by Delyth Williams
During the past few years, the Lands Tribunal has considered several interesting cases on the issue of discharge or modification of restrictive covenants and the discharge of restrictions imposed under the then section 52 of the Town and Country Planning Act 1971 (now section 106 of the Town and Country Planning Act 1990). This article considers these developments in the light of continuing case law and practice.
Restrictive covenants not obsolete
The busy practitioner does not require reminding that the Lands Tribunal has power, under section 84 of the Law of Property Act 1925, to discharge or modify a restrictive covenant on certain grounds. In Re Tarhale Ltd’s Application [0] JPL 696 the restrictions in question provided that only one private dwelling-house should be erected upon each plot and that the driveway by which all the plots were approached should not be used by lorries and other heavy vehicles. The applicant sought to erect a two-storey, five-bedroomed house on the garden of plot no 3 and the Lands Tribunal accepted that a building scheme (with mutual covenants) was in operation. The tribunal held that the original purpose of the restriction, namely to limit the density of development, could still be achieved so that the restrictions were not obsolete. Further, the restrictions prevented the nuisance which, on the evidence, would occur during the proposed construction period.
In Re Beech’s Application (1990) 59 P & CR 502 the applicant acquired the premises under the “right to buy” provisions of the Housing Act 1985, subject to a covenant not to use the house other than as a private residence. The house in question formed part of a terrace of three houses and the applicant sought modification so as to enable the premises to be used for office purposes as an annexe to the adjoining solicitors’ offices for which planning permission had been obtained on appeal. The tribunal held that the use of the garden of the house as a car park would have a detrimental environmental impact upon adjoining properties for which money would not provide adequate compensation. Further, it was a legitimate objective of the council to seek to preserve the smaller type of house for residential use in pursuance of their duties as the housing authority.
The tribunal was of the opinion that allowing such an application would provide a precedent for future applications, which would have an adverse effect on the housing situation. It is to be noted that the tribunal drew attention to the fact that planning control under the 1971 Act and the tribunal’s powers under section 84 constituted two separate regimes and, although it must have regard to the planning position, it was not bound by such decisions.
In Re Burr’s Application [7] JPL 137 the house was situated upon land which had originally been part of a large estate and had been divided in 1925 into plots. One house was permitted on each plot and the applicant sought to discharge or modify the restriction so as to permit the erection of a five-bedroomed house for which planning permission had already been obtained. The applicant contended that the restriction was obsolete by reason of changes in the character of the neighbourhood and a number of original plots had already been subdivided. The 12 objectors contended that the proposed development would be inconsistent with the development plan and would harm the privacy and amenity of the estate. The tribunal held that it was not even arguable that the restriction ought to be deemed obsolete as its purpose, which was to prevent excessive density, could still be achieved.
The Lands Tribunal rejected the applicant’s contention that a modest payment of compensation would cover any injury caused in Re H & H Ltd’s Application [7] JPL 452, where the restriction permitted only one detached private residence. The applicants had obtained planning permission for the erection of three houses in the garden and to change the use of the existing house to that of a residential nursing home. The tribunal held that the restriction ought not to be deemed obsolete nor was it satisfied that the restrictions, in impeding a reasonable user, did not secure practical benefits of substantial value to persons entitled to their benefit, since it was quite possible that the proposed development of three houses would result in a 10% reduction in value of the objector’s properties.
The Lands Tribunal also dismissed the application in Re Purnell’s Application [8] JPL 43 where the applicant sought to modify or discharge restrictions affecting land so as to permit the erection of a second house. The land was situated on the Chelsfield Park Estate, Orpington, and the objectors argued that they would be injured by the modification sought, as the area was desirable because of the large gardens. The Lands Tribunal dismissed the application and held that the changes in the character of the neighbourhood were not such as to render the restrictions obsolete and the proposed development would injure the residents’ association and its members.
Serious detriment to at least two of the objectors was one of the factors considered by the tribunal in Re Williams’ Application (1988) 55 P & CR 401 where the restriction, imposed in 1870, forbade the erection of more than one double (or two single) villas on plot no 15. Planning permission was obtained to erect three houses on the plot, of which two had already been erected. The estate amounted to about 5 1/2 acres in total comprising 20 detached and 20 semi-detached houses. The tribunal held that the application would be dismissed as at least two of the objectors would suffer serious detriment to their amenities in a loss of spaciousness, nuisance from building works and diminution in the value of their properties for which money would not provide adequate compensation.
