections to the application, and the use that underpinned the application had planning permission. An absence of objections was not the same as consent, but it suggested that none of the claimant’s neighbours was concerned about the effect that his application, or the continued use of his property as a dog grooming parlour, would have on their own enjoyment of their homes. The claimant had been carrying on his business for some years and his neighbours on the estate were better placed than the tribunal to assess its effect, if any, on them.
Even if ground (c) was made out, there was also the fact that the applicant was knowingly using the application land in breach of the restrictions. The tribunal was mindful that the claimant had submitted the application himself, without legal advice, and while the tribunal did not reward parties that flouted their legal obligations, nor should he be punished for making a retrospective application to regularise the situation. In the circumstances and bearing in mind the absence of objection, the breach of covenants was not an obstacle to the success of the application.
(3) The tribunal’s power to discharge or modify was discretionary and, as section 84(1C) confirmed, it was open to the tribunal to modify rather than discharge, and make any modifications subject to further conditions as were reasonable. Grounds for a discharge had not been made out, since to give the claimant or his successors carte blanche for any business use would be much more likely to cause injury or disturbance to neighbouring owners. However, a limited modification of the restrictions was justified. There were only a handful of other houses on the estate with similar detached garages. The risk that acceding to the application would lead to the disintegration of the protection afforded by the covenants could be avoided in two ways: first, by modifying the restrictions only to the extent required to enable the claimant’s current use to continue; secondly, by making the modification of the restrictions personal to the claimant. An order to that effect would be made provided that, within three months, the claimant confirmed his acceptance of the proposed modifications.
Eileen O’Grady, barrister
