Restrictive covenant under section 37 of the Town and Country Planning Act 1962 (now section 52 of the Town and Country Planning Act 1971) — Application for discharge or modification of covenant under section 84 of the Law of Property Act 1925 — Effect of outline planning permission authorising the development prohibited by the section 37 agreement — Whether in such circumstances the restrictive covenant should automatically be discharged — In the present case the section 37 agreement affected part of the applicants’ garden and restricted the use to that of a private open space — The applicants wished to build a two-storey detached house on the restricted area and sought planning permission for this purpose, which was refused by the planning authority — On appeal to the Secretary of State the inspector granted outline planning permission for the development — Notwithstanding this permission, the authority declined to release the applicants from the restriction and they applied to the Lands Tribunal under section 84 of the 1925 Act to discharge or modify the provisions of the agreement — The tribunal dismissed the application and the applicants brought the present appeal
Court of Appeal that the tribunal had come to the correct conclusion — It was
clear that the fact that the owner of land burdened by an ordinary restrictive
covenant has obtained planning permission to carry out the development
prohibited by the covenant does not entitle him to ignore the covenant — The
benefit of the covenant is an interest in land which is not extinguished by the
acts of the planning authority — The owner’s remedy, in the absence of a
concession by the dominant owner, was to apply for a discharge or modification
under section 84 of the 1925 Act — The court rejected a suggestion that the
position was different where the covenant derived its validity from a section
37 or section 52 agreement as distinct from a conveyance between adjoining
landowners — The restrictive agreement regime was quite separate from the
ordinary powers of the authority to grant planning permission — The grant of
permission did not involve the consequence that the tribunal must discharge the
covenant — It was merely a matter which the tribunal can and should take into
account in exercising its section 84 jurisdiction
present case the tribunal had duly considered the relevant provisions of
section 84 and had come to the conclusion that the restriction should remain —
The member of the tribunal was entitled so to decide and there were no grounds
for disturbing the decision — Appeal dismissed
The following
cases are referred to in this report.
Driscoll v Church Commissioners for England [1957] 1 QB 330; [1956] 3
WLR 996; [1956] 3 All ER 802; (1956) 7 P&CR 371; [1956] EGD 259; 168 EG
521, CA
Truman,
Hanbury, Buxton & Co Ltd’s Application, Re
[1956] 1 QB 261; [1955] 3 WLR 704; [1955] 3 All ER 559; (1955) 7 P&CR 348;
[1955] EGD 169; 166 EG 564, CA
This was an
appeal by David Peter Martin and his wife, Jean Martin, from the dismissal by
the Lands Tribunal (Mr V G Wellings QC) of their application under section 84
of the Law of Property Act 1925 for the discharge or modification of a
restrictive covenant. The covenant related to the applicants’ land at 228
Harley Shute Road, St Leonards on Sea, East Sussex, and had been made between
the applicants’ predecessor in title and Hastings Borough Council in 1967 under
section 37 of the Town and Country Planning Act 1962, a provision replaced by
section 52 of the Town and Country Planning Act 1971.
David Lamming
(instructed by Menneer Idle & Brackett, of St Leonards on Sea) appeared on
behalf of the appellants; Duncan Ouseley (instructed by the solicitor to
Hastings Borough Council) represented the respondents.
Giving
judgment, FOX LJ said: This is an appeal by Mr and Mrs Martin (‘the
applicants’) from a decision of the Lands Tribunal (Mr V G Wellings QC)
refusing their application for the discharge or modification of a restrictive
covenant. The case is concerned with the ambit of the tribunal’s powers under
section 84 of the Law of Property Act 1925 to modify or discharge restrictive
covenants where the covenant is created by what is generally called a section
52 agreement, ie an agreement entered into under section 52 of the Town and
Country Planning Act 1971.