Whether the National Trust, as custodians of the beauty of the countryside, would be injured by modification of the restrictions was the main issue in Re Whitting’s Application (1988) 58 P & CR 321 where the covenant of 1970 provided that there was to be no building on the land without the consent of the National Trust and that no act or thing should be done which would materially alter the appearance of the land to the detriment of amenities. The applicant undertook the business of a trekking centre on land adjoining the application land and had obtained planning permission to erect a dwelling-house, stables and yard on the application land. The tribunal was of the opinion that the restrictions were not obsolete (notwithstanding a change in the use of the land from agricultural to recreational) since the purpose of protecting a very attractive part of the countryside was still viable and important. Money would not provide adequate compensation for such a loss.
In Re Bushell’s Application (1987) 54 P & CR 386 the applicant sought to erect a four-bedroomed house in the garden of her house for which she had obtained planning permission. The existing plot was subject to the restriction that not more than one house was to be built upon each parcel of land. The site was part of the Wimbledon House Estate and the applicant contended that there had been breaches of the covenant in the past. One of the objectors contended that he had a particularly fine landscape view so that money was not an adequate compensation for its loss. The Lands Tribunal held that the intrusion of the roof line of the proposed house into the unusual view enjoyed by one of the objectors was sufficient for the application to be dismissed. The Lands Tribunal also accepted that the resulting diminution in the market value of that house would be approximately £30,000.
Discharge or modification allowed
An application for discharge of the restrictive covenants in question was allowed in Re Bradley Clare Esates Ltd’s Application (1988) 55 P & CR 126. In this case the mutual restrictions allowed only one private residence upon site 14 and upon the site now divided into two sites (nos 2 and 12). The applicants wished to erect (on sites nos 14 and 16) sheltered-housing units. Over the years two releases of the restrictions on no 12 were effected, the last one being in 1982 when the owner of no 14 released the land of no 12 from the restrictions affecting it to the extent necessary to permit the erection and maintenance of a surgery for general medical practitioners. The tribunal allowed the application and held that the restrictions should be deemed obsolete by reason of changes in the character of the neighbourhood as the mutuality created by the covenants had been destroyed by the erection of the surgery. Further, the tribunal was not satisfied that the restrictions in impeding a reasonable user secured to persons entitled to their benefit, benefits of substantial value or advantage because the loss or disadvantage they would suffer would be very minor. No compensation was awarded since the restrictions were obsolete.
The tribunal held that, although the restrictions could not be deemed obsolete, they could be modified in Re Bennett’s and Tarmalin Ltd’s Application (1987) 54 P & CR 378. The applicant requested modification of restrictions permitting the use of a four-storey, end-of-terrace house and a three-storey, mid-terrace house as private residences only so as to permit them to be used as five self-contained flats and a maisonette. The restrictions were imposed by the trustees of the St Aubyn Estates Ltd (who were the objectors to the application) and by their predecessors in title in 1939 and 1923 respectively. The four-storey house was purchased in 1979, when it was already in multiple occupation and planning permission had been obtained for conversion into flats and a maisonette. The three-storey house had already been converted into three self-contained flats. The trustees were willing to give approval for the conversion of freehold houses into a suitable number of flats by deeds of variation provided compensation was paid.
The tribunal held that, although the restrictions should not be deemed to be obsolete, the modifications sought would be granted as these would not result in loss of amenity to the trustees nor in the diminution in the value of any property retained by them. All the trustees stood to lose was the ability to extract money as a consideration for agreeing to modification of the restrictions and this was not a loss for which compensation should be given.
In Re Reynold’s Application (1987) 54 P & CR 121 the owner of a canal sold a piece of land to the predecessor in title of the applicants subject to the restriction not at any time without previously having submitted plans to the British Transport Commission (the owner) and obtained approval “to erect or add to any building or structures or to execute any works on any part of the property hereby conveyed within a distance of 20 feet of the Commission’s land and works”. The applicants demolished an old cottage on the land and started to build a new cottage, but without having submitted the necessary plans. The owners of a nearby cottage objected by way of an injunction, which was stayed pending the outcome of the hearing. The Lands Tribunal held that the continued existence of the restriction would impede the reasonable user of the applicant’s land without securing to the objectors any practical benefits of substantial value or advantage. However, the tribunal ordered that the applicants pay £500 compensation to the objectors (the owners of the nearby cottage).
In Re Quaffers Ltd’s Application (1988) 56 P & CR 142 the applicant sought the discharge or modification of restrictive covenants so as to allow the erection, inter alia, of a 34-bedroomed hotel and restaurant. A large part of the site was occupied by O Ltd (one of the objectors), who was in the process of erecting, inter alia, a 119-bedroomed hotel. Conveyances of 1959, 1972 and 1974, which were taken for the benefit of the vendor (Bridgewater Estates Ltd), all forbade the use of any building on the land sold as an inn, public house, beer house or beer shop for the sale of alcohol or for any trade or business. The conveyances contained a proviso that Bridgewater Estates Ltd could alter, release or vary any of the covenants and the company still retained the freehold of neighbouring land containing conference and licensed restaurant facilities and public houses.