The applicants
own 228 Harley Shute Road, St Leonards, East Sussex, which is a house and
garden. The land which is subject to the covenant is part of the garden. It is
L-shaped, the foot of the ‘L’ being at the south-eastern end of the garden of
no 228. The remainder of the ‘L’ (ie the perpendicular arm) adjoins the western
boundary of the garden; it is about 170 ft long, has a frontage of about 60 ft
to
The applicants wish to develop that plot.
The houses in
Harley Shute Road in the vicinity of plot 3 are all detached houses with
substantial gardens. No 228 was built in about 1928; the other houses on the
same side of the road (with the exception of no 218, which was built in the
1960s) were built in the 1930s. The houses on the other (ie north-west) side of
the road were built in the 1960s.
I should
mention that the next house to no 228 is no 224; there is no 226. Provision
was, it seems, made for a water supply branch to plot 3. The applicants
accordingly believe that the original developer contemplated that a house
should be built on plot 3.
In October
1965 the Borough Council of Hastings granted to the predecessor in title of the
applicants outline planning permission for the erection of two houses in the
garden of no 228. One of these would be on plot 3 (though with a somewhat
narrower frontage to the road than the frontage of plot 3) and the other in a
position with access to Gillsman’s Hill (a road which runs into Harley Shute
Road from the east).
In 1960 the
then owner of no 228 wished to change the position of the permitted houses and
applied for planning permission for two detached houses with access to
Gillsman’s Hill.
There then
followed discussions with the planning authority regarding the existing
planning permission on the land fronting Harley Shute Road. The authority was
concerned lest it should have to pay compensation if that permission were
revoked.
In the autumn
of 1966 it was agreed that the existing permission should be revoked without
compensation. In fact, however, that agreement was not given effect to.
Instead, the parties entered into an agreement (‘the agreement’) under section
37(2) of the Town and Country Planning Act 1962. Section 37 was in the
following terms:
37. (1) A local
planning authority may, with the approval of the Minister, enter into an
agreement with any person interested in land in their area for the purpose of
restricting or regulating the development or use of the land, either
permanently or during such period as may be prescribed by the agreement; and
any such agreement may contain such incidental and consequential provisions
(including provisions of a financial character) as appear to the local planning
authority to be necessary or expedient for the purposes of the agreement.
(2) An agreement made under this section with any
person interested in land may be enforced by the local planning authority
against persons deriving title under that person in respect of that land, as if
the local planning authority were possessed of adjacent land and as if the
agreement had been expressed to be made for the benefit of such land.
(3) Nothing in this section or in any agreement
made thereunder shall be construed —
(a) as restricting the exercise, in relation to
land which is the subject of any such agreement, of any powers exercisable by
any Minister or authority under this Act so long as those powers are exercised
in accordance with the provisions of the development plan, or in accordance
with any directions which may have been given by the Minister as to the
provisions to be included in such a plan, or
(b) as requiring the exercise of any such powers
otherwise than as mentioned in the preceding paragraph.
(4) The power of a local planning authority to
make agreements under this section may be exercised also —
(a) in relation to land in a county district, by
the council of that district;
(b) in relation to land in the area of a joint
planning board, by the council of the county or county borough in which the
land is situated,
and
references in this section to a local planning authority shall be construed
accordingly.
The section has
now been replaced by section 52 of the 1971 Act with modifications which are
not material.
The agreement
was entered into on February 27 1967 and was made between the Mayor, Aldermen
and Burgesses of the Borough of Hastings (which and its successors I will call
‘the corporation’) of the one part and William Fletcher of the other part. Mr
Fletcher was then the owner of the freehold of no 228. The agreement recited, inter
alia, as follows:
The Owner has
made application for Planning Permission . . . for the erection of two
dwellings on the said land hatched pink and hatched pink and blue and
concurring with the opinion of the Corporation that it would be inappropriate
by reason of the excessive density of buildings which might thereby ensue for
the Corporation to grant such Planning Permission whilst the Planning
Permission . . . granted by the Corporation on the fourteenth day of October
one thousand nine hundred and sixty five for the erection of two dwellings on
the said land . . . remains exercisable the Owner has requested the Corporation
to enter into this Agreement.
The operative
part of the agreement provided as follows:
NOW THEREFORE
it is hereby agreed by and between the parties hereto in pursuance of Section
37 of the Town and Country Planning Act 1962 that the said land hatched blue
shall not be used for any purpose other than as a private open space and that
accordingly no building, structure or erection (other than fencing a summer
house or garden shed if the owner shall so require) shall be placed thereon.
The land
hatched blue is the L-shaped land and accordingly includes plot 3.
On March 7
1967 the corporation granted planning permission to the former owner for the
erection of two dwellings each with access to Gillsman’s Hill. On May 12 1967
the minister approved the agreement. Subsequently the two houses permitted by
the planning permission of March 7 1967 were erected on two plots forming part
of the garden of 228 Harley Shute Road (but excluding plot 3). The two plots
were then sold off.
No 228 and the
residue of its land (including plot 3) were bought by the applicants in 1978.
In May 1983 the applicants applied for planning permission for the erection of
a two-storey detached house with garage on plot 3. The application was refused
on the grounds that plot 3 had inadequate width to accommodate a two-storey
dwelling and would constitute a cramped form of infilling development which,
together with the loss of mature trees, would result in an unacceptable loss of
visual amenity.
The applicants
appealed to the Secretary of State for the Environment, whose inspector in
August 1984 granted outline planning permission for the proposed development.
The decision letter contained, inter alia, the following observations:
12 It is my view that, while this development
has aroused concern, to allow it to proceed would not put in jeopardy the
visual environment of the area. Even though the proposed dwelling and its site
will be smaller than its neighbours I am satisfied that careful and sensitive
handling of its appearance and siting at detailed stage should ensure a
satisfactory and compatible design. This I consider to be of importance because
there is no doubt that the area has distinctive qualities that arise from the
siting, scale and well-considered details of these houses and their gardens.
The question of the possible cramped appearance of the site and the effect of
the development on its neighbours I consider is of equal importance.
13 The houses opposite the site are smaller,
narrower and are sited above the road with open-front gardens so that they are
more open to view. Whereas the houses on the appeal-site side of the road are
set below road level with shallow but mature gardens enclosed by dense hedges
to their front. They are less open to view and are almost without exception
broad-fronted houses that nearly fill the widths of their sites and they
present an almost continuous but varied facade that follows the sweep of the
road. To fill a gap in this development with a house that follows a similar
pattern of height and building-line is, in my view, acceptable even though it
may be marginally smaller. The retention and protection of the trees that front
the site play an important part in this consideration and I am imposing a
condition to that effect. If care is taken I see no reason why they should be
harmed so that they can continue to provide privacy to the site and at the same
time enhance the environment of the street
. . .
It is common
ground that as a matter of the law of restrictive covenants and having regard
to the provisions of section 37 of the 1962 Act, the covenant contained in the
agreement is enforceable by the corporation against the applicants.
Notwithstanding
the grant of planning permission upon the appeal, the corporation is not
prepared to release the applicants from the provisions of the agreement. The
applicants then applied to the Lands Tribunal to discharge or modify the
provisions of the agreement. The grounds relied upon by the applicants are
those in (a), (aa) and (c) of section 84(1) of the Law of
Property Act 1925, that is to say:
(a) that by reason of changes in the character of
the property or the neighbourhood or other circumstances of the case which the
Lands Tribunal may deem material, the restriction ought to be deemed obsolete;
or
(aa) that (in a case falling within subsection
(1A) below) the continued existence thereof would impede some reasonable user
of the land for public or private purposes or, as the case may be, would unless
modified so impede such user; or . . .
(c) that the proposed discharge or modification
will not injure the persons entitled to the benefit of the restriction . . .