The tribunal was of the opinion that the object of the restrictions in the three conveyances was to protect the amenity of the land retained by Bridgewater Estates Ltd and not to protect its commercial interests. In addition, the restriction should be deemed obsolete since the land retained by Bridgewater Estates was not capable of being benefited by the restriction on account of the motorway network around the site. Although there had not been a change in the character of the neighbourhood since 1974, the restrictions imposed in the 1972 and 1974 conveyances were obsolete when imposed. Neither Bridgewater Estates Ltd nor O Ltd would suffer any loss or disadvantage and the restrictions would be discharged absolutely.
Section 52 agreements
The Lands Tribunal has power to discharge the provisions of a section 52(*) agreement and this power was considered by the Court of Appeal in Re Martin’s Application [8] 3 PLR 45. The Court of Appeal was of the opinion that the section 52 agreement procedures are, at one and the same time, part of the town and country planning system under the 1971 Act and distinct from that system. The granting of planning permission was merely a circumstance which the Lands Tribunal could and should take into account when exercising its jurisdiction under section 84 of the Law of Property Act 1925. It was for the Lands Tribunal to make up its own mind whether the requirements of section 84 were satisfied and there was nothing in the Town and Country Planning Acts which suggested that they were intended to interfere in any way with the jurisdiction of the Lands Tribunal in these matters.
In Re Quartley’s Application [9] JPL 943, the house in question was erected in 1968 subject to an agricultural occupancy condition but, in 1985, the owner obtained planning permission deleting the condition. At that time, the occupancy condition was transferred to another house in the locality which he also owned. The house was subsequently sold to the applicants who were accountants and much of whose work was with persons employed in agriculture. The tribunal dismissed the application and held that the restriction could not be deemed to be obsolete as the land in the locality was being farmed actively. It was not satisfied that there would be no demand for the property from skilled farm workers or from farm managers or even for a farm principal who could rent the property. In these circumstances money would be no adequate compensation for the injury which the council would suffer as custodian of the public interest.
The Lands Tribunal dismissed an application for the modification of a restriction imposed under a deed entered into pursuant to section 52 in Re Houdret & Co Ltd’s Application (1989) 58 P & CR 310. The applicant wished the restriction on the Grade II listed building to be modified so as to permit the basement, ground and first floors to be exempt from the restriction for private residential purposes only. In 1986 planning permission for the use of the ground and first floors for offices was granted on appeal. The tribunal dismissed the application and held that private residential use remained reasonably practicable and that the restriction could not be deemed to be obsolete. Further, the local authority, in their capacity as custodian of the public interest, would be injured if the modification sought was allowed. Here, money would not amount to adequate compensation.
In Re Towner’s and Goddard’s Application (1989) 58 P & CR 316 a section 52 agreement on land forming part of two gardens forbade erections of any sort on the land. In -1986, planning permission was granted on appeal for two tennis courts on the land together with chain-link fencing up to 2.4 m high. A condition attached to the planning permission provided for a tree-planting scheme. The tribunal allowed the application on the ground that the authority, as custodian of the public interest, would suffer no injury if the tennis courts were permitted.
In Re Jones’ and White & Co’s Application (1989) 58 P & CR 512 the applicants sought the modifications of a section 52 agreement, dated October 1983, which provided that no dwelling-house should be erected on the land except for the two dwelling-houses which had been granted planning permission. The site was divided into two, one part having the benefit of the original planning permission and the other with the benefit of planning permission for the erection of a two-storey dwelling-house and triple garage granted in 1987. The tribunal held that the maintenance of the open and rural aspect of the application land was a legitimate objective for the district council. So long as the reasons for refusing to agree to a variation of the section 52 agreement were real and not vexatious, the council was entitled to take that course of action in spite of having granted permission for the proposed development.
The main question in Re Barclays Bank plc’s Application [0] JPL 694; [1990] EGCS 51 was as to whether restrictions imposed under section 52 of the 1971 Act, which had been breached by the original owner, could be discharged for the mortgagee bank.
The facts of the case are complex, but the matter concerned a bungalow which was subject to an agreement that it would be occupied by one employed or last employed in agriculture locally. The farmer ceased to farm and left the original farmhouse, and the freeholder sold the bungalow in 1982 to the son but without the land and buildings (breaching one of the provisions of the section 52 agreement).
This purchase was made by way of a loan secured by a legal charge, but the son was adjudged bankrupt in 1986 and the bank sought to exercise the power of sale. The tribunal held that the restrictions must be deemed obsolete as it was not possible for any purchaser to achieve the original object of the restrictions in the section 52 agreement. Further, as the bank had committed no breach of the restriction, the tribunal’s discretion would, in any event, be exercised in its favour.
(*) Editor’s note: Section 52 agreements are now section 106 agreements under the Town and Country Planning Act 1990.