The corporation
in its notice of objection to the application stated:
The section
37 Agreement was freely entered into by the owners of the land in 1967 and in
the intervening years there has been no change in circumstances which would
cause the local planning authority to change its view that it is in the
interests of the amenities and the environment of the area that this piece of
land remains undeveloped.
The Lands
Tribunal dismissed the application under all the heads relied upon. The
applicants now appeal.
When a
restrictive covenant is entered into between owners of adjoining, or otherwise
affected, lands the fact that the owner for the time being of the burdened land
subsequently obtains planning permission to develop that land in a manner which
is prohibited by the covenant does not entitle him to ignore the covenant. The
benefit of the covenant is an interest in land and it is not extinguished by
the acts of a planning authority. The position under a section 37 (or section
52) agreement is no different. Such an agreement creates a fully effective
restrictive covenant which operates in just the same way as if the local
authorities concerned were the owners of adjoining land for the benefit of
which the covenant was taken. In either case if the owner of the burdened land
wishes to be rid of the covenant he must, in the absence of agreement with the
dominant owner, obtain a discharge or appropriate modification of the covenant
under section 84 of the Law of Property Act 1925.
Basically, the
submission on behalf of the applicants is that, upon an application to the
Lands Tribunal under section 84, while the grant of planning permission does
not determine how the tribunal should deal with a case where the covenant was
entered into between adjoining landowners, quite different considerations apply
when the covenant derives its validity from section 37 (or section 52). The
argument, in substance, is this. It is said that a section 37 agreement is
entered into by a planning authority under statutory powers in the town and
country planning legislation and for a planning purpose (ie to restrict or
regulate the development or use of land). In these circumstances, it is
contended that where the minister, by his inspector, has finally determined
from a planning point of view that the erection of a house on the site was
acceptable, then the purpose of the section 37 agreement has gone and the
covenant should be discharged. This construction is, in my opinion, based upon
a misapprehension. There are, it seems to me, two statutory regimes. One is the
power of the planning authority under section 37 (and now under section 52) to
enter into an agreement regulating the development and use of land by way of
restrictive covenant in circumstances where, under the general law, it would
not be possible effectively to do so because of the rules as to the running of
the burden and benefit of covenants. The other is the power of the planning
authority under section 29 of the 1971 Act (and section 16 of the 1962 Act) to
grant planning permission. These regimes are subject to different procedures.
If a person is dissatisfied with the planning authority’s refusal of planning
permission, his remedy is to appeal to the Secretary of State under section 36
of the 1971 Act (section 23 of the 1962 Act). If a person who is bound by the
provisions of a section 37 agreement wishes to escape from them he must go to
the Lands Tribunal and persuade the tribunal that it is a proper case to
exercise its jurisdiction to discharge or modify the covenant under section 84.
Nobody was obliged to enter into a section 37 agreement. If an applicant for
planning permission was offered permission upon terms that he entered into a
section 37 agreement he could appeal to the Secretary of State. But if he chose
to enter into the agreement he (and his successors in title) must accept that
he can avoid its effect only through the statutory procedure under section 84.
Thus, it seems to me that, while the two regimes impinge upon each other to
some extent, they constitute different systems of control and each has, and
retains, an independent existence.
In my view,
the applicants’ contention is wrong in so far as it suggests that the granting
of planning permission by the Secretary of State necessarily involves the
result that the Lands Tribunal must discharge the covenant. The granting of
planning permission is, it seems to me, merely a circumstance which the Lands
Tribunal can and should take into account when exercising its jurisdiction
under section 84. To give the grant of planning permission a wider effect is, I
think, destructive of the express statutory jurisdiction conferred by section
84. It is for the tribunal to make up its own mind whether the requirements of
section 84 are satisfied. The grant of permission by the Secretary of State is
no more conclusive of that than is, for example, the deemed grant of planning
permission under the provisions of the General Development Order. All the facts
of the case have to be examined by the Lands Tribunal. There is nothing in the Town
and Country Planning Acts 1962 or 1971 which suggests that these are intended
to interfere in any way with the jurisdiction of the Lands Tribunal under
section 84.
I come, then,
to the question of what the Lands Tribunal actually decided.
So far as para
(a) of section 84(1) is concerned, the learned member, Mr Wellings,
observed that the purpose of the restriction, as appears from the recitals to
the agreement, was to prevent excessive density of building on the original
curtilage of no 228. Mr Wellings, who himself had inspected the site, accepted
the evidence of Mr A W Constantine MRPTI ARICS, the deputy borough planning
officer of the corporation, that the new house, if built, would have a cramped
appearance to the detriment of the visual amenity of the area and that a
cramped appearance is a manifestation of excessive density. Mr Wellings also
observed that the inspector, who merely granted outline planning permission,
did not explain how the cramped appearance of the house might be overcome; and
there was no material before the Lands Tribunal to determine that question. It
followed that the purpose of the covenant could still be achieved. Accordingly,
the member took the view that the purpose of the restriction could still be
achieved and it should not be deemed obsolete. He so held.
I see no
ground for interfering with that conclusion. The test for obsoleteness is
whether the original object of the restriction can still be achieved (Re
Truman, Hanbury, Buxton & Co Ltd’s Application [1956] 1 QB 261; Driscoll
v Church Commissioners for England [1957] 1 QB 330).
Prima facie the original object could be achieved and there was no adequate
evidence displacing that. The mere fact of the inspector’s conclusion does not
displace it. It is, in my view, no answer to say that the inspector thought the
development was acceptable. The question whether a restriction is obsolete has
to be determined by the Lands Tribunal on the evidence before it.
As regards
para (aa) this applies only in a case within subsection (1A) of section
84, that is to say when the restriction either confers no practical
benefit of substantial value upon the person entitled to the benefit of it or
is contrary to the public interest and, in either case, that money will be
adequate compensation for the discharge of the covenant. The member took into
account the decision of the inspector but did not think that the restriction
was contrary to the public interest having regard to the cramped appearance
which the new house would give.
As to benefit,
the member was of the opinion that it is a practical benefit to the corporation
to prevent detriment to the visual amenity of this part of its area and that
this was of substantial advantage to the corporation for which money would not
be an adequate compensation.
I should
observe that Mr Constantine had given evidence that, while the proposed house
would cause no problem of overlooking, it would be visually unacceptable
because the width of the plot is inadequate and, in the context of the existing
properties in the area (which have a distinctiveness because they have a more
relaxed density than houses built at a later date), it would constitute a
cramped form of development. The insertion of another house in the group at the
north-eastern end of Harley Shute Road would be detrimental to the amenities of
that group. The amenities of the neighbourhood, which the corporation had a
duty to protect, would be prejudiced thereby. He knew of no means by which the
cramped appearance could be overcome. Mr Constantine was also of the opinion
that one or two mature trees would go in the course of the development.
In my opinion,
the member was entitled to reach the conclusions which he did and I see no
basis for disturbing those conclusions.
Finally, there
is para (c), namely that the proposed discharge or modification would
not injure the corporation. The member rejected that, since he was of the
opinion that the interference with visual amenity would be an injury to the
corporation in its capacity as custodian of the public interest. In my opinion,
that was a conclusion which the member was entitled to reach.
The member
said that money would not be an adequate compensation to the corporation for
the discharge of the covenant. I think that must be right. If the covenant is
of value to the corporation for the protection of the public interest in the
preservation of the amenities, it is difficult to see how a money payment could
be adequate compensation. Money compensation seems wholly inappropriate.
In the
circumstances, in my judgment the appeal fails and should be dismissed.
BALCOMBE LJ
and SIR FREDERICK LAWTON agreed and did not add anything.
The appeal
was dismissed with costs. Leave to appeal to the House of Lords was refused.